HC Deb 10 December 1973 vol 866 cc45-105
Mr. Speaker

Before I call the hon. Member for Swindon (Mr. David Stoddart) to move his motion, I should inform the House that I have not selected the amendment.

3.55 p.m.

Mr. David Stoddart (Swindon)

I beg to move, That this House, appalled at the continued and unprecedented escalation in food prices, which bears most heavily on old age pensioners and others on low incomes, condemning the Government for failing to cut the rise in prices, at a stroke, but instead of allowing food prices to increase by 44.8 per cent. since June 1970, and, noting that many food items have been taxed through the imposition of tariffs and levies, calls upon Her Majesty's Government to take immediate effective action to prevent further food price increases, including a demand that the EEC Council of Ministers agree forthwith to a fundamental alteration in the Common Agricultural Policy and to deferment of tariff increases due to take effect in 1974, to subsidies for certain basic and essential foods and price controls on a wide range of articles which affect the price of food; and at the same time welcomes the understanding between the Labour Party and the TUC on prices, believing that this offers the best hope of stabilising food prices and preventing hyper-inflation. I chose this subject for debate because I was successful in drawing first place in the ballot on the same day that the latest increase in the food price index was announced. The figure so horrified me that I thought that it was time that a backbench Member brought forward the matter for debate. Food prices is the No. 1 topic of conversation wherever one goes—whether it be in the bus queue, in the food shops, on the factory floor or in the offices. Housewives everywhere are talking about this problem because it worries and concerns them and, indeed, helps week by week to bring down their standard of living.

There is no doubt that the latest announced increase in the price of food—44.8 per cent. since June 1970—has come as a great shock. There has been an increase of 3.3 per cent. in one month. But even now, as this debate starts in an atmosphere of gloom, it is out of date because, according to the latest figures published by the Grocer, the figure now is 47 per cent. above the June 1970 level. Since the beginning of stage 3, the index has increased by 2.4 per cent. At this rate, it will not be long before food prices are 50 per cent. higher than they were in June 1970. To ordinary people that means in real terms that they now have to spend £3 on food for ever £2 they spent three years ago. That is a significant sum of money by any standards and there is no doubt that many people are suffering great hardship as a result.

It is tragic that the heaviest burden falls on people whose income is lowest and who are least able to bear it. The smaller the income, the larger the percentage of income which has to be spent on food. Thus, the pensioners, disabled people, and people on low incomes are worst off. It is they who have failed to benefit in any measure from the Government's taxation policies.

High food prices are increasing poverty. Last July, the Daily Mirror summed up the situation with three short words in a stark headline—"Hungry Britons Shock". That was not dreamed up by a sub-editor. The Daily Mirror, in its report, said that 1½ million lower-paid families were underfed. It took its information from two articles. One was based on the Treasury Economic Progress Report, which said that there were still people in Britain who did not get enough to eat. The Household Consumption Expenditure Survey reports that the group most likely to suffer from rising food prices is those with more than three children.

The Prime Minister said recently that pensioners were eating better than ever before. That may be his impression, but a survey by Age Concern in July showed that rising prices were forcing pensioners to eat less well. It found that their diet was boring and restricted and that many could no longer afford meat. Perhaps the Prime Minister has not met many pensioners lately. If he had they would surely have disabused his fancy and told him the facts. Indeed, statistics have clearly shown that the Prime Minister was mistaken.

I turn to the National Food Survey, which includes the pensioners' food consumption index. It reveals that between the second quarter of 1970 and the second quarter of 1973 pensioners ate 27 per cent. less meat, 15 per cent. less butter, but 8 per cent. more potatoes and 9 per cent. more margarine. Those figures show that pensioners are not getting the protein foods that they need. But, of course, the Prime Minister is given to making statements of fancy which are quickly belied by the facts of the situation.

We all remember the right hon. Gentleman's much-quoted speech to Leicester housewives. To convince them, and housewives throughout the country, he said that he would cut the rise in prices "at a stroke". That statement and its optimism were unqualified then. There was no mention that keeping the promise might be subject to extraneous matters like rising world prices. We heard nothing about that as he sought to convince the housewives of Leicester and of the country that if they voted for him he would cut the rise in prices "at a stroke". Just how false that promise would prove to be did not occur to most of us in our wildest nightmares. The 3s loaf forecast by the right hon. Gentleman if a Labour Government came to office is now just about with us under his administration, and many traditional foods have been priced off the ordinary family's table. For many the weekend joint is very much a thing of the past.

The enormity of some food price increases has to be seen to be believed. These increases were highlighted in an answer to a Question on 23rd November this year. It revealed that chuck beef was up 74.8 per cent.; brisket with bone up 99.5 per cent. since June 1970; loin of lamb up 65.4 per cent.; shoulder of lamb with bone up 55.8 per cent.; breast of lamb up 134.9 per cent.; cod fillets up 127 per cent.; herrings up 83.3 per cent.; eggs per dozen up 146.5 per cent. The figures show the enormity of the rise.

It is also interesting to note the higher prices that have occurred in high protein foods. What is more, if you listen to the figures, Mr. Speaker, you will see again that the highest price rise amongst those protein foods has been for the cheaper cuts of meat—just the very cuts which lower-income families have to buy to try to keep body and soul together. They are also the high protein foods that our miners need. We have heard much about the miners lately but these are the very foods they need to enable them to mine the coal to keep the economy going. They are the ones who need the roast beef of Old England and the high protein foods, not the people pontificating throughout the week from golf courses in the south of England. I hope that the Government will make sure that those people are able to continue to pay for them.

As the housewives do their Christmas shopping and fork out 12½p to 15p per pound more for their turkeys—if they are lucky enough to afford them—as they pay out more for other Christmas fare—and I have some of the price increases here—they will, for example, have to pay 7p more for a 2 lb. Mrs. Peek's Christmas pudding. Brazil nuts will cost 20 per cent. more, from 7½p to 9p, and ground almonds will cost 50 per cent. more, with an 8 oz. packet rising from 40p to 59½p. It is such prices that people will pay this Christmas. As they pay they may well remember the pleasures of Christmas Past and contrast them favourably with the gloom of Christmas Present. The Prime Minister would do well to remember the awful warning given to Scrooge by the Spirit of Christmas Yet to Come, for political death—unloved, unmourned—surely awaits him unless he mends his ways.

If the tide of inflation of the shopping baskets showed signs of ebbing we might see some hope for the future. But it does not. Indeed, the reverse is true. The increase in food prices this year has hit a new peak. Between October 1972 and October 1973 food prices increased by 18.7 per cent. against 8.9 per cent. between November 1971 and November 1972. The increase was 12.4 per cent. between November 1970 and November 1971 and only 7.9 per cent. between November 1969 and November 1970 when the Labour Government were in office.

To see what this percentage increase means in real terms to the housewife as she goes around to buy her shopping, it will be instructive to look at The Guardian Shopping Basket published on 30th November. The headline is:

"Up, up, goes the basket …".

Without detailing the increases in prices, the difference between what the housewife would have paid in October 1972 and what she has to pay now is £1.47, nearly 30 bob a week extra in a single year. No wonder housewives are at their wits' end to know how to make ends meet. The sad fact is that prices are escalating even more sharply since the Government's prices and incomes policy, and, with each stage, the situation seems to grow far worse instead of better.

So much then for acting directly to cut the rise in prices "at a stroke". Far from doing that, the Government have pursued policies which were bound to cause prices to rocket, and all the way along they have remained complacent to a most irresponsible degree. Of course, the Prime Minister does have his apologists, but these are dwindling in number. One does not see quite so many on television and in the Press who are still prepared to support him. Nevertheless, there are still one or two, notably the present Leader of the House, that erstwhile and voluble Minister of Agriculture, Fisheries and Food. His verbal gems used to shower upon the Opposition like manna from Heaven. Some of us were sorry to see him go. On 29th June 1971 that right hon. Gentleman was saying of the "at a stroke" statement: I do not think that they took that all that seriously. Housewives are far more sensible than that They knew perfectly well that we could not cut prices like that—at a stroke. Over a period of time the cost of food will decrease. Of that I am absolutely convinced. The promised land has proved to be a mirage, and with each optimistic statement from the Government it pops further into the distance. The right hon. Gentleman, who has been transmogrified from Agricultural Minister to Leader of the House, regaled us with many other interesting statements during his tenure of office at the Ministry of Agriculture. In 1970 he was advising us to eat peaches. In 1971 he was telling housewives to shop around—with a pram and three kids. In June 1972 in the face of acute increases in beef prices he said: I believe this to be a temporary situation and that within a few weeks we shall be seeing a different story."—[OFFICIAL REPORT, 5th June 1972; Vol. 838, c. 36.] As we all know, that story turned out to be a horror tale indeed.

One of the right hon. Gentleman's most interesting statements was when he said in February 1972: I have always believed that there is a sensible moderate price for food which people should be prepared to pay."—[OFFICIAL REPORT, 29th February 1972; Vol. 838, c. 241.] Since he left the Ministry of Agriculture the right hon. Gentleman has more or less maintained a shamefaced and embarrassed silence on food prices. He has left it to "Stonewall Joe" to hold the baby.

Mr. Eric S. Heffer (Liverpool, Walton)

Where is he?

Mr. Stoddart

He is not here today. Perhaps the right hon. Gentleman who is now the Leader of the House will break his vow of silence on food prices and tell us what he believe to be a "sensible moderate price for food." Whatever his opinion may be now, he is a member of an administration that has allowed prices to rise in a way that is unprecedented, certainly in peace time. Even during the period of the Korean War food prices did not rise to the extent that they have done in the past three years. During the period 1949–52 the total increase was 38.35 per cent. The highest annual figure, according to a Written Answer of 19th November 1973, was 15.1 per cent. between November 1950 and November 1951. Even after the enactment of the Corn Laws in 1815 the highest figure recorded over three years was 24.1 per cent.—between 1822 and 1825.

We can see that this escalation of food prices over which the Government have presided is unprecedented. It is amazing that this should have happened to an administration led by a man who three years ago was promising the people of the country—and they believed that promise; they trusted the man—that he would cut the rise in prices at a stroke. Instead of doing that he has broken that promise and prices have gone on rocketing as never before. But the Government, presiding as they do over this unprecedented inflation of the shopping basket, decline to shoulder any responsibility.

It is always the fault of someone else, never their fault. They are always finding some scapegoat. First of all it is the trade unionists, then it is someone else, and now they have another to absolve them of the responsibility—world prices. Many in this House, and the majority of the general public, believe that the terms of our entry to the European Economic Community have a great deal to do with rising food prices. We believe that the common agricultural policy, designed as it is to benefit the producer at the expense of the consumer, has had a lot to do with the rapid rise in food prices, not only directly, through the imposition of tariffs and levies, but also indirectly.

Many of our traditional suppliers who hitherto provided food at relatively low and stable prices because they wished to cultivate a long-term market have now raised their prices—and we cannot blame them—to get as much gain as the can in the short period of the transitional arrangements. Furthermore, to protect themselves—and who can blame them—they are finding new outlets for their products. While it could be true that the levies and the tariffs had accounted for only 1 per cent. of the rise in food prices over the first six months that we were in the Common Market—and that is 2 per cent. a year—these other factors have had a much greater effect and will continue to do so as Britain is forced out of the world food market and is forced to rely on the artificially high prices in a rigged EEC market.

It is right to call, as I do in my motion, for a fundamental alteration in the CAP. I believe that a majority of the House would favour that. It would enable Britain to continue to import food from our traditional markets. I would favour allowing the entry of food which is better and more cheaply produced elsewhere to the whole of the EEC. It would benefit the Community, certainly this country.

We hear so much about the world prices argument. The Government are currently sheltering behind it. No one would deny that world prices have gone up. That is not the whole of the story. If it were one would have expected that all countries would be uniformly affected. This is by no means so. Let us look at some of the statistics from the ILO Bulletin of Labour Statistics and the United Nations monthly Bulletin of Statistics. From these it will be seen that the percentage increases in this country are much higher than those in other countries. For example, between September 1970 and September 1973 the percentage increase in Belgium was 17.8 per cent., in Denmark 33.8 per cent., in France 26 per cent., and in West Germany only 19.2 per cent. Ireland was rather high with 38.9 per cent., Norway 19 per cent. and the United Kingdom 41.1 per cent. We were ahead even of the United States, which had a percentage increase of only 28.1 per cent.

That in itself undermines the argument that the Government have been putting forward, that it is world prices only which are having such an enormous effect on Britain's food costs.

There are other factors, and the Government would do well to recognise them, accept them and tell people about them. The first factor is the continued devaluation of the, pound as a result of allowing it to float. It is absolutely useless for the Government to say that that is not an element in this situation. It is a relatively large one. I wish the Government would stop trying to bamboozle people, telling them that they have no responsibility at all for this rapid increase in food prices. They would do themselves a lot more good if they were honest with the public and told them the truth, the whole truth and nothing but the truth.

