Prices

HC Deb 28 June 1973 vol 858 cc1706-14

4. Mr. Molloy

asked the Minister of Agriculture, Fisheries and Food what has been the increase in food prices since the general election.

7. Mr. Carter

asked the Minister of Agriculture, Fisheries and Food by what percentage the cost of food has increased since 18th June 1970.

11. Mr. William Price

asked the Minister of Agriculture, Fisheries and Food by what percentage food prices have risen since June 1970.

22. Mr. R. C. Mitchell

asked the Minister of Agriculture, Fisheries and Food what is the percentage increase in food prices from June 1970 to the latest available date.

The Minister of Agriculture, Fisheries and Food (Mr. Joseph Godber)

Between 16th June 1970 and 22nd May 1973, the latest date for which information is available, the Food Index rose by 36.5 per cent.

Mr. Molloy

Would the Minister agree that he has just made an appalling admission of the Tory Government's useless endeavours to try to redeem their election pledges? Is he aware that the Department of Employment figures now reveal that average household expenditure has risen three times as much as have average incomes? Is he further aware that the British people are fed up to the teeth with his lamentable excuses when trying to redeem the discreditable promises made by the Conservatives at the last election? Will he say something to ease the situation to which the present Government have exposed so many old people?

Mr. Godber

No, Sir, I do not accept the hon. Member's analysis. I accept that this is a serious matter, but as the House knows perfectly well, these increases are the result of an acute world shortage, which no Government of this country could have prevented. Attempts by members of the Labour Party to prove otherwise are useless, because the facts completely deny what they say.

Mr. Trew

Will my right hon. Friend say what proportion of the retirement pension is now spent on food compared with the situation three years ago?

Mr. Godber

If my hon. Friend is referring to the period when the Labour Party was in power—in the second quarter of 1970, slightly over 45 per cent. of the retirement pension was spent on food. At present the amount of retire- ment pension spent on food is 40 per cent. That figure is taken from the National Food Survey, which shows a distinct drop in the percentage of pension spent on food.

Mr. Price

Has the Minister ever wondered why no Tory backbenchers ever table Questions on rising food prices?

Sir G. Nabarro

But we do.

Mr. Price

You are daft enough to do anything. I am sorry, Mr. Speaker, I withdraw that remark. Is it because we are getting some of the most shocking answers in this House? Is the Minister aware that if he is the housewives' friend, then the British housewife is in far more trouble than she imagines? Does he not agree that by the time of the next election, whenever it may be, food prices will have risen by 50 per cent.?

Mr. Godber

The hon. Gentleman is entitled to his view. My hon. Friends have tabled many questions on this subject and they are just as concerned about rising prices as are Labour Members. In regard to the position as a whole, what the Government are doing, and have constantly sought to do, is to increase the production of food here at home, since that is the best safeguard against world shortages. If the Labour Government had done the same during their period of office, the position now might be very different.

Mr. John Wells

Can my right hon. Friend give any breakdown in the rise in prices between imported food and home-grown food and any further breakdown between imported horticultural products and British horticulture? This will surely reveal the fact that the British producer is producing at a very reasonable price.

Mr. Godber

There are certain figures given in the National Food Survey which seek to break down the position. Those figures show that in recent months the increase in the imported price of produce has been slightly higher than that of home produce. This is in relation to fresh food. It is the shortage of imports and their high price which has drawn up the price of home produce. I cannot answer the question on horticulture without notice.

Mr. Mitchell

Is the Minister aware that every single day of the week we see substantial rises in food prices in all our shops? Is he also aware that we are getting tired of being told that this is all due to drought in Patagonia, or some other stupid reason? When will he get hold of the problem and do something about the sitation?

Mr. Godber

It is not a question of stupid reasons. These are factual reasons. So far as rises in prices are concerned, under the standstill manufactured food was controlled. During the standstill period the figures show that there was a slight drop in the price of manufactured foods. It was in fresh foods that the increase took place. Nobody pretended that these would be controlled, and they were not controlled by the Labour Government. The present Government have shown that in a country that imports a large proportion of its food, it is impossible and, indeed, impracticable, to control prices in the way suggested.

Mr. Evelyn King

Is it not a fact that there is no identifiable wage group or pension group in respect of which the increase in income has not far exceeded the increase in food prices, with the net result that people are better off? Is there not a separate problem to which a recent survey has drawn attention—namely, that only 40 per cent. of wage earners have passed on their increased wage to their wives?

