Food Prices (Hansard, 20 December 1973)

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

§ 11. Mr. Thomas Cox
asked the Minister of Agriculture, Fisheries and Food what has been the percentage increase in food prices since June 1970.

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

§ The Minister of Agriculture, Fisheries and Food (Mr. Joseph Godber)
Between 16th June 1970 and 13th November 1973, the latest date for which information is available, the food index rose by 46.2 per cent.

§ Mr. Skinner
Is the Minister aware that the latest increased figures are of an order of 50 per cent.? The reason why the right hon. Gentleman will not announce the percentage increase to the House today is that he is frightened to do so. He is waiting for the House to rise before the announcement is made. The right hon. Gentleman cannot blame this sort of price increase on the miners. He should tell his right hon. Friends that when we hear, this winter, about pensioners starving, we should have no more of this talk, as on the last occasion of the miners' industrial action, that pensioners are starving because of lack of heat. They are starving because they cannot buy enough food.

§ Mr. Godber
Seldom have I heard a greater distortion of the facts. Certainly the hon. Member for Bolsover (Mr. Skinner) would never frighten me away from this House, nor would any of his hon. Friends. I find that his analysis of the situation is not borne out 1581 by the papers today. I was rather interested in the quotation from today's Daily Mirror, which the hon. Member may have seen. It says: The survey … certainly does not give a picture of housewives struggling to make ends meet by buying cheaper foods. It shows that earnings have gone up again substantially more than retail prices in this period.

§ Mrs. Sally Oppenheim
Is my right hon. Friend familiar with the blatantly misleading and factually incorrect leaflet which has been distributed by the Greater London Co-operative Society? Will he refute, in particular, three of the incorrect statements in that leaflet? The first is that food prices have risen due to profits made by manufacturers; the second, that the Government have imposed taxes on food; and the third, that the Government have withdrawn subsidies. Is my right hon. Friend aware that a widespread survey carried out by Which? shows that the Co-op was neither cheaper nor offered better value in quality than any other store?

§ Mr. Godber
I have seen the leaflet to which my hon. Friends refers. It is true that it is a completely inaccurate document in all the respects to which she refers. It is an utter distortion of the truth, and I am glad to have this opportunity of saying so.

§ Mr. Cox
Is not the Minister aware that even the figures he has announced today will pale into insignificance as the new figures are announced in the coming months as a result of Government policy? Is he further aware that while he and his colleagues prance around this country blaming everyone for our problems rather than admit their own incompetence prices go up? Will he tell the House when, at long last, the Government will take action against prices, either by giving teeth to the Price Commission or by introducing subsidies on key foods?

§ Mr. Godber
Again, this is completely inaccurate, and the hon. Member knows it. The facts are, as I have stated in the House many times, that the rises are due to world conditions, which cannot be denied. Those are the facts which I have given many times. I have said again and again that world food prices have risen. In the last three and half years since this Government took office, world food 1582 prices have risen by 77 per cent. During the six years that the Labour Party were in office world food prices rose by 6 per cent., but the price of food rose a great deal more than that.

§ Mr. Ralph Howell
Is my right hon. Friend aware that the country as a whole is spending only 19 per cent. of its income on food? Is he further aware that this is the lowest figure we have ever spent, and lower than in any other country in Europe?

§ Mr. Godber
It is true that the percentage of income which the average earner and the pensioner as well spends on food as a proportion of income has been going down steadily the whole time and that it is now at a lower figure than at any time previously. This means that the purchasing power, in terms of food, is substantially better, even in the present situation, than it was when the Labour Government left office.

§ Mr. Carter
In spite of what has been said on the subjects of price controls and food subsidies, is not the right hon. Gentleman aware that these measures could have brought industrial peace this winter? Would that not have been a very small price for the Government to pay in the end?

§ Mr. Godber
I sympathise with the hon. Gentleman's view and I wish I could agree with it, but I cannot. The cost of any attempt to have held prices of food would have been so vast that it would have meant enormous increases in taxation. Indeed, over the last year food prices have gone up by an extent that would have meant another £1,500 million in taxes to equate that rise. If the hon. Gentleman suggests that this would have held the situation and been more than a mere palliative, he is deceiving himself. The Government, under phase 3, provided for threshold arrangements which will be triggered off as and when the retail price index rises above 7 per cent. That should give considerable help to the workers concerned.