Then there is the Government's financial policy at home and abroad. Prices cannot be divorced from the Government's overall policy. The directions that the Government give and what they do with their internal finances have an effect on their external finances and on commodity prices. That happens in this way. The Government are borrowing this year £4,000 million more than they will get in. That is in some measure responsible for the devaluation of the pound and the reduction of confidence abroad. Furthermore, the Government have expanded demand and printed pound notes, which has resulted in the sucking in of imports and the disastrous balance of payments position. Again, this reduces confidence. A further factor is that at home and abroad people have lost confidence in paper money. Just as they turned to buying land and houses, they are turning to buy commodities, and that is pushing up the price of commodities. Therefore, the Government's own policies have had a direct effect on the world food market and have helped to push up world commodity prices.

I hope that the Government will no longer try to shelter behind the argument of world food prices, because it will not wash. I grant that there is an element of world food price escalation, but it is not the full story. I wish that the Government would recognise that and tell people the truth.

Mr. Ian Lloyd (Portsmouth, Langstone)

In searching for other than international explanations for the rise in world food prices the hon. Gentleman is looking at the domestic component of the British rise in prices. Does he believe that the nation's tendency to pay itself about 11 per cent. when in real terms it is producing about 3 per cent. may be an explanation?

Mr. Stoddart

I hoped that I had dealt with that argument. One of the problems of this nation is that it is paying the wrong people. It is not paying the people who actually produce the goods. The benefits are going not to those who earn money but those who make money. That is what is wrong with our society. It is an unjust society, and in those circumstances we shall not convince working people that they should put their shoulders to the wheel. They know that the faster the wheel goes round and the more they produce the more the surplus value will be creamed off by the makers of money who produce nothing.

What is the outlook for food prices? As far as I can see, it is pretty bleak. I have a host of newspaper cuttings predicting what will happen, of which I will select only two. The first prediction is by Sir John Stratton, who has been in the news recently for having had an increase in salary of £341 a week. His forecast is as follows: Though prices may remain relatively stable for a while, the underlying trend in the longer term must be upwards, and the solution must lie in the ultimate acceptance by the housewife that more realistic prices for meat have come to stay. According to Sir John Stratton, housewives had better look out.

The Guardian on Friday 30th November contained an article headed: and soon the pie's the limit", which reported that the price of pork pies, sausages and bacon will rise sharply next year as supplies are reduced. That is according to Mr. H. Newton-Clare, Chairman of the Meat Manufacturers' Association. He went on to say: I shudder to think what shop prices will be this time next year, even if feed prices drop in the first few months of 1974. So, even if world grain prices fall, the outlook is still bleak for the housewife.

I understand from people who should know that even if housewives take direct action by going on strike and boycotting the food shops it will do no good. I read in the Evening Standard of Monday 26th November that a butcher boycott would mean less meat and higher prices: Housewives were given a warning today that a boycott of butchers would drive meat out of Britain and into shops on the Continent. It came from Mr. Colin Cullimore, general manager of one of Britain's biggest butchers. Once again, dire warnings are given, and if housewives dare to protest too loudly the farmers will send the meat over to the Continent where they can get the price they want.

Added to that bleak outlook we shall also have to contend with further large increases in the price of freight. Fuel charges will rise, and that is bound to have an effect on prices. We have not heard about this yet; we shall perhaps hear about it before Christmas. The Minister may wish to comment on it if she intervenes.

What can the Government do? [HON. MEMBERS "Resign."] The sooner they resign the better I shall be pleased. Assuming that the Government intend to cling to office until the last moment, what can they do? They can do plenty if they have the will. To begin with, they can look at retail margins. I understand that they are based on percentages rather than cash margins. The Government could certainly institute price controls at retail level. We believe that this is possible and highly desirable. The Government should examine this possibility. The Government can also postpone the next round of import duty increases. But, first and foremost, they can adopt a policy of applying direct food subsidies on a wide range of essential foodstuffs.

That is the direct action that the Government should take. That is the sort of direct action that will help to cut the rise in prices at a stroke. That is the "stroke" we want from the Prime Minister. I realise that the Government so far have been adamant in their refusal to adopt this course of action, but, after all, one U-turn more in the succession of U-turns will not make much difference. It will be neither here nor there.

According to a leader supporting this course which appeared in the Observer of 8th July 1973 it seems that that would not upset Conservative dogma: The prices that matter are those that affect the cost of living, and particularly the costs of basic foodstuffs, because these hit the poorest most. What can be done about them? Certain basic foodstuffs, like wheat and butter, should be subsidised "— the Observer is not a Labour paper— Some already are; so there is no sacrifice of Conservative dogma called for here … Across-the-board assistance of this kind goes, unnecessarily to rich and poor alike. And, of course, it all has to be paid for by increased taxation. But these drawbacks, while not exactly academic, are comparatively trivial beside the urgency of containing inflation. People are not going to eat all that much more of a few selected foodstuffs merely because their prices are stabilised. The Government, without any sacrifice of dogma, can take this direct action by subsidising food prices. This would do more than anything to help to stabilise or cut down price rises and to counter the inflationary situation which now faces us.

I know that many of my hon. Friends—and, I hope, one or two Conservative Members—want to take part in this debate, so I shall keep my remaining remarks brief. I conclude by saying that, when I examined the evidence on which this indictment of Government policy was based, it was difficult to sift out the evidence I needed from the mass of evidence available. There is a huge mass of evidence to support the indictment against the Government, and there are hon. Members present—many perhaps more qualified than I to speak on this subject—who will support that indictment. Today's Guardian sums up the situation in the following way: Cost of living could be up 9 per cent. by May". That headline is based on the Government's own forecasts. The Guardian article rightly says that if this increase happens, a coach and horses will be driven through the Government's prices and incomes policy. But more than that will happen, because the whole edifice of our society will be in danger. There is a point beyond which people will no longer put up with price rises; hyper-inflation will be with us. We are now on the threshold of hyper-inflation. If that happens, we are all aware of the dangers to our institutions and our political life. In such circumstances food riots cannot be ruled out.

Therefore, I implore the Government to take note of this debate and take in what I have said, and what other hon. Members will say after me, about directly subsidising food prices. I regard food subsidies as the No. 1 food priority, because over the next few months, in view of the oil shortage, incomes will fall—and they will fall at a time when prices are still rising. That spells very big trouble. I implore, indeed I beg, the Government to take this matter seriously, to give our people a break and to save us from the ravages of the hyper-inflation to come.

4.34 p.m.

Mr. Charles Morrison (Devizes)

In his concluding remarks the hon. Member for Swindon (Mr. David Stoddart) implored the Government to take food prices seriously. Purely by way of introduction, I assure him that everybody on the Conservative benches takes the matter of food prices with great seriousness and with no complacency whatever.

Other hon. Members in the House may be forgiven for assuming that this debate is becoming almost a Wiltshire affair. Since the hon. Member for Swindon is my nearest neighbour, I wish to start by congratulating him on being so lucky as to come out on top in the Private Members' ballot.

I give the hon. Gentleman full marks for consistency because he has said nothing today that has not been said on many occasions before. On the other hand, I give him no marks for originality, but some marks for accuracy since I suspect that most of the figures quoted at the beginning of his speech are just about accurate. However, it does not need the hon. Gentleman to tell people about the level of prices. Unfortunately, they already know the level of prices and are reminded of them only too often, and in many cases every day. But what they and the House must concern themselves with is the reason for the price increases and the question whether the Government are doing everything in their power to counteract those price increases and to cope with them. I believe that, broadly, they are doing so within the limitations imposed upon them. Therefore, on the basis of accuracy of assessment of the criteria the hon. Gentleman has done very poorly and should get no marks at all.

The hon. Gentleman referred to world prices. They are the one simple overriding reason for price increases. Until recently the United Kingdom benefited from the existence of cheap world food supplies. But the era of cheap food has gone—at least for the present, and probably for some time in the future. Indeed it seems unlikely at this moment that cheap food will return. To corroborate the fact that there is no cheap food available, I turn to the October issue of a magazine entitled Land Worker, the Journal of the National Union of Agricultural and Allied Workers. That publication states that: … for most foodstuffs … world prices have gone sky high—well above EEC prices. Additionally the Economist index shows how incredible has been the world food price increase. In August this year the food price increase was 706 per cent. above the figure for August 1972. The latest figure for December 1973 compared with the December 1972 figure shows a much lower increase of 37.1 per cent., but it is nevertheless a remarkable increase.

We must always remember that we in the United Kingdom import half of our food. Therefore, the impact of food price increases is bound to be considerable and totally beyond the control of the United Kingdom Government. When we couple food price increases with price increases in other commodities world wide, the situation is again beyond the control of the Government and is likely to become even worse since all manufactured and processed foods have within their price a large element of other costs.

The motion implies that inflation is the main cause of food price increases. Frankly, I think that this is nonsense. When the effect of higher import costs is discounted, Britain in recent months has had the slowest home-produced inflation of any OECD country. If the hon. Member for Swindon wishes to obtain corroboration of that statement, he can refer to the Economist of 17th November where he will find ample testimony to the success of the Government's anti-inflation policy.

It is also a regrettable fact that poor world harvests and growing demands for higher quality foods throughout the world have forced up prices considerably. Let us take, as an example, the Soviet Union. Russia was at one time a grain exporter, but at present is a considerable importer. Let me give another example which shows how demand has increased. In 1959, Australia exported 324,000 tons of meat, including 213,000 tons to the United Kingdom, and only 1,200 tons to Japan. This year, 1973, Australian exports have risen to 823,000 tons, of which only 153,000 tons will come to the United Kingdom, while Japan will have increased her imports from 1,200 tons to 191,000 tons, and in that same period—1959 to 1973—the United States has increased her imports from Australia fourfold.

Against that kind of background—and we must appreciate that the effect of the oil shortage is unknown, and will remain so for some time—it was refreshing to hear the honest admission of the hon. Lady the Member for Hitchin (Mrs. Shirley Williams) on the "World At One" on 23rd November, when she said: I am bound to say that what the Government can do is very limited because one of the factors which no Government can change is that there has, of course, been a move towards a shortage of all sources of raw materials. The hon. Lady went on to say: But let me make it absolutely clear I do not pretend that I, or anybody else, have got a simple answer to the problem of rising prices. The hon. Lady is an honest person, and that is the sort of comment that one would expect from her.

The motion refers to the imposition of tariffs and levies, to the need to defer tariff increases, and to the need for a reform of the CAP. First, it should be said again that tariffs and levies are part of the CAP which was accepted in principle by the Labour Party when it was in office. Secondly, world prices are so high that the effect of EEC tariffs is minimal, and sometimes has the effect of lowering prices—[Interruption.] Labour Members may not accept that statement, but it is true.

Butter prices are 30 per cent. lower for New Zealand supplies, and 25 per cent. lower for Danish supplies than they were at their peak 19 months ago. Imports of pork and bacon from outside the EEC now carry an import charge of about £25 to £35 a ton, compared with £50 to £70 a ton under the preaccession régime. We are able to buy French wheat at £15 per ton less than we would be able to buy it if we were outside the Community.

The hon. Member for Swindon said that we had had a much larger food price increase than in other countries, and he referred to a number of countries in the EEC. Percentagewise our food prices have increased more than theirs but that is because prices in those countries started at a higher level, as we were continually reminded when the Labour Party was opposing British entry into the Common Market.

What has happened is that we have had to suffer a larger rise to level up to world prices, compared with the rise that has been imposed in other countries of the EEC. That has been to their advantage, but it does not mean that our prices are now much higher than theirs. As a matter of fact, food price increases in the EEC have generally been less than in many other countries throughout the world outside the Community. The increase in the United Kingdom this year has been 6.6 per cent., compared with 16.1 per cent. in the United States.

The hon. Gentleman referred to the reform of the CAP, and his motion, too, makes reference to that. With no help whatsoever from the Opposition, my right hon. Friend the Minister of Agriculture, Fisheries and Food, at meetings of the Council of Ministers, and Conservative Members who are Members of the European Parliament, are striving for reform, and I have no doubt whatsoever that that will be achieved so that there will be a CAP that is better designed for the EEC of the Nine than it was for the EEC of the Six. Instead of their carping criticism, Labour Members might give some credit to my right hon. Friend for the initiative which he took last spring and which has already produced some proposals for a change.

The motion—and not surprisingly the hon. Gentleman dealt with this in his speech—refers to subsidies for certain basic and essential foods. The hon. Gentleman enumerated one or two items, but he did not say at what level the subsidy should be, nor did he instruct us on what the cost might be to the taxpayer. In short, the hon. Gentleman's proposals for subsidies seem entirely open-ended and, to that extent, irresponsible.

Does not the hon. Gentleman know, for example, that to reduce food prices to last year's level would cost £1,400 million in subsidy?

Mr. David Stoddart

I do not think that I or anybody else has suggested that prices should be reduced to last year's level. What we are suggesting is that subsidies should be applied now to prevent prices from rocketing up at an even faster rate. That is the suggestion.

Mr. Morrison

The hon. Gentleman has made my point. He says that subsidies should be open-ended so as to ensure that prices will not continue to rise. Perhaps I may continue the point that I was making, because it is important that the House should be aware of the implications of food subsidies.

If it is the intention of the hon. Gentleman, or of the Opposition, to reduce prices to last year's level, what would that mean in terms of increased taxation? If there were a £1,400 million subsidy on food, it would mean the doubling of VAT and, at the same time, a 10p increase in income tax. It would mean that a man with two children and earning the average industrial wage would pay an extra £1.50 a week in taxation.

Mr. Harry Lamborn (Southwark)

The hon. Gentleman says that a working man would have to pay extra in tax. The position now is that because those on lower incomes spend a greater proportion of their incomes on food the less well off are paying more than the proportion envisaged by the hon. Gentleman.

Mr. Morrison

The hon. Gentleman has not understood my point. I am saying that a man earning an average industrial wage would have to pay that much more. I am not talking about the chap who is paid less than the average industrial wage. The Opposition are advocating subsidies, which would involve higher taxation. Much of the extra money would come from people on average earnings, and some from those on lower-than-average earnings. In addition, a lot of the extra money would be used to subsidise those who have earnings way above the average earnings level, because subsidies would be provided across the board and not limited to those on lower rates of pay.

On the other hand, as the hon. Gentleman has pointed out, there is no dogma in the Conservative Party in respect of food subsidies, as for example regarding milk. I strongly object to uncosted general requests for subsidy. The hon. Gentleman's question as to what the Government can do was much more relevant. The Government have done, and are doing, a great deal, first, through the abolition of purchase tax and selective employment tax. [HON. MEMBERS: "Oh."] I wonder whether Opposition Members have any memory at all. By the abolition of these two taxes, taxes on food have been cut by £225 million.

Secondly, the introduction by the Government of the annual increase in retirement pensions has ensured that pension increases have kept ahead of price increases. Thirdly, the family income supplement has assisted the lowest paid. Fourthly, the Price Commission, established by the Government, has estimated that it has saved consumers £320 million by rigorous scrutiny of applications for price increases. Fifthly, the Government's strategy on economic expansion has helped, though indirectly. Sixthly, the Government have done much to encourage home agricultural production. Since 1970 a combination of good weather, good farming and good Government policy for agriculture has produced a remarkable expansion in the industry. Currently the livestock sector—

Dr. Shirley Summerskill (Halifax)

Is the hon. Gentleman not aware that there is massive discontent among farmers throughout the country regarding the price of animal feeding stuffs? In my constituency, which is predominantly industrial, farmers are up in arms about the Government's general policy towards them. How can the hon. Gentleman say that there is expansion in farming?

Mr. Morrison

The hon. Lady has taken the words out of my mouth. I was coming precisely to that point. She might care to look at the figures published in the annual farm price review, and elsewhere, to see the overall expansion of production in agriculture.

The hon. Lady is right regarding the livestock sector. At present there is a trauma running through that sector of agriculture, arising from high feed prices. Undoubtedly this is, in the short term, reducing output of some products, particularly milk. I am, nevertheless, looking to the Government with a lot of optimism and I hope that they will restore my confidence. [Laughter.] The Opposition may scream with hysterical laughter, but the state of agriculture is not to be laughed at. It should be looked at seriously, and judgments should thereafter be made.

No doubt when the Government conclude the present farm review negotiations and discussions they will be able to announce the results which will restore confidence throughout the agricultural industry, particularly in the livestock sector.

Mr. J. R. Kinsey (Birmingham, Perry Bar)

Would not what the Opposition suggest mean to some degree putting up prices to the consumer again?

Mr. Morrison

Not necessarily—it depends what particular action the Government propose whether prices of agricultural commodities increase. It could be that prices of some commodities will increase, but if agriculture at home does not expand it is more likely that there will be price increases purely and simply because there will be an even greater shortage than would otherwise be the case in some products, particularly in the livestock sector.

Short of sending hundreds of efficient British farmers to help remove the inefficiencies and ineffectiveness of agriculture in the Communist world—which is the cause of much of the current world food shortage—the Government have done, and are doing, most things in their power to counteract food price increases. I emphasise that no-one can be complacent about food prices and I suspect that there is no other subject to which the Government pay more attention. The motion does not stand up. Nothing which the hon. Gentleman said makes it stand up and, therefore, I hope that the House will reject it.

4.56 p.m.

Mr. Douglas Jay (Battersea, North)

The hon. Member for Devizes (Mr. Charles Morrison) said that food prices were totally outside the Government's control, but what has never been explained is that if that is so, why did the Prime Minister give a categorical promise that he would bring down food prices?

Mr. Morrison

I did not say that. The right hon. Gentleman will see from the record that I referred to world food prices.

Mr. Jay

That may be so. If it is so, and if world food prices have such an obvious effect on our prices, why did the Prime Minister give a promise to bring food prices down? That remains unanswered.

I extend my sympathy to the hon. Lady the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food because it seems that there is not one of her ministerial colleagues willing to sit beside her and support her today in her difficult task. Can she first clearly explain what sort of control the Government are exercising over food prices at retail level? I also wish to follow up what was said by my hon. Friend the Member for Swindon (Mr. David Stoddart) when he asked whether fixed percentage margins are being allowed to the distributive trades under stage three; or are fixed cash margins to be the rule? This is a rather technical point but it is more important than might be supposed.

I remember that in discussions some years ago about the effect of the Common Market on food prices in this country I always found some people a little slow to understand that if distributive margins remained as a fixed percentage, the effect on rising food prices here would be much greater than if it were a case of cash margins. It is a simple but curious arithmetical fact that if distributive and other margins are 50 per cent. of the final retail price—and I believe that they are something like this—a 100 per cent. rise in the import price with fixed cash margins will lead to only a 50 per cent. rise in the retail price; whereas with fixed percentage margins a similar rise in the import price will lead to a 100 per cent. rise at retail. Therefore while this may appear as a technical point, it has much to do with the present situation, and it may explain a lot of what is happening. What is the Government's position under stage three?

As we heard, however, from the speech of the hon. Member for Devizes, the major cause of the trouble is not a matter of distributive margins in this country. The major causes of the high prices now being inflicted on the British public are the temporary rise in world grain prices and the Government's blanket acceptance of the common agricultural policy of the EEC.

It is no good Ministers denying that the Government are deliberately raising food prices, because the EEC settlement forced them to do so. Ministers have said this themselves. The Minister of Agriculture, Fisheries and Food said it in this House on 21st February; and as recently as 15th November the Prime Minister said in this House: … in the longer term … we shall be moving up to Community prices."—[OFFICIAL REPORT, 15th November 1973; Vol. 864, c. 661.] That is what is going on. Now that the Prime Minister has himself admitted this, I hope that lesser Ministers will no longer try to deny it.

The case against the Government is not that the rise of food prices is due wholly to their actions or their Common Market policies. In my judgment the case is really three-fold. First, at a time when world conditions would have pushed up food prices anyway, instead of doing their best to keep them down, as any sensible Government would have done, the present administration have gratuitously forced them up further by capitulating completely to the common agricultural policy. Secondly, they have pledged themselves to raising a whole series of food prices under the CAP still further over the next three or four years. I do not think that the hon. Lady will deny that. Thirdly, as world food prices fall, as some almost certainly will, grain especially, the gap between world prices and EEC prices will grow wider and wider. This means that the worst damage to this country is still to come, and that it will grow even greater if we continue to submit to the CAP.

Prices have been forced up already by the CAP further than they need have been. No one really believes the Government's propaganda that the CAP has added only 1 per cent. to food prices so far, especially after Mr. George Thomson himself told us that it was five times as great. But perhaps not everyone has seen through the exact form of the deception on which this fable has been based.

These official estimates of 1 per cent. purport to measure only the technical consequences of the CAP since February 1973. But a very large part of the rises due to the CAP was felt before February 1973, both because the Government put into effect a number of food import taxes and increases in such taxes leading up to the date of accession, and because, as the hon. Member for Devizes admitted, our traditional low-cost suppliers such as Australia and New Zealand, when negotiations started two or three years ago, changed their policies in self-defence and began to switch their supplies elsewhere in anticipation. They cannot be blamed for that.

This Government imposed import duties on mutton, lamb and beef as far back as 1971 in anticipation of joining. Traders also naturally pushed up prices in expectation of the EEC higher prices which were already prevailing on the Continent. At the same time Australia and New Zealand, the most efficient producers of butter and cheese as well as of mutton and lamb in the world, were given notice more than two years ago that their butter and cheese would be virtually phased out of the United Kingdom market by 1977. Having for years treated the United Kingdom market as an assured and favoured market, and having pursued a deliberate long-term policy designed to keep prices low, they started to divert supplies elsewhere. That is the folly and tragedy of the situation that we face. And, as my hon. Friend the Member for Swindon said, Australia and New Zealand, for the few remaining years in which they were allowed to have a market here, naturally let prices rise in order to do as well as they could.

Butter is already up 25 per cent. and cheese 75 per cent. since negotiations started, though naturally none of this is included in the Government's 1 per cent. since 1973. Even so, to give one example, we are at the moment paying 21p a pound for New Zealand butter, whereas the price that members of the Common Market have to pay if we buy from the Brussels butter mountain is almost double at 40p. If we were outside the EEC, like the fortunate and now flourishing Norwegians, we could buy from the butter mountain as the Russians did, at 8p a pound compared with the official price of 40p.

There is a similar situation with imported lamb, where the rise is about 100 per cent. since negotiations started. This rise in price is in no way due to the world - price of feeding stuffs, because New Zealand lamb for practically the whole year t is fed on grass. The rise is due, first to the import duty already imposed to appease the EEC, and secondly to the fact that New Zealand was forced by our policy s to switch supplies elsewhere, and actually to put a tax on supplies sent to the; United Kingdom in order to speed up the; diversion elsewhere against her will.

The same is true of beef and bacon where, before entry, Ireland, Denmark, Poland and Argentina—and Australia in beef—competed in the United Kingdom as their main market and normally kept down prices. Now, as long as we are members of the EEC, the CAP imposes a floor price at an extremely high level, especially in the case of beef.

There is another major price-raising effect of Market membership which is not allowed for even in Mr. Thomson's 5 per cent. It is the effect of the devaluation of sterling. A major part of the rise in sterling food prices in 1973, which the Government call the rise in "world prices," and say is nothing to do with the EEC, is due, not to food factors at all, but to the 20 per cent. fall in the value of sterling since 1971. This is confirmed by the fact that in 1973 the industrial countries with strong currencies have shown the least rise in food prices. Compared with our rise of 15 per cent. between August and August, countries such as Norway, Switzerland and Sweden—

Mr. Roger White (Gravesend)

Oh, come!

Mr. Jay

The hon. Member for Graves-end (Mr. Roger White) will find the figures in HANSARD for 9th November. In Norway the rise has been only 5.2 per cent. in the same period.

The fall in sterling has been due largely to the disastrous trade deficit, now of £900 million, incurred by this country with the EEC Six in the first 10 months of this year. Much of the rise in food prices this year is due to the fall in the value of the pound, and that fall in turn is largely due to the enormous visible trade deficit that we have incurred with the EEC. And that part is not included in the 1 per cent., either.

If therefore we look at the total effect on food prices, direct and indirect, of EEC membership, and not just at the technical 1973 effect, there is no serious doubt that a substantial part of the 45 per cent.—now 47 per cent., I understand—increase in retail food prices since the negotiations began is due to Market membership and can be reversed only if we are wholly freed from the CAP.

In any case, how can Ministers maintain that the imposition of a battery of import taxes on food, and all the price raising and denaturing activities of the Intervention Board, have not raised prices? How can they have had no effect on prices? To give one or two examples, the import levy now on butter imports from our natural low-cost suppliers is £195 per ton. On cheese it is £328 per ton. These levies represent taxes of about 50 per cent. on the import price. Does that really have no effect on prices? If it does not and if, as the hon. Member for Devizes suggested, all these high prices are due to other factors which have come to stay, why do we have to impose these taxes? Why not remove them forthwith?

On beef, even at present famine prices, there is already an 8 per cent. duty on non-Commonwealth imports and 4 per cent. on Commonwealth supplies, both due before long to rise to 20 per cent. If beef prices fall only a fraction from the present peak levels a levy will be imposed in addition to the import duty. How can all that not affect the price? It is ridiculous to argue that.

On bacon, the levy is £35 a ton and canned ham, according to the latest figure, is £165 a ton.

On mutton and lamb the duty is already nearly £20 a ton and will be replaced in the coming year by an import duty of 8 per cent. which will rise before long to 20 per cent.

Indeed, the latter is only one example of the new or increased food import taxes to be imposed under the Import Duties (No. 8) Order which is to come into effect on 1st January, although it has not yet been debated in this House. This will mean, in addition to the import levies, new or increased import duties on the main foodstuffs coming from our principal suppliers in the Commonwealth—Canada, Australia, India, New Zealand and others. These new or higher duties—the Minister can contradict me if I am wrong—will apply to meat, fish, eggs, vegetables, fruit, and even, apparently, tea from India, Bangladesh and Ceylon. I should like to know whether that is correct, as I thought we were previously assured that there would be no tax on tea from the Asian Commonwealth. If the hon. Lady can assure us about that we shall be extremely grateful. But that is not what the Import Duties Order appears to imply.

On top of all these levies and taxes the Intervention Board, on the Minister of Agriculture, Fisheries and Food's own figures, has already this year spent £17 million on intervention buying and aids to private storage and a great deal more on denaturing wheat.