§ Mr. Body
Wheat is a key commodity in world prices. As we have been told repeatedly throughout this year that the world price for wheat is much higher than the EEC's price, why is it that right up until August this year the Community had to impose a levy upon imported 1583 wheat? Even in March the levy was over £20 a ton.

§ Mr. Godber
My hon. Friend is aware that while the world price is below the Community price the levies operate, but immediately the world price reaches the Community price the levies cease to operate. This is the function which operates within the Community and my hon. Friend is well aware of it. At present, no levies are operating because the world price is above the Community price.

§ Mr. David Clark
The right hon. Gentleman earlier called the Daily Mirror's report on the national food survey to his defence. Will he read the rest of the report, which shows that we are eating less beef, lamb and pork than during rationing?

§ Mr. Godber
We have discussed this matter many times. Perhaps I can explain it to the hon. Gentleman once more. The national food survey does not give the total consumption of meat. It gives the figures of food moving into consumption, which is the total figure. It may be of interest to the hon. Gentleman to know the figures compared with those of the rationing period. The total consumption of meat at present is 26.88 oz per head per week, compared with 19.37 oz under rationing. That is the true comparison. Whilst it is true that this year, particularly in the first half, meat consumption went down because of shortage of supplies, of which we all knew, it has risen again now, and there are good supplies in the shops.

§ 4. Mr. Spearing
asked the Minister of Agriculture, Fisheries and Food what elements of cost increases will occur on corned beef, tinned fish and tinned fruit imported from Commonwealth countries as a result of new EEC tariff arrangements coming into force on 1st January 1974.

§ Mrs. Fenner
Adjustments to the tariff on corned beef are made at the beginning of the beef marketing year in April. Supplies of canned fish and canned fruit from the non-associable Commonwealth will face the first step towards the CCT on 1st January. Supplies from the developing Commonwealth which have been offered association will continue duty free. Tariff changes are not necessarily 1584 reflected in retail prices; however, it is estimated that all the tariff changes due to take place on 1st January 1974 will result in an increase of only between ¼ per cent. and ½ per cent. on the retail food price index next year.

§ Mr. Spearing
Will the hon. Lady explain why she reverts to a percentage figure? Is she not aware that the Under-Secretary of State for Trade and Industry quoted the figure last Monday as being between £20 million and £40 million? Does the hon. Lady not agree that that is the effective increase in prices for next year, which has nothing to do with world prices but is a tax on food coming into the country, the results of which will not even stay here for expenditure but will go direct to Brussels?

§ Mrs. Fenner
But the results of which were estimated to be 2 per cent. per annum during the transitional period by both the Labour Government and the present Government in their negotiations to join the EEC.

§ Mr. Marten
Will my hon. Friend, for the education of all of us, publish in the OFFICIAL REPORT exactly how she arrived at the figure she gave, so that we can check it and compare it with the figures that other people have got? Secondly, on the question of food prices generally, is it not true that the subsidy on sugar was removed this year and that from 1st January we could have quite a lot of taxes on foods? I hope that the Government will publish particulars of these taxes on food.

§ Mrs. Fenner
The answer to my hon. Friend's second question is, "Yes". The sugar subsidy was introduced last spring. It was going to be removed at the end of December last year, but because we were in the period of freeze in the first stage of the counter-inflation measures it was eventually phased out.
My hon. Friend also asked me to publish in the OFFICIAL REPORT how we arrived at the figure I gave. I remind him that in my main answer, before pointing out that this would result in an increase of only between ¼ per cent. and ½ per cent. next year, I said that tariff changes are not necessarily reflected in retail prices. It is thus very difficult to state how we did arrive at the conclusion 1585 I have given the House, but I shall attempt to produce our reasons in the OFFICIAL REPORT.