All these facts to date are only the beginning of the story. Our food prices, if we continue to accept an unreformed common agricultural policy, will rise far further over the next few years, with all the wrecking effect that is bound to have on the British economy. The price of butter, which now stands at a little over £400 a ton, has to go to £826 a ton over the next three years—more than double the present figure.

We are committed to all these high price targets if we remain members of the EEC. But, as world grain prices fall from their present record level, the damage to the United Kingdom from being forced to maintain the artificial EEC prices rather than take advantage of lower world prices will grow even greater.

It is surely madness to add this extra artificial burden of food import prices to our balance of payments, just when we are to be forced anyway to bear an immense burden from higher oil prices, whether we like it or not.

Let us consider the crucial case of wheat, where the prospect—I am sure even the hon. Member for Devizes will agree—is probably now for lower rather than higher world prices. Limits on North American output have been removed altogether. The hon. Gentleman spoke of our assisting Communist countries to improve their agriculture. I expect he knows that out of Russia's total grain harvest this year of 215 million tons, actually 107 million tons is wheat—an all-time record, and more than double the United States wheat crop. So there are solid grounds for thinking that grain prices may come down. Yet the present EEC floor price for wheat is £49 to £54 a ton compared with a United Kingdom guaranteed price before entry of only £34 a ton—and the consumer often paid less. Similarly, the present EEC price of beef is 50 per cent. above the previous guaranteed price in this country.

All this means that if we continue to be bound by these policies we cannot take advantage of falling world prices in future. In addition, any further fall in the value of sterling will mean an automatic rise in food prices all round, which need never have been true and was not previously true in this country.

I would sum up the simple truth of this story as follows: that a large part of the 47 per cent. rise in food prices in the last three years in this country is due to the deliberate action of the Government in applying the common agricultural policy, with all its now visible consequences on the balance of payments and on the possibility of a rational incomes policy; that far greater increases are still to come if this policy continues; and that there is no tolerable way out other than a fundamental renegotiation or total abandonment of the CAP

5.16 p.m

Mr. J. R. Kinsey (Birmingham, Perry barr)

I should like to add my congratulations to the hon. Member for Swindon (Mr. David Stoddart) who has indeed chosen an important subject for us to debate today. I shall follow his arguments, but he will not be surprised if I come to a different conclusion from that to which he came.

My hon. Friends and I put down what we thought was a reasoned amendment which would replace the myth of the motion as it now stands and put the reality of the situation, over which the hon. Gentleman glossed, about the diffi- culties facing not only this country, but every nation of the world.

The trouble with the argument put forward by the hon. Gentleman is the same as the trouble with the whole of the Opposition's argument—namely, that they either misrepresent the situation for political ends, or, worse still, they do not understand it, and, not understanding it, they will have no hope, if they ever get the opportunity of holding office again, of correcting it.

Mr. Nigel Spearing (Acton)

The hon. Gentleman has accused hon. Members on this side of the House of either not knowing or misrepresenting the situation. Will he, with respect to the speech made by my right hon. Friend the Member for Battersea, North (Mr. Jay), tell me where he was either wrong on facts or sought to misrepresent the facts that he presented?

Mr. Kinsey

If I might be allowed to develop my speech the hon. Gentleman will hear where the Opposition went wrong. But he jumped in pretty quickly—the Opposition always jump in too quickly—without waiting for the explanation. The right hon. Member for Batter-sea, North went wrong when he told us that the industrial nations had done much better than we had. Japan is now second from the top of the list. That is one nation that is supposed not to be doing well. Canada, Australia and the United States are at the top of the list.

Mr. Jay

Will the hon. Gentleman give way?

Mr. Kinsey

No. I have already been taken off the course of my speech in the first few minutes. Obviously that is what hon. Gentleman opposite want to do. They want to detract away from the attack on their frivolous opposition to a serious situation.

This nation, as my hon. Friend the Member for Devizes (Mr. Charles Morrison) said, imports 50 per cent. of its food. This makes us far more vulnerable than any of the agricultural countries that have been mentioned. The bill that the nation has had to face for food imports since we took office in June 1970 has gone up by 77 per cent. This figure was given by the Minister in November. This is due to inescapable prices on the world market. At the same time, retail prices went up by 44.8 per cent. in this country. These figures show that the Government have been doing quite well in maintaining the level of retail as against import prices.

Later figures which I have obtained from the Ministry today show an even more alarming situation. Over the last 12 months alone, from October to October, food import prices are up by a massive 50.9 per cent.—inescapable again. During this time retail prices in this country went up by only 18.7 per cent.—considerably less than half the food import bill. That is an absolute compliment to my right hon. Friend the Minister of Agriculture, Fisheries and Food and to the other Ministers in the Department for the way in which they have assisted in this direction.

In addition, we should thank the food manufacturers and the distributive trade for what they have done in absorbing so much of these costs. The Government's incomes policy has also helped to take the heat out of the massive increase in world prices. Quite clearly the competitive system does its work in this direction. Nor should we forget to thank the moderate men in the unions. They have co-operated through stage I and stage 2 of the incomes policy, and their restraint is reflected in these figures. Wages are an important element in costs, as we have often said in this House, but in the last 12 months or so they have been overshadowed by the increase in world food prices.

I suppose that with these rather dismaying figures that have been quoted, it is difficult to claim any success in our policies, but they really have been successful. The Economist of 17th November, to which my hon. Friend the Member for Devizes referred, shows clearly that we are gaining, and that whereas in 1970, under a Socialist Government, we were top of the list of those suffering inflation the most, we have now changed our position to 14th in that list—14th out of 17. That article is headed: The miracle that Ted pulled off and nobody saw him do it. I assure hon. Members that we on this side of the House did not write that article. It refers to Britain as being "top of the pops", a situation which is hardly recognisable compared with what the Opposition have said this afternoon. Britain wants the best people to handle this situation of food prices. The important question is: who will handle the situation better—the Socialists, or the Conservatives under whose régime our position in the inflation league came down to 14th?

What has caused the present situation and these high prices? Is it the Common Market? Are all those things to which the Socialists have referred responsible for the situation? In fact, it is shortages. That is supported by sources independent of the Government, such as the United Nations Food and Agriculture Organisation The Financial Times, reporting on its meeting in June of this year, said that world food stocks were at their lowest level in 20 years; heavy snows and severe flooding in America … catastrophic drought in much of Africa … all of which had contributed to the all-time world food shortage.

Obviously the answer to world shortages is to get a world expansion, and here is where I thought the Socialists might help. Instead, they have concentrated on a niggling attack on Government policy. The major problem is to improve the diminishing stock of food. We cannot do this by giving a diminishing return to the producer. That point was made by the hon. Lady the Member for Halifax (Dr. Summerskill) who wanted to know why our own producers were not given an adequate return. Although we have to reward people, we cannot improve food production by indiscriminate food subsidies. It simply will not work by giving subsidies to quarter-millionaires such as the Leader of the Opposition who has made a bit of money out of a book that he has written. He would get the same subsidy as an old-age pensioner. Who wants that situation? We must restrict any increase in subsidies; otherwise we increase the tax bill. We have seen this happen before.

Much criticism has been made of the Common Market agricultural policy, particularly in the speech of the right hon. Member for Battersea, North. Yet that policy is designed to increase the output of world food. It is the one thing which will improve the food supply position. I am no fanatical Common Market man, but I should like to quote from the Daily Mail of Thursday, 20th September: A bid to head off a world famine which one expert believes could kill up to 10 million people in a year opens in Rome …". That referred to a meeting of representatives of the great exporting areas. It went on to say: Soaring prices will effectively ration housewives in every major population area—except the Common Market, for the EEC's heavily criticised Common Agricultural Policy has suddenly begun to benefit the consumer instead of the farmer. I am not satisfied with the working of the Common Market agricultural policy. This has been made clear. The Minister and hon. Members whom we have sent to Brussels have put forward our case. We want amendments to be made to the working of that policy. But we have to be there to do it. Which Socialist Members are in Brussels? What have they done to bring prices down? They are here, but they are not in the right place. They are here, carping at the Government—

Mr. David Stoddart

The hon. Gentleman is waxing very eloquent about what these chaps are doing in the Common Market parliament, but I have not noticed that they have done anything, nor do I know that there is anything that they can do. Will the hon. Gentleman say what powers they have?

Mr. Kinsey

The hon. Gentleman's interpretation of what people can do differs from mine. I have every faith in my hon. Friends and in what they have done for our protection. Their powers are as great as anybody's. It is our job to be there to do it. One cannot do it by stopping at home.

Another way in which the Government have worked successfully and had an impact on prices is in the level of taxation. We have done exactly what we told the nation we would do. We have kept our promise. Personal taxes are down, SET is abolished, purchase tax has been replaced by VAT, and the level of tax has been reduced at many points. The change over to VAT and the abolition of SET have saved the British taxpayer £900 million. No policy under the Socialist Government ever did that, and no policy which the Opposition now propose would do it. The removal of purchase tax on food alone has given £2 per year per head to the British people. This is but another example to show the way the Government have worked and have carried out their promise. Prices were cut at a stroke.

Every hon. Member received a letter from Fine Fare announcing that after the abolition of SET prices would be cut. Dewhurst, the butchery firm, sent a letter to every hon. Member saying, The abolition of SET enables Dewhurst to slash beef prices. And so it did. This is the way things went. Food prices were cut at a stroke under this Government. When VAT came in, food prices were cut, because VAT was not levied on food whereas, under both Governments, purchase tax was charged on various food items.

Those are examples of the way in which the Government have worked successfully on prices. The savings on VAT were enormously helpful to the family. However, as we know, they have been overtaken by the escalation in world prices which, as I say, is unavoidable. But we did what we promised to do. We should never be mad enough to put those taxes back, should we? I say that, but we can be pretty sure of what would happen under the Socialists. The right hon. Member for Leeds, East (Mr. Healey) has already told us what their policy is—tax till it hurts. Anybody with an income of £3,000 a year or more will be taxed till it hurts. That would put about £3.50 per week on to each family in the country, which was just about the amount of taxation which the last Socialist Government imposed on the country—£3.50 a week, or a total of £3,000 million. That gives some idea of what we could suffer under another Socialist Government, with all the consequences for the nation's food bill.

One factor in the overseas context, which, I agree, is inescapable, is the devaluation of our currency. But the industrial unrest which is fomented by hon. Members opposite in their support for every wage claim which comes along is a factor which destroys confidence in Britain's economy, and that is where our currency comes under attack, leading to devaluation. The Opposition's peace formula, based on co-operation with the unions, would be an impossible deal, with unrestricted wages and restricted prices. Such a proposal is economic madness, yet they dare to put it forward. There can be no substitute for voluntarily co-operation on prices between Government, workers and business. The success which we have attained so far proves that that policy is right.

Those who are threatening industrial unrest—the miners, the power men and the railway workers—should think again. I urge them to think again, to return to the policy which has been so helpful up to now, that is, co-operation with the Government. We are fighting a battle in this country now. What would our position have been in past battles if, for example, we had gone on strike at Dunkirk, or threatened industrial action at Waterloo?—which, incidentally, has a familiar ring about it.

It has been said more than once in the House that men cannot dig coal with bayonets. But not all enemies carry bayonets. The economic enemy is the enemy now, and it must be defeated. We can win only by production, and that is the Government's policy, to expand production. It should be supported by everyone. We can get out of our present difficulties only if we work together and fight together to beat inflation and bring prices down.

5.35 p.m.

Mr. Emlyn Hooson (Montgomery)

I felt some sympathy for the hon. Member for Birmingham, Perry Barr (Mr. Kinsey) because he manifested such a touching faith in his Prime Minister. He wanted to claim that his Government's policy had been a great success, yet he obviously could not think of any possible grounds on which he could sustain such a claim. In the end, of course, the hon. Gentleman failed to do it. Indeed, my impression is that if the Prime Minister now found that he could cut prices, he would have a stroke such would be his surprise.

The indictment against the Government is that they misled the country on food prices. No one doubts that world food prices have had an enormous effect on food prices in this country, yet the rise in those food prices was manifest when the Prime Minister made his claim, with an eye only on political considerations.

The truth is that this country is in a serious situation. For a long time, we were the beneficiaries of cheap food supplies from the rest of the world. In the historical context, one may argue about whether this was fair as between the developing countries and ourselves, but the fact remains that the statistics which have been used today in relation to other European countries and ourselves to show that the percentage rise has been greater here arise from the historical circumstances that in the past Britain had based its policy on cheap food. Our cheap food policy was an important element in Britain's industrial development and the industrial predominance which it enjoyed over many years, and when that policy came to be changed—a most significant historical event for us—the nation was ill prepared for it.

The Government, the Opposition and members of my own party have a good deal to answer for in not telling the country, and in not themselves sufficiently analysing the enormous changes which would come if we entered a dear food Community. I am one of those who believe that we should not have gone in at the time we did, for obvious reasons. Those reasons have been proved to be well founded, but I take no pleasure in that. All I say today is that, whatever one may think about it, if we withdrew from the Community now we should be in an even worse state.

The right hon. Member for Battersea, North (Mr. Jay) was right to point to some of the factors in the Common Market negotiations. In passing, I must remind him that the relevant time was not two or three years ago. Negotiations took place in the days of his Government as well, so the period is much longer than that. Our traditional suppliers were already considering what they would do if Britain entered the Community. They were considering new markets and looking to the time when they would have to cope with a different situation if Britain joined the EEC.

Mr. Jay

I agree that the Labour Government's application did harm, but, to be strictly correct, it was an application and there were no actual negotiations.

Mr. Hooson

Technically, that is right, but it had the same effect. That is the point I make. We must be realistic about it. It had a substantial effect upon our traditional suppliers over a period of time. All I am saying now is that, historically, the die is cast. We cannot go back to our traditional suppliers. It is most important, therefore, that we bring all possible power to bear to change the common agricultural policy. There can be no doubt about that. There are hon. Members on both sides, whether in favour of the Common Market or not, who do not support the common agricultural policy.

We must make a realistic assessment of whether world food prices are up temporarily or permanently. It seems to me that, over the past two or three years, certain unusual factors accounted for the rise in grain prices, in particular. I do not think that the same applies to beef, lamb or pork prices, although pork is much more linked with the price of grain than are the other meats.

The additional acreage brought into production in the United States and the improvement in the Russian harvest give cause for hopes that grain prices might drop. I estimate that it will not happen before 1975, however. I do not know what the effect of the fuel crisis will be. It could mean that we shall not enjoy the benefit of the lower grain prices. Let us assume, however, that, as in the normal course of events, grain prices were to fall. We would be in a ridiculous position if we were still tied to the common agricultural policy with its highly sustained grain prices.

I represent an agricultural livestock area. I know how many small livestock farmers and dairy fanners are struggling today. If there is one thing they hate it is Ministers quoting across-the-board figures for farmers' incomes—lumping the corn barons together with the livestock farmers in the western parts of the country. It must be in the overwhelming interests of the country to make serious modifications to the CAP and I further criticise the Government for pussyfooting in their attitude towards it. I am sure that all the pro-Marketeers will agree with my criticism that we have not been throwing our weight about in the Common Market as we should have done. The Common Market countries are certainly benefiting from having access to our markets and we therefore have considerable bargaining power.

I take the view that in the long term the balance of power is shifting, as I have forecast in almost every agriculture debate in which I have spoken, steadily in the direction of the primary producers. I think that certainly applies to agriculture and energy and probably to many other spheres also. What does that foretell for Britain, the EEC and the whole of the Western world? Except for those who are much more self-sustaining than we are, it represents a most serious situation which goes above party politics.

I congratulate the hon. Member for Swindon (Mr. David Stoddart) on his luck in winning the ballot and on the way in which he presented his motion. I criticise him in one respect, however—over the completely unnecessary last few lines of the motion relating to the Labour Party and the TUC which prevent my party voting for it. He said nothing about that aspect of the motion but it nevertheless excludes those who feel very much as he did from voting with him.

The Government are too sanguine about food prices. At the Liberal Party Assembly in September I said that I thought there would be a serious food shortage next spring with the possibility even of rationing for some goods. I was criticised then for taking such a pessimistic view. I believe now that the fuel crisis will add to those difficulties. Nearly every dairy fanner I have spoken to in my area believes there will be a shortage of milk in this country within a year or two. It will come much sooner than most people expect.

There is a great shortage of agricultural labour. I know of a man who is today selling his dairy herd at very short notice because he is unable to run his farm. In my area the farmers are not feeding cattle as they normally would because of the high price of feeding stuffs. The cattle are being kept in store condition and not in prime condition as would otherwise be the case. They will not come on to the market in the spring. Many more breeding sows and cows have been sent for slaughter in the last three or four months than at any other time in recent years. This is because of the uncertainty which faces particularly the smaller farmer over interest rates. They do not know what the future holds so they cut their losses and keep the minimum of stock. The Government should consider what effect this will have for a country such as Britain which depends on imports for 50 per cent. of its food. The energy crisis means that we shall pay still higher prices for the food we import.

I forecast now that food prices will rise in the next five or six months much more than in the last two or three years. The Government were warned about this development months ago yet they remain completely sanguine in the face of it. They have completely underestimated the seriousness of the situation. I have never supported the CAP and if that policy is to be followed it will be better to pay subsidies to those who cannot afford to buy the food. We cannot have a sustained policy of subsidy for both producer and consumer and the best solution is to subsidise the consumer. That means ensuring that pensions, family allowances and so on must be geared to the new price rises.

I do not see why, as a temporary measure and in view of the unprecedented rises which face us, we should not introduce temporary subsidies of feeding stuffs to enable the supply of milk to be maintained. There should be subsidies, too, for various other commodities, and if the Government ignore the need for these measures they are heading for considerable trouble. The situation will get worse for another reason. I agree with the right hon. Member for Battersea, North who said that one element in rising world food prices for which we are accountable is the money with which we buy the food—and that means the value of the pound. We have been compelled to export 20 per cent. more goods in order to buy the same amount of agricultural produce as a year ago. That is a serious situation which, with an energy crisis, will get much worse.

It gives me no pleasure to say it but I believe the country to be facing one of the most difficult periods in its history. In the debate today we have underplayed the problem that will face us over food. We are facing a situation of food shortage and we should be taking drastic steps now to deal with it. There is no sign of the Government being even remotely aware of the nature of that problem.

5.54 p.m.

Mr. Tim Fortescue (Liverpool, Garston)

I, too, congratulate the hon. Member for Swindon (Mr. David Stoddart) on his good fortune in winning the ballot and on the way in which he presented his case. He sang a familiar tune but he sang it nicely and the whole House listened to him with pleasure. He quickly glossed over the part in his motion dealing the pensioners and others suffering from high food prices. Some of my hon. Friends have pointed out how much the Government have done for pensioners and those on low incomes. The over-80s, whose increased pension the Labour Government rejected five times, were not mentioned by the hon. Member. The invalidity pension has been introduced by the present Government who have also increased the benefits for younger widows and have increased the advantages for those in disadvantaged positions.

Although the hon. Gentleman says that food prices have increased, the people who suffer most from such increases have been helped more by this Government than by the last Labour Government. Further, between April and August of this year the Price Commission, which is the creation of the present Government, saved the British food consumers £42 million by refusing to grant applications for increases in food prices. That is direct action by the Government related to the price of food. That is action which was never taken by the last Labour Government.

One factor always puzzles me when I hear Opposition hon. Members speaking about prices, and especially food prices. It is genuine puzzlement. If any Labour hon. Member can explain to me that I am wrong to be puzzled, I shall be delighted. Labour hon. Members take pride—and I support their pride—in agitating and working hard to ensure that workers overseas, and mostly in ex-colonial countries, have their way of life improved. They work hard, they agitate, they demonstrate and they march to support the case for workers in tropical countries to have a better standard of living. They are proud of doing so and I honour them for it.

However, when workers overseas get a higher standard of living, which means that they want more to eat and that they can afford to eat more meat, more protein and more of all the desirable foodstuffs, Labour hon. Members seem to be astonished that world prices for foodstuffs go up.

Miss Betty Boothroyd (West Bromwich)

Does the hon. Gentleman realise that the primary producers in the banana industry in the Caribbean receive only l½p per pound for fertiliser, machinery, land and labour whilst the British housewife is paying 10p a pound for bananas so that approximately 8½p remains with the shipper? The primary producer in the Windward Islands receives only l½p for the elements I have mentioned.

Mr. Fortescue

I am grateful for that statistic. I am sure that it is right. I was not aware of it. It does not in any way invalidate my point.

Miss Boothroyd

They are not receiving it.

Mr. Fortescue

The wages and standard of living of the primary producers should be improved. I agree entirely. Their wages should go up. They should receive the benefit of increased prices. That does not alter the fact that when their wages go up—I am not talking only about banana producers—and when wages increase throughout the world it is inevitable that not only the demand for primary foodstuffs will increase but also the price. Therefore, the prices of foodstuffs in this country will go up. Part of the reason for the increase in world prices is the campaign in which the Opposition have been indulging. They do not seem to understand simple cause and effect.

Mr. Mark Hughes (Durham)

I accept the inevitability of what the hon. Gentleman is saying. Will he give one example of a tropical food producing country which has produced a major increase in demand for temperate zone foodstuffs?

Mr. Fortescue

The hon. Gentleman is trying to beg the question. Let me assure him that I am not criticising his colleagues—indeed, in this respect I honour and respect them—for what they are seeking to do in many ex-colonial countries. I used to be in the Colonial Service. I worked in that service for a long time in a food and agricultural organisation. That has been my life.

It is inevitable, because the world food supply is not increasing as fast as the world's population, that increased demand from people who are under-fed will lead to an increase in world prices. That must be so, but the Opposition will never recognise that fact.

Mr. Hughes

I accept that.

Mr. Fortescue

I cannot understand how the Opposition can indifferently and enthusiastically support every wage claim which is made. If a claim is for £10 extra they support it. If the claim is for £15 extra they still support it. The same would apply if the claim was for an extra £20. Whatever the unions claim, they support it. It seems that the Opposition have no judgment. They make no discrimination between large claims and small claims. If a claim is made they automatically support it.

At the same time they seem to fail to realise that if the cost of moving things by train goes up because the engine drivers' pay has gone up, the cost of food will go up. Of course it will. That cannot be avoided if we indiscriminately support every wage claim. If support is given to every wage claim, support is given to increasing the cost of living.

It would behove the Opposition, and especially the hon. Member for Swindon, who moved the motion, to take those matters into account when criticising the Government for the increase in the cost of food. By their actions during the 3½ years of this Parliament they have contributed as much as the Government have to increases in the price of food.

I take up what the hon. Member for Swindon said about the increases which have taken place in the cost of living. The hon. Gentleman took the period since the General Election. That is a fair political point to make, but I suggest that it would be fairer and more realistic to take the increase of the last year. A year ago we were not in the Common Market and prices had not begun to rise as fast as they have risen recently.

Yesterday the Observer published its Shopping Basket. It does so regularly. It takes the price of 34 different items of food. It has followed the prices of those items regularly for several years. Yesterday it indicated the increase between November 1972 and December 1973. The 34 articles in November 1972 cost as a total £9.85. They now cost £12.11. The Observer says—I have not checked the figures—that that is an increase of 23 per cent. I agree that that is staggering and alarming. The interesting thing is that if we analyse the statistics—I am sure that everyone will agree that statistics must be considered closely and that immediate conclusions should not be drawn from them—and if we eliminate six items from the 34, we find that the increase during the past year has been only 67p instead of £2.26. On that basis the percentage increase is 7 per cent. instead of 23 per cent.

The items which I have arbitrarily eliminated for the purpose of my argument are beef, lamb, bacon, chicken, eggs and tinned salmon, which is obviously an imported foodstuff.

Mr. David Stoddart

They are all proteins.

Mr. Fortescue

It is a fact that the other 28 items in the Shopping Basket have either gone down in price or have remained comparatively stable. The fact that the total increase in a year for 28 items has been only 67p is completely ignored by all the commentators on the food situation. It is only when we analyse the figures that we realise how many items of food have gone down in price during the past year. There has not been a progression of price rises as indicated by the hon. Member for Swindon.

Another factor which emerges clearly from the statistics is that the retail price of all foods has gone up by 47 per cent. Since the General Election the price of manufactured food has gone up by only 29 per cent. During the last year the price of food has gone up by 17 per cent. and the price of manufactured food has gone up by only 6.9 per cent.

Therefore, it becomes more obvious, as one examines the situation, that price increases, both since the General Election and in the last year, have been almost entirely concentrated on fresh food and that food processed or manufactured in this country has increased in price very little. This factor must be recognised; it deserves the congratulations of the House to those who manufacture and process foods, who have contributed a great deal to the efforts to keep down prices. It is something we should not forget.

In the Government's counter-inflation policy, of which I am not an unreserved admirer, although I believe that some kind of policy was necessary, there is a weakness. I am informed—this is an example of the weakness and not the whole story—that those farmers in this country who grow peas, and whose peas will be harvested next year in the autumn, have signed contracts for next year's harvest with those who buy the peas for freezing or tinning providing for an increase of 40 per cent. above their price for this year.

I am told that the farmers are asking 40 per cent. more because, they say, the world price of cereals is high and they could easily grow cereals on their land and get the higher price. They say, therefore, that if these manufacturers or processors want them to grow peas, they will have to pay an extra 40 per cent., and if they do not pay it they will not get the peas.

Mr. Mark Hughes

Has the hon. Gentleman noticed that it was reported in the Farmers' Weekly last week that the current sale price is £42 a ton but that stuff not good enough for human consumption was sold at £67 a ton? Thus, some farmers got 67 per cent. more for their peas. As the Farmers' Weekly said: What a mad, mad world this is

Mr. Fortescue

I will not go as far as that, but I was not particularly emphasising that it was a very sane world when, in one year, the price of peas could increase in the contract by 40 per cent. The man who has to buy at a price 40 per cent. above this year's price has his margin strictly controlled under the Price Commission's rules. He cannot increase his prices by any more than a very limited amount, in which all sorts of his costs may not be included. Then he passes his frozen peas or tinned peas to the distributor, and the distributor's margin is calculated in percentage terms. He is all right because he can charge the same percentage on the increased prices and so increase his margin automatically.