§ Mr. Fernyhough
Does the hon. Lady not think it rather ironic that this Government have become party to a treaty that will increase food prices by between £20 million and £40 million in the year beginning 1st January when, at the same time, millions of workers are going to have their wages substantially reduced because of part-time work? Could not the Minister have repeated, in relation to these levies, what he said last week about putting butter into ice-cream—that he would be ashamed to go back to Britain if ever anyone said that that must be part of the policy of the EEC? Does the hon. Lady not think that the right hon. Gentleman might have used the veto, having regard to the difficult circumstances that we are facing on the industrial front?

§ Mrs. Fenner
No, Sir. Of course, when they negotiated to join the EEC the Government did not know that there was going to be a fuel and energy crisis, partly outside our control and partly nationally inflicted. At the United Kingdom's request, the EEC has agreed to examine the CCT on foodstuffs for items where the tariffs might be cut or suspended in order to help counter-inflation.

5. Mr. R. C. Mitchell
asked the Minister of Agriculture, Fisheries and Food whether he will establish a separate food price index to cover the Christmas period.

§ Mrs. Fenner
No, Sir.

Mr. Mitchell
Why not?

§ Mrs. Fenner
Because the food index measured prices on 11th December and will do so again on 15th January, and this covers the whole of the Christmas period.

§ 17. Mr. Golding
asked the Minister of Agriculture, Fisheries and Food what have been the increases in the prices of bacon and of eggs since June 1970 to the latest available date.

§ Mrs. Fenner
As the answer contains a number of figures I shall, with permission, circulate the information in the OFFICIAL REPORT.

§ Mr. Golding
Is the Minister aware that when I was a child my Christmas treat consisted of oranges and nuts, but that this Christmas, due to the massive increase in prices, bacon and eggs will now become the standard Christmas treat for many children because their parents will not be able to afford to give bacon and eggs to them on any other morning in the year?

§ Mrs. Fenner
With respect to the hon. Gentleman, and sharing with him a fairly spartan childhood, I have to say that what he has said is absolute rubbish. Bacon has risen in price between 21p and 29p per pound, and eggs have risen in price by 22p to 24p per dozen. [Interruption.] As my right hon. Friend has pointed out, rises in both wages and pensions have exceeded the rise in the cost of living. So it is nonsense for the hon. Gentleman to suggest that the British meal of bacon and eggs is a luxury.

§ Mr. Jay
As the Minister persistently seeks to mislead the House by pretending that the Government are not responsible for a large part of the rise in food prices in recent months, will the hon. Lady say whether her right hon. Friend voted on Monday night in favour of the Government's order introducing a number of new food taxes?

§ Mrs. Fenner
Yes, Sir, on the Import Duties (General) (No. 8) Order.

§ Mr. Winterton
Is not it time that the Opposition showed some responsibility towards our farmers, who provide our food, and realised the increased costs with which farmers are faced? Is it not time that the British public realised the value that they are getting from the British farmer?

§ Mrs. Fenner
The throughput in egg packing stations throughout the United Kingdom is down by 13 per cent. on last year. That is because low egg prices in 1972 did not cover producers' costs, and caused a cut-back in production. Cutting back production is no way of ensuring good value for money.

§ Mrs. Shirley Williams
Will the hon. Lady tell the House, first, whether this constitutes a doubling of the price of eggs? Secondly, will she say why her right hon. Friend constantly quotes earnings and not wage rates, which are the 1587 relevant rates in this respect? There is a distinction between earnings and wage rates. Thirdly, in the light of what she has just been saying, will she say whether she is giving any consideration to something for which the farmers of Britain constantly ask, namely, a pegging—indeed, a subsidisation—of the cost of foodstuffs to them?

§ Mrs. Fenner
On the first question, yes; it represents what the hon. Lady has said. Bearing in mind the explosion in the cost of animal foodstuffs, not even counting other costs, it is hardly to be wondered at. Earnings and wage rates are both relevant, but earnings are important, too, and I appreciate the hon. Lady's point on that matter.

Item	Change in Average Price (Money value)
Bacon (pence per lb.)
Collar	+ 21.3
Gammon	+ 28.2
Middle	+25.6
Back, smoked	+ 29.3
Back, unsmoked	+ 28.2
Streaky, smoked	+ 21.5
Eggs (pence per dozen)
Large	+ 22.4
Standard	+ 23.5
Medium	+ 24.3