Therefore, the manufacturer and processor are squeezed between the farmer, who can charge what he likes in the contract, and the distributor, who is allowed to charge more on a percentage basis. The manufacturer and the processor are caught in the middle in the terms of the price code. I ask my hon. Friend to look at this. It is an unfair anomoly. The farmers are being treated far too easily under the prices policy, and the distributors are being allowed to get away with very larger profit margins, while the manufacturers and processors are being squeezed.

I want to turn now to the question of food prices in the EEC. We have heard of the horrors which go on in Europe and of the increase in prices we have to suffer because of them. We have heard again the anti-Common Market sentiments of the right hon. Member for Battersea, North (Mr. Jay), which we have heard many times before. We hear him with respect because we respect him, but we do not now take his sentiments so seriously.

In dairy products, the price of butter in the shops is now 20 per cent. less than it was in January last year, when we were not members of the EEC. Practically every other dairy product is approximately the same price in the shops today as in January 1972. In the meantime, we have joined the EEC and have been cut off, as we have heard, so dramatically from the southern hemisphere. Yet prices have stayed level for most dairy products and have actually gone down for butter by 20 per cent. How, therefore, can the right hon. Gentleman say that British membership of the EEC has been so disastrous for the housewife? He mentioned all the prices which have gone up because he opposes the Common Market, but he did not mention the prices which have gone down.

The right hon. Gentleman and others have mentioned that in the last year the £ sterling has been devalued and that when the £ sterling is devalued the price of imported goods goes up. That is the natural consequence of devaluation. Yet the price of imported butter has gone down and the price of imported cheese has stayed about the same. The reason is that the monetary compensation mechanism operated by the Common Market countries in Brussels by the Commission has compensated us for the loss in the value of sterling, so that there has been no increase in the price of most dairy products, and butter has actually gone down in price. If any anti-Marketeer wants to attack me on these figures, he is welcome to do so, but these are the facts and they are not emphasised often enough. Prices have gone down for some commodities because of our entry into Europe.

I turn now to the question of revision of the common agricultural policy. The Government's view of this seems to be like the view of the parson who is against sin. They think that the policy should be revised, but they are very chary of telling anyone at all, let alone the House, how they think it should be done. They think, and no-one disagrees, that the cost of the policy should be reduced. We all agree. No-one could quarrel with that view. They say that the effects of revision of the policy should be for the price of bulk commodities to be reduced. We, too, would like to see that. They say, finally, that they think the policy should be revised so that exceptionally large surpluses, such as we have seen for butter, should be eliminated. So do we all think.

What the Government have not told anyone yet is how in their opinion these desirable effects should be brought about. I believe, as has been said already, that hon. Members on both sides of the House, however fanatically pro-Europe they are—I count myself amongst that number—wish to see steps taken at an early date towards revision of the common agricultural policy. They want to see the British delegates banging the table in Brussels in order to get the policy revised. They want to see, sooner rather than later, detailed proposals from the Government as to how it could be done.

6.8. p.m.

Mrs. Doris Fisher (Birmingham, Ladywood)

The hon. Member for Birmingham, Perry Barr (Mr. Kinsey) accused my hon. Friend the Member for Swindon (Mr. David Stoddart) of putting down a frivolous motion. Going round my constituency, I do not find any frivolity amongst the women I have met while they have been doing the shopping. Some hon. Members opposite seem to think that the Opposition are seeing a kind of mirage of prices, but, as my hon. Friend the Member for Swindon said, the housewives were blamed by the Government originally and told to shop around. They did so but that did not solve the problem.

Then we had the accusation that housewives were buying convenience foods. I was not able to find what a convenience food was. Eventually I learned that such a food was ice cream or crisps, which the Government relieved of tax.

Then the trade unions were blamed because they asked for higher wages for their members. Workers' wages have been frozen and yet prices are still increasing. The Chancellor of the Exchequer said that he would solve the problem by dealing wtih selective employment tax and purchase tax. But prices continued to rise and still the Government were looking round for excuses. Then the Prime Minister came up with the best excuse of the lot—the weather. The British are absolute wizards at blaming the weather for certain eventualities. It seems that it is either the weather or computers which are to blame for everything.

At the beginning of this year's summer we had rain practically every day and the President of the National Farmers' Union appeared on television forecasting gloom about higher grain prices because of the wet weather. Then the sun came out and we did not see him any more. He did not say, "Now that the sun is out we shall get higher grain production." He supported the Government only when the weather was bad. The latest excuse is world prices. We must accept that world prices are to blame for some increased costs, but I am wondering what excuse the Government will give after Christmas for their failure to keep down the high cost of living.

The figures show that 1973 has been a bumper year for farmers. The Minister said in answer to a Question which I tabled, Yields from the 1973 harvest are expected to be excellent …".—[OFFICIAL REPORT, 22nd October 1973; Vol. 861, c. 406.] He said that the estimated yields showed a substantial increase, not only in England, but in Scotland and Northern Ireland. On the following day he gave the yields which he expected from the potato crop. He said: The crop seems to be in good condition. … the indications are that the yield from the 1973 crop will probably show an increase of more than ½ ton per acre over that of 1972."—[OFFICIAL REPORT, 23rd October 1973; Vol. 861, c. 474.] British agriculture is one of the most efficient agriculture industries in the world, and the farmers and farm workers have accomplished this bumper harvest together. The indications are that there will be a large increase in farmers' incomes this year. I should have liked this prosperity to be shared. I should have liked the Government to show a little more sympathy for the farm workers' claim for a £25 a week basic wage. As hon. Members opposite have said, the farmers are doing very well out of the present food situation. Let us have a little more sympathy for the farm workers, for they are subsidising the farm industry.

An advertisement which used to appear on the media and on placards said, "Go to work on an egg". That was in the good old days of the Labour Government and before Leicester. The Prime Minister said at Leicester that under the Labour Government workers were forced to eat a smaller, cheaper egg. Now the workers are trying to find that cheaper egg. In Birmingham last weekend eggs were being sold at 50p a dozen. Their price has increased by 115 per cent. this year. I wonder whether the Ministry goes into the reasons for such substantial increases or merely takes the percentage increase in some other commodity and accepts it. It should conduct much more research into the reasons for substantial price increases.

The price of eggs used to fluctuate. There was a summer price and a winter price. I do not know whether the chickens have changed with the seasons or whether, because we have battery chickens, it is summer or winter all the time for them and therefore we have summer or winter prices all the time, but there seems to be no seasonal drop in the price of eggs as there used to be. Eggs are one of the main protein foods.

There has been a substantial increase in the price of bacon. In Birmingham last weekend gammon ham was being sold at 75p a pound. Bacon and eggs, which used to be a cheap source of protein for people on average incomes, have become luxury items. Bacon and eggs is no longer a breakfast; it is a main meal.

The hon. Member for Garston (Mr. Fortescue) quoted from the Observer, but he did not refer to the substantial increase in the price of fish fingers, which is one of the products of the frozen food industry. The price of the articles in the list which he gave, which were not by any stretch of the imagination luxury articles, has risen by £2.26 in one year. Can we wonder that the workers are concerned about their decreasing standard of living? They are expected to bear the brunt of restraint in the freeze while others seem to be immune.

Rank-Hovis-McDougall, Britain's biggest baker, made a record profit in the year ended September. All the food manufacturers are making not just profits but record profits. In the year to September Rank - Hovis - McDougall, which makes Mother's Pride, made a record profit of over £27 million—an increase of more than £4 million on the previous year. FMC, the meat marketing group, increased its profit by 50 per cent. Its profit was more than £3 million larger than the profit it made the previous year. The workers cannot make anywhere near these profits. Yet they are expected to bear the brunt, while these companies get away with it.

Mr. Fortescue

Will the hon. Lady say how much of the Rank-Hovis-McDougall profit was due to operations in this country and how much was due to overseas operations? The profits which she has quoted are up to September this year. Does she agree that the figures for the year to come and the year after that, when they have been subjected to the operations of the Price Commission, will tell a very different story?

Mrs. Fisher

We can all tell different stories to suit different pictures. These are figures for this year. It does not make any difference whether the profits are made in this country or elsewhere. The profits made by Rank-Hovis-McDougall were made in this country. The hon. Member for Liverpool, Garston shakes his head but I have a quotation here supporting my view. We say that the Government have failed to keep a strict control of essential foods. They have actively encouraged people to make a quick buck. We have seen property and land developers all making maximum profits. Cost of land obviously has a direct effect on the cost of food.

When the Government appointed the Price Commission we knew that it was a political gimmick. People were told to telephone in their complaints to the commission if they had problems. Obviously, the commission got too publicity-conscious. The Government decided, after the Tory Party conference—when the Tory housewives probably told them that the Price Commission was not good politically—that the commission would not publish the increases.

The housewife does not need to have price increases brought to her attention by the commission because when she shops at her supermarket she knows the prices—they are stamped on every packet and tin. She is reminded of the prices when she puts the articles into her pantry or refrigerator and when she takes them out.

People do regard the Price Commission as a gimmick. I received a letter last week from a constituent complaining about the price of Findus plaice portions which have gone up from 21p. She buys them regularly and she wrote to the Price Commission which said it was looking into the matter. After 10 weeks my constituent reminded the Commission that she had not had a reply. The commission said that it was difficult to contact London. If that is the way that the commission works—and how a housewife can do nothing about her complaint—then it is a political gimmick.

I do not wish to deal at any length with the Common Market. Some of my hon. Friends are much more capable than I to do that. But Common Market policy means that the consumer can never win. The system encourages food gluts which are bought up by intervention boards to create artificial shortages and to keep prices up. The common agricultural policy was never a policy to protect the consumer, and we have the ridiculous situation of paying more in import levies and taxes to the CAP. That keeps food dearer than we paid under the deficiency payments which were aimed at keeping food cheap.

Mr. Speaker

Order. Will the hon. Lady forgive me? It is hoped that Front Bench speakers from her side of the House will catch my eye at twenty five minutes past the hour and that gives her another two minutes.

Mrs. Fisher

Thank you, Mr. Speaker. I shall be exactly two minutes. The Opposition feel that this has not been a frivolous debate or that it was a frivolous motion. I sincerely believe that in 1970 the housewife was conned. She was cheated by the Prime Minister. But because the Prime Minister has not acquired marital status and does not have any personal knowledge of how a female reacts when she is spurned, the sooner she has an opportunity to show the Prime Minister at the next General Election that reaction the sooner will he realise that the housewife is aware that she has been cheated and that she will use her vote to make sure that that anger is on the record.

6.25 p.m.

Mr. David Clark (Colne Valley)

My hon. Friend the Member for Birmingham, Ladywood (Mrs. Doris Fisher) is one of the ladies who were not conned in 1970. Her judgment is as good today as it was then. I am delighted to speak immediately after her.

The whole country feels that the Government have shown—I do not wish to be unkind—a lack of understanding and unwillingness to take any positive steps on the food issue. From talking to constituents and people throughout the country the Opposition get the feeling that the food question is the most serious problem. Despite their efforts, the general feeling is that the Government have failed to grasp the nettle. I hope that today the Minister will give us some encouragement. That is the spirit in which we approach the debate.

The House and the country are indebted to my hon. Friend the Member for Swindon (Mr. David Stoddart) for his choice of topic. It is a subject worthy of a debate longer than the three hours at our disposal, but we must be thankful for small mercies. My hon. Friend's speech was full of cogent arguments. It was an accurate assessment of the situation, with positive suggestions which set the tone of the debate on a matter on which the vast majority of people would disagree with the hon. Member for Birmingham, Perry Barr (Mr. Kinsey) who claimed that the Government's food policy was a success. We respect and listen to minorities, but I disagree with the hon. Gentleman, as do the vast majority of people.

We want to try to help the Government by making positive suggestions. I start with a minor point about packaging. In studying the horticulture industry recently I noticed a suggestion that much of this year's excellent apple crop would not reach the market, due to a packaging shortage. I have raised the problem with the Minister before and should like him again to study its wider implications. Retailers tell me that they are not able to get packaging and paper bags, and that when they can they cost twice as much as last year. According to a figure I have, the fruit people last year estimated that half a penny on a pound weight was the cost of parcelling. If the price is now doubling it means an addition of 1p per pound weight on prices, due to packaging. That may not appear much, but to old people concerned with every copper it is a vital matter. The Government would do well to examine it.

Many of my hon. Friends and hon. Members opposite have referred to world prices. Everyone has agreed about the increases, and that the situation has made it difficult for the Government. What we find difficult to forgive the Government for is that in 1970, when they were talking in the election campaign, they did not refer to world prices. It is not good enough to take that line. We find it particularly difficult to accept that as an excuse while the Government seem to be intent on washing their hands of responsibility. They say, "We cannot do anything about world prices," but we know that the Government have been responsible for devaluing our currency by approximately 20 per cent. over the past two years, which, for a country which imports 50 per cent. of its food products, is a most serious matter. It means 20p on every pound we spend on food, and that is a direct result of the Government's economic policies, which are disastrous.

I call it devaluation by stealth. It has not been followed up by the necessary political and economic decisions and it has made the problems of controlling prices much more difficult. We hear a lot about world prices, but these do not apply when we consider such things as Iamb. Why should the price of lamb have gone up as much as it has? My right hon. Friend the Member for Batter-sea, North (Mr. Jay) spoke of New Zealand lamb, fattened, fed and grazed for 10 months of the year. That is not affected by world prices. The same is true of cheese. I understand that there is a tax of over £350 per ton upon all cheese entering this country. That has nothing to do with world prices; It is the result of the Government's policy.

We are eating less beef, bacon, cheese and almost every high-protein product than we did three years ago. The Government must examine the reasons for this and find out where so much of our food is going. I have discovered that there are 34,000 tons of beef in store compared with 15,000 at the same time last year. Why?

Many hon. Members have spoken about the effects of the Common Market. Apart from some Government supporters, no one now accepts as correct the Government's estimate of the increase in prices as a result of our entry into the Common Market. The claim that it is lp in the pound is beyond belief. Even George Thomson, the EEC Commissioner, speaking earlier this year—I do not know whether it was a slip—said that it was ½p in 10p, which is 5 per cent. I would have thought that to be rather on the low side, but it is perhaps more honest than the Government's figure. Food prices will get worse. As the years go by, until 1977 and 1978, we will find duties increasing.

We eat a great deal of tinned food. From 1st January there will be an increased import tax on tinned food. My hon. Friend the Member for Acton (Mr. Spearing) has done a great deal of work on this subject and has discovered that as from 1st January the tax will put an extra £1½ million upon tinned fruit, an extra £1½ million on corned beef and an extra £1 million on tinned salmon. All this means that the poor housewife will be paying extra when she goes shopping.

We want to put forward some positive suggestions. How the Government must have regretted axing the Prices and Incomes Board in their post-election euphoria. They had to put something in its place. They put up the Price Commission, which is unsatisfactory in that we are not able to debate it in detail. As my hon. Friend the Member for Birmingham, Ladywood has said, the Commission is a laughing-stock among housewives. We have all received letters from constituents saying that they have been unable to get satisfaction from it.

There is the feeling that the Government have misled the people, especially when they said that the commission would be able to consider fresh foods. There is a great deal of difference between considering fresh foods and taking positive action about their prices. This is one of the basic weaknesses of the commission. I hope the Minister can reassure us that she is prepared to make price control more effective. This is the key to the problem.

We warned the Government three years ago that the terms for entry to the EEC were unsatisfactory and unacceptable to the people. The Council of Ministers should not just tinker around with the common agricultural policy. We want a fundamental reform. Only in that way can the people of Britain get anything like a fair deal from Europe. Only then will there be any hope of getting reasonable food prices.

The livestock farmers have had a raw deal in the past few months. The increase in feeding stuffs has been about 70 per cent. The longer-term effect on British agriculture is much more serious. What is serious for the agriculture industry will, in turn, be serious for the consumer. We welcome the fact that the Government have brought the Price Review forward, but that is not enough. Their refusal to help dairy and livestock farmers generally will inevitably lead to higher prices. Even at this stage the Government should give far more to these farmers, who are the real victims of world food prices.

I turn now to subsidies. The Government have said that they are not against them. The Prime Minister told us this when singing the praises of the Milk Marketing Board. There is, therefore, no dogma problem. I realise that the Government will have to do a "U" turn. They have, however, removed subsidies from bacon and sugar and if they do a "U" turn on this I can promise them that they will not find us breathing down their necks.

We shall support the Government if they are prepared to introduce subsidies on the basic foodstuffs, of which there are about 11. These items weigh heavily in the budgets of those on lower incomes and pensioners. They account for about 36 per cent. of all household food expenditure. If we include tinned foods the figure rises to about 40 per cent. This represents an expenditure of about £8,000 million per annum. If we wanted a reduction of 10 per cent. on those items it would cost the country approximately £350 million. That is a price worth paying. Hon. Gentlemen may ask where the money will come from. By coincidence, this figure is almost the same as the relief given to surtax payers, about which this Government boasted a short time ago. Let us try to help the ordinary person and not just the surtax payers.

I must ask the Government to examine the commodity market in London. I read the Adjournment debate on this with great interest. I do not think that this market has been thoroughly investigated. Even the governing body might welcome some discussions.

It seems that the Government were elected on a false prospectus. "Cheaper food for the housewife" was the cry, but what do the statistics show? The Observer speaks of an annual increase in prices of 23 per cent., while The Guardian says that the price of the goods in its basic shopping basket has increased by 25 per cent. in 12 months. The Hudders-field Daily Examiner last Friday reported This is the blackest year by far in the six year history of the Examiner's food price service—the biggest quarterly increase of 6.6 per cent., running at an annual increase of 26.4 per cent. So we are in a fairly narrow band of annual increase. On the Government's own figures—they are October figures, and out of date—there has been an increase of 44.8 per cent. since 1970, which represents an annual increase of nearly 19 per cent. On the Government's figures, food prices are doubling every five years, but according to all the newspapers the prices of basic foodstuffs are doubling every four years.

I end, as did my hon. Friend the Member for Swindon, with the comment that it is not the credibility or the safety of the Government that we are worried about. With food prices possibly doubling every four years, we are worried about our democracy.

6.41 p.m.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner)

I am grateful to the hon. Member for Swindon (Mr. David Stoddart) for having initiated this debate, even though I cannot congratulate him on the terms of his motion. We have had in this House many exchanges about food prices, and mini-debates at almost every Question Time, but this is the first occasion for some time on which we have been able to devote a larger debate to this subject. It is right that we should do so. Food prices are a matter which touch us all. I, as a housewife and a Minister, am doubly aware that this is the case, and I am, therefore, particularly glad to have the opportunity to reply to the various points which have been made this afternoon. If in the limited time I am unable to answer all the questions that have been raised I will write to hon. Members.

As the debate has shown, rising food prices concern hon. Members on both sides of the House. This is not something of which Opposition Members have a monopoly. It is sad that, as the motion shows only too well, they still fail to understand the realities of the situation.

The fact is that the world is facing an explosion of food commodity prices on a scale and to an extent unparalleled since the Korean war. We have seen two enormous countries which are normally able to satisfy their own cereal needs unexpectedly take off the market more than half the world's exportable surplus of wheat. We have seen countries which were formerly among our major suppliers of beef severely restrict their exports to meet their own growing demand—and we have spoken about rising living standards of producer countries and new buyers entering this world market in strength for the first time and increasing competition for the reduced supplies. We have seen crop failures for a number of tropical commodities such as dried fruit and cocoa, of which this country is among the world's largest single buyers. I have stood at the Box and said this often enough. We have seen changes in ocean currents decimate world fishmeal supplies, and the world's largest single exporter of another major source of protein—soya beans—ban all exports for a period earlier this year. We have seen increased competition for the world's dwindling fish stocks result in considerably reduced landings.

This combination of natural disasters has struck in the short space of 18 months, at a time when there has been an unprecedented degree of movement in world exchange rates, often working against the £ sterling. The world food markets cannot survive shocks of this nature without showing signs of severe strain. These have inevitably been reflected in rising prices. In the last year world food commodity prices have risen by no less than 50 per cent. That is more than the rise over the whole of the previous 14 years. Hon. Gentlemen opposite when they were in Government had no experience of world inflationary pressures of this order, for while world food commodity prices have risen by no less than 77 per cent. in the three and a half years since we took office they went up by only 6 per cent. throughout the whole six years of the previous Labour Government.

There is no question of the Government having allowed food prices to increase. We in this country have to import half our food requirements, and we are, therefore, particularly vulnerable to external inflationary pressures. We have to pay the going rate on world markets or go without. Our experience over the last 18 months is by no means unique. Every major industrialised country in the world has suffered rising food prices of an order similar to our own. The most recent annual figures show that food prices in the United States have risen by 19 per cent., in Japan by 13 per cent. and in the nine countries of the European Economic Community by about 11 per cent. Those are the most recent annual figures. The adverse world food supply situation has hit rich and poor countries alike, States both large and small, and countries inside and outside the EEC equally. It is not a phenomenon peculiar to this country or to the Community, as some Opposition Members would like to think.

Mr. Jay


Mrs. Fenner

I am coming on to Community points. Perhaps the right hon. Gentleman will allow me the limited time I have.

As I expected, a number of hon. Members have again tried to suggest that the common agricultural policy of the EEC is to blame for the sharp rise in our food prices. I will explain once more why this view is wholly mistaken. Because we were able to negotiate a gradual transition to EEC farm prices over five years there was no large increase to be faced immediately we joined. The first formal step for each of the main commodities has now been taken but, for most products, this has had no effect on United Kingdom prices. This is simply because the Community prices for the majority of foods, including such important items as cereals and beef, have been below world prices. We have, therefore, continued to pay the going market rate, just as we would have done had we remained outside the Community.

For only a few foods has this first transitional step meant a change in our prices. In the dairy products sector it has meant some increases in the price of skimmed milk powder, and some cheeses have also been affected, but the only other significant items for which prices have risen as a result of the changes to bring our market arrangements into line with those of the EEC are sugar, pig-meat products and corned beef.

But—and this is an important fact which many hon. Members choose to overlook—there have been benefits, too. My hon. Friend referred to butter, and we are able to buy certain grains from other member States more cheaply than we could have done as a non-member. The system of monetary compensation referred to by my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) has moderated some of the effects of the floating of sterling, particularly for bacon and dairy products. The overall effect on food prices so far of our membership of the EEC is estimated at less than 1 per cent.

I want to deal with the point raised by the right hon. Member for Battersea, North (Mr. Jay) about Commissioner George Thomson's statement. Mr. Thomson has been reported as saying that out of every 10p increase in food prices ½p was due to EEC entry. At the time Mr. Thomson made his statement the increase in the food index, since January 1973, was 10 per cent., and 5 per cent. of that increase is ½ per cent. on the food index. That is completely consistent with the Government's estimate that the effect is less than 1 per cent. this year.

In the longer term we have always made abundantly clear that membership will mean a gradual rise in some food prices, but the extent of the increase should not be exaggerated. The Government's assessment is and remains that the increase in retail food prices resulting from our adoption of EEC marketing and support arrangements will be about 2 per cent. a year over a period of about six years. This is equivalent to only about ½p in the £ each year on the cost of living as a whole.

The hon. Gentleman's motion suggests that many food items have been taxed through the imposition of tariffs…. I know that Opposition Members are concerned about the effect of Community tariffs on the price of food here, but we really must face the facts. No tariffs on food items have yet been imposed or increased under the common external tariff as a result of EEC entry. I must take this opportunity to put the effect on food prices into perspective. Only about half our total food, feed and drink imports are subject to tariffs, and duties are actually payable on a very much smaller proportion. For a substantial part even of this section of our food imports there will be no change in the tariff when we take the first move towards the common customs tariff on 1st January. Ireland, Denmark and the other EFTA countries will continue to have duty-free entry, as will those developing Commonwealth States which provide many of our needs for tropical foods, such as coffee, cocoa, spices, bananas and oilseeds. Our tariffs against the Six, which are sending us an increasing proportion of our food imports, will of course continue to decline.

Even where there is a move to the CCT, the changes will not always be upwards. For a number of imported foods such as oilseeds and oilcakes and dried fruit the movement will be downwards. In other cases—the right hon. Member for Batter-sea, North referred to this point—such as tea, both tariffs are nil. In practice, therefore, the scope for price increases is limited to a few items like lamb and some canned fruits and fish, where the CCT is higher and where our supplies are obtained from developed countries.

Several Hon. Members


Mrs. Fenner

I cannot give way. I have only eight minutes left. This very limited price effect was fully taken into account in the Government's estimate to which I have already referred. It remains within 2 per cent. per year for six years. The part of this attributable to next January's move towards the CCT represents no more than between ¼ and ½ per cent. on the food index. That is only about one-tenth of 1 per cent. on the cost of living as a whole.

Mr. Jay

The hon. Lady mentioned tariffs, but does she deny that large import levies will be imposed on butter and cheese, and indeed that they are now in force, as a result of EEC entry?

Mrs. Fenner

As my hon. Friend the Member for Liverpool, Garston pointed out, the price of butter has gone down, so the right hon. Member for Battersea, North is on a weak wicket. I have already said that the price of some cheeses has increased, but this limited price increase has been fully taken into account in the 2 per cent. figure per year.

The hon. Gentleman's motion also calls for immediate and fundamental alterations in the common agricultural policy. He must know that the Commission has recently presented to the Council of Ministers a report which reviews the CAP, that a preliminary discussion on it is to be held, and that the subject is being discussed by the Council today.

My right hon. Friend the Minister of Agriculture has made the Government's position very clear on this question, both in the House and in discussions in the Council of Ministers. We have said that, in accordance with the obligations which we incurred when joining the Community, we accept the basic principles on which the policy is founded. Nevertheless, like most other member States, we recognise that the CAP has not been successful in fully achieving all the objectives the Community set for it. We should like to see the CAP developed for a number of reasons. We should like to reduce inflationary pressures; to improve the use of resources and get a better balance between supply and demand; to reduce the cost of support; and to ease international trading difficulties.

The Government are far from complacent about the speed and degree to which food prices have risen. We recognise all too clearly the difficulties that this situation presents for food manufacturers and retailers. This is why we have taken action, wherever possible, to mitigate their effects. I shall not repeat those matters since many of my hon. Friends have mentioned them in the debate today, but there are a number of ways in which we have sought to mitigate the effect of world food commodity prices.

Mr. Alfred Morris (Manchester, Wythenshawe)


Mrs. Fenner

I must get on.

The hon. Member for Swindon referred to the Price Commission. A strict approach to prices is being maintained in stage three, which for prices began last month. The Price Commission is responsible for the implementation of those controls, and I should like to pay tribute to what it has achieved. The Commission estimated that in its first five months alone, as a result of its scrutiny of applications under the price code, it has saved consumers £320 million. The Government have taken action specifically tailored to the needs of the particular circumstances.

This is a merit which is conspicuously lacking in the Opposition's proposals, although the hon. Member for Colne Valley (Mr. David Clark) suggested some subsidies. I repeat that Conservatives have no dogmatic ideology contained in a set constitution with various clauses. Indeed it is difficult to pin down what the Opposition propose because each time the Deputy Leader of the Opposition speaks on this subject the cost of the proposals seems to go up and the coverage shrinks.

He has, however, always failed to explain how his party would ensure that their proposed subsidies would be fully reflected in retail prices without comprehensive controls over food markets. Several of my hon. Friends have referred to the £1,600 million that would have been required to subsidise food prices at the same level as they were at this time last year. That figure is equivalent to 7p in the pound or 23 per cent. on the standard rate of income tax.

The world market situation must continue to be dependent on the overall balance of supply and demand. We have sought to ensure during our period of office an increase in agricultural production over the whole range of activity, although we appreciate the temporary difficulties of the specialised dairy farmer. This is why my right hon. Friend has brought forward the preliminary discussions in respect of the annual review. The Government will continue to maintain our strict controls over prices and charges and will be ready to take further action, wherever appropriate, to stabilise food prices.

The hon. and learned Member for Montgomery (Mr. Hooson) said that the Government were not taking a proper account of the future in terms of world food prices. I believe that our actions show that we recognise the true facts of the situation. Certainly the Opposition's motion does not recognise the true facts. Therefore, I accordingly ask the House to reject the motion.

Question put:

The House divided: Ayes 142, Noes 195.

Division No. 19.] AYES [6.58 p.m.
Abse, Leo Dalyell, Tarn Ginsburg, David (Dewsbury)
Allaun, Frank (Salford, E.) Davidson, Arthur Golding, John
Archer, Peter (Rowley Regis) Davis, Clinton (Hackney, C.) Hamilton, James (Bothwell)
Armstrong, Ernest Davis, Terry (Bromsgrove) Hamilton, William (File, W.)
Atkinson, Norman Deakins, Eric Hamling, William
Barnett, Joel (Heywood and Royton) Dell, Rt. Hn. Edmund Hardy, Peter
Benn, Rt. Hn. Anthony Wedgwood Doig, Peter Harper, Joseph
Bidwell, Sydney Dormand, J. D. Harrison, Walter (Wakefield)
Bishop, E. S. Douglas, Dick (Stirlingshire, E.) Hart, Rt. Hn. Judith
Blenkinsop, Arthur Douglas-Mann, Bruce Healey, Rt. Hn. Denis
Booth, Albert Driberg, Tom Heffer, Eric S.
Boothroyd, Miss Betty Duffy, A. E. P. Horam, John
Buchanan, Richard (G'gow, Sp'burn) Eadie, Alex Houghton, Rt. Hn. Douglas
Callaghan, Rt. Hn. James Edwards, Robert (Bilston) Howell, Denis (Small Heath)
Carter, Ray (Birmingh'm, Northfield) Ewing, Harry Huckfield, Leslie
Carter-Jones, Lewis (Eccles) Faulds, Andrew Hughes, Rt. Hn. Cledwyn (Anglesey)
Castle, Rt. Hn. Barbara Fernyhough, Rt. Hn. E. Hughes, Mark (Durham)
Clark, David (Colne Valley) Fisher, Mrs. Doris (B'ham, Ladywood) Hughes, Robert (Aberdeen, N.)
Cohen, Stanley Fletcher, Ted (Darlington) Hughes, Roy (Newport)
Concannon, J. D. Foot, Michael Hunter, Adam
Cronin, John Ford, Ben Jay, Rt. Hn. Douglas
Crosland, Rt. Hn. Anthony Gilbert, Dr. John Jenkins, Hugh (Putney)
Jenkins, Rt. Hn. Roy (Stechford) Morris, Alfred (Wythenshawe) Spearing, Nigel
Jones, Barry (Flint, E.) Morris, Charles R. (Openshaw) Stallard, A. W.
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.) Moyle, Roland Stoddart, David (Swindon)
Kaufman, Gerald Mulley, Rt. Hn. Frederick Stonehouse, Rt. Hn. John
Kerr, Russell Oram, Bert Strang, Gavin
Lamborn, Harry Orbach, Maurice Summerskill, Hn. Dr. Shirley
Latham, Arthur Orme, Stanley Thomas, Rt. Hn. George (Cardiff, W.)
Lestor, Miss Joan Oswald, Thomas Thomas, Jeffrey (Abertillery)
Lomas, Kenneth Owen, Dr. David (Plymouth, Sutton) Tuck, Raphael
Mabon, Dr. J. Dickson Pavitt, Laurie Varley, Eric G.
McBride, Neil Peart, Rt. Hn. Fred Wainwright, Edwin
McElhone, Frank Pendry, Tom Wallace, George
Mackenzie, Gregor Perry, Ernest G. Watkins, David
Mackie, John Prentice, Rt. Hn. Reg. Wells, William (Walsall, N.)
Mackintosh, John P. Prescott, John Whitehead, Phillip
McNamara, J. Kevin Radice, Giles Whitlock, William
Mallalieu, J. P. W. (Huddersfield, E.) Roberts, Rt. Hn. Goronwy (Caernarvon) Williams, Mrs. Shirley (Hitchin)
Marks, Kenneth Rodgers, William (Stockton-on-Tees) Williams, W. T. (Warrington)
Marshall, Dr. Edmund Roper, John Wilson, Alexander (Hamilton)
Mason, Rt. Hn. Roy Ross, Rt. Hn. William (Kilmarnock) Wilson, Rt. Hn. Harold (Huyton)
Meacher, Michael Sheldon, Robert (Ashton-under-Lyne) Wilson, William (Coventry, S.)
Mellish, Rt. Hn. Robert Shore, Rt. Hn. Peter (Stepney) Woof, Robert
Mendelson, John Short, Rt. Hn. Edward (N'c'tle-u-Tyne)
Mikardo, Ian Short, Mrs. Renée (W'hampton. N. E.) TELLERS FOR THE AYES:
Millan, Bruce Silkin, Rt. Hn. John (Deptford) Mr. James Wellbeloved and
Molloy, William Silverman, Julius Mr. Dennis Skinner
Morgan, Elystan (Cardiganshire)
Adley, Robert Fookes, Miss Janet Marten, Neil
Allason, James (Hamel Hempstead) Fortescue, Tim Maude, Angus
Archer, Jeffrey (Louth) Fowler, Norman Maudling, Rt. Hn. Reginald
Astor, John Fry, Peter Mawby, Ray
Atkins, Humphrey Gardner, Edward Maxwell-Hyslop. R. J.
Baker, Kenneth (St. Marylebone) Gibson-Watt, David Meyer, Sir Anthony
Balniel, Rt. Hn. Lord Goodhart, Philip Mills, Peter (Torrington)
Batsford, Brian Goodhew, Victor Miscampbell, Norman
Bell, Ronald Gower, Raymond Mitchell, Lt.-Col. C. (Aberdeenshire, W)
Bennett, Sir Frederic (Torquay) Grant, Anthony (Harrow, C.) Mitchell, David (Basingstoke)
Benyon, W. Gray, Hamish Moate, Roger
Berry, Hn. Anthony Green, Alan Monks, Mrs. Connie
Biffen, John Griffiths, Eldon (Bury St. Edmunds) Monro, Hector
Body, Richard Grylls, Michael Montgomery, Fergus
Boscawen, Hn. Robert Gummer, J. Selwyn More, Jasper
Bossom, Sir Clive Gurden, Harold Morgan, Geraint (Denbigh)
Bowden, Andrew Hall, Miss Joan (Keighley) Morgan-Giles, Rear-Adm.
Braine, Sir Bernard Hall, Sir John (Wycombe) Morrison, Charles
Bray, Ronald Hannam, John (Exeter) Mudd, David
Brocklebank-Fowler, Christopher Harrison, Brian (Maldon) Noble, Rt. Hn. Michael
Brown, Sir Edward (Bath) Harrison, Col. Sir Harwood (Eye) Onslow, Cranley
Bruce-Gardyne, J. Haselhurst, Alan Oppenheim, Mrs. Sally
Bryan, Sir Paul Havers, Sir Michael Owen, Idris (Stockport, N.)
Butler, Adam (Bosworth) Hawkins, Paul Page, Rt. Hn. Graham (Crosby)
Campbell, Rt. Hn. G.(Moray & Nairn) Hayhoe, Barney Page, John (Harrow, W.)
Carlisle, Mark Hicks, Robert Parkinson, Cecil
Channon, Paul Holland, Philip Peel, Sir John
Chapman, Sydney Hordern, Peter Percival, Ian
Churchill, W. S. Hornsby-Smith. Rt. Hn. Dame Patricia Price, David (Eastleigh)
Clarke, Kenneth (Rushcliffe) Irvine, Bryant Godman (Rye) Prior, Rt. Hn. J. M. L.
Cockeram, Eric Jessel, Toby Proudfoot, Wilfred
Coombs, Derek Jopling, Michael Raison, Timothy
Corfield, Rt. Hn. Sir Frederick Joseph, Rt. Hn. Sir Keith Rawlinson, Rt. Hn. Sir Peter
Cormack, Patrick Kilfedder, James Redmond, Robert
Critchley, Julian King, Evelyn (Dorset, S.) Reed, Laurance (Bolton, E.)
Crouch, David King, Tom (Bridgwater) Rees, Peter (Dover)
Crowder, F. P. Kinsey, J. R. Rees-Davies, W. R.
Davies, Rt. Hn. John (Knutsford) Knox, David Renton, Rt. Hn. Sir David
d'Avigdor-Goldsmid, Sir Henry Lamont, Norman Rhys Williams, Sir Brandon
d'Avigdor-Goldsmid. Mal.-Gen. Jack Lane, David Ridley, Hn. Nicholas
Digby, Simon Wingfield Langford-Holt, Sir John Roberts, Wyn (Conway)
Dixon, Piers Lloyd, Rt. Hn. Geoffrey (Sut'n C'Field) Rodgers, Sir John (Sevenoaks)
Dodds-Parker, Sir Douglas Lloyd, Ian (P'tsm'th, Langstone) Rossi, Hugh (Hornsey)
Drayson, Burnaby Longden, Sir Gilbert Rost, Peter
Dykes, Hugh Loveridge, John Russell, Sir Ronald
Eden, Rt. Hn. Sir John Luce, R. N. Sainsbury, Timothy
Edwards. Nicholas (Pembroke) McAdden, Sir Stephen Sandys, Rt. Hn. D.
Elliot, Capt. Walter (Carshalton) MacArthur, Ian Scott, Nicholas
Emery, Peter McCrindle, R. A. Shaw, Michael (Sc'b'gh & Whitby)
Eyre, Reginald McLaren, Martin Shelton, William (Clapham)
Fenner, Mrs. Peggy McMaster, Stanley Skeet, T. H. H.
Fidler, Michael Macmillan, Rt. Hn. Maurlce (Farnham) Smith, Dudley (W'wick & L'mington)
Finsberg, Geoffrey (Hampstead) McNair-Wilson, Michael Soref, Harold
Fisher, Nigel (Surbiton) McNair-Wilson, Patrick (New Forest) Spence, John
Fletcher Cooke, Charles Madel, David Sproat, lain
Stainton, Keith Tilney, Sir John Whitelaw, Rt. Hn. William
Stanbrook, Ivor Tugendhat, Christopher Wiggin, Jerry
Stewart-Smith, Geoffrey (Belper) Waddington, David Winterton, Nicholas
Stodart, Anthony (Edinburgh, W.) Walder, David (Clitheroe) Wolrige-Gordon, Patrick
Sutcliffe, John Walker, Rt. Hn. Peter (Worcester) Wood, Rt. Hn. Richard
Tapsell, Peter Walters, Dennis Woodhouse, Hn. Christopher
Taylor, Edward M.(G'gow. Cathcart) Ward, Dame Irene Younger, Hn. George
Taylor, Frank (Moss Side) Warren, Kenneth
Taylor, Robert (Croydon, N.W.) Weatherill, Bernard TELLERS FOR THE NOES:
Tebbit, Norman Wells, John (Maidstone) Mr. A. G. F. Hall-Davis and
Thomas, John Stradling (Monmouth) White, Roger (Gravesend) Mr. Marcus Fox.
Thompson Sir Richard (Croydon, S.)

Question accordingly negatived.