Mr. Godber

On the point about passing on wage increases, my hon. Friend the Parliamentary Secretary has commented on other occasions. It is well known that there is an indication that those increases have not been passed on. As for the indices, the only fair comparison is with the all-items index, which has risen by 27.2 per cent., wages by 27.8 per cent., and pensions by 35 per cent., [HON. MEMBERS: "Before tax."] When hon. Gentlemen make the comment "Before tax", they must have in mind the fact that no Government in this country has reduced tax by as much as the present Government have reduced it.

Mr. Buchan

Is the Minister aware that the people of this country bitterly resent the suggestion that the reason for the fall in the standard of living is due to husbands and wives not co-operating in their budget? It is a disgraceful suggestion to make, and I wish Conservative Members would withdraw it. Does the Minister agree that, according to his own Government's report in the Department of Employment Gazette, whereas incomes, even up to 1972—before the freeze—rose after taxation by only 10.6 per cent., all prices rose by 37 per cent.—three times the level. Will he stop this nonsense? May I take this opportunity of congratulating the Minister on managing to convince nearly 700 people in Manchester of the rightness of his policy?

Mr. Godber

The index to which the hon. Gentleman refers shows that while expenditure on food has risen substantially, expenditure on vehicles, travel, entertainment and in terms of saving has increased a great deal more in percentage terms. This indicates that the public have substantial reserves to spend, and I do not accept that there is a fall in the standard of living in terms of food.

12. Mr. Charles R. Morris

asked the Minister of Agriculture, Fisheries and Food what has been the percentage increase in the retail price of food in the United Kingdom between the date of opening negotiations with the EEC and 1st June 1973.

Mr. Godber

The present Government confirmed the decision to open negotiations at a meeting of Ministers on 30th June 1970. The increase in the food index since June 1970 was given in my reply earlier this afternoon to the hon. Member for Ealing, North (Mr. Molloy) and others.

Mr. Morris

The staggering increase that the right hon. Gentleman announced earlier this afternoon will serve only to increase the anxiety of the British housewife about the increased cost of food as a result of entering the Community. Is he aware that this was one of the major issues that was responsible for the Government's disastrous lost deposit in the Manchester, Exchange, by-election yesterday? As a result of those two facts, would he indicate what consideration the Government are now giving to the introduction of food subsidies?

Mr. Godber

If the hon. Gentleman claims that the reason for the rise in prices is due to our entry into the Community, somebody has been misleading the electors in that area very considerably. I remind him that the rise due to entry into the Community is extremely small so far. I have spelt it out on many occasions in the House. The total estimate for this year would certainly not be more than 2 per cent., allowing for the negotiations concluded in April and at the beginning of May, which allowed us to make certain subsidies on butter and other commodities. The rise in prices, as the hon. Gentleman knows perfectly well, is due entirely to other matters, and to world conditions of which I have reminded the House before.

Mr. Charles Morrison

Is it not a fact that this country used to enjoy cheap food prices because of a cheap world food price situation which no longer exists? Is this not emphasised today by the announcement in the United States that they are banning the export of certain animal feeding stuff raw materials, such as soya bean and cotton seed meal, which will have a considerably adverse effect on the cost of animal feeding stuffs?

Mr. Godber

My hon. Friend is right to call attention to the serious developments in the world situation. I am asking for an urgent report on the particular matter to which he referred concerning soya bean and cotton seed meal which we have seen in the Press today. I understand that it is a temporary suspension. I hope that it is not as serious as first appears, but it emphasises the extent to which we are dependent on world conditions. We should have stimulated greater production earlier. The Government are stimulating greater production and the housewife will get the benefit of it.

Mr. Shore

The Tight hon. Gentleman must know that even more staggering than the increase in food prices generally that we have experienced over the last three years has been the increase in land prices, in particular, agricultural land prices. Surely he will not suggest that the increase of 100 per cent. in the last year alone in the price of agricultural land in Britain is due to world food prices. Surely it is due to the general incompetence of the Government in dealing with inflation and, even more so, to the exact anticipation by farmers of increased prices for agricultural product as a result of joining the Common Market.

Mr. Godber

I cannot agree with the right hon. Gentleman on this matter. I do not like to see such high prices for agricultural land. I do not believe that it is healthy from an agricultural point of view. On the other hand, I think that the right hon. Gentleman will recognise, as I do, that prices were artificially depressed when the Labour Government depressed agriculture so much in the past.

13. Mr. Hugh Jenkins

asked the Minister of Agriculture, Fisheries and Food what has been the rise in the price of butter since the Treaty of Accession with the EEC was signed.

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

The Department of Employment's General Index of retail prices shows that between 18th January 1972 and 22nd May 1973, the latest date for which information is available, the average retail prices of New Zealand and Danish butter fell by 30 and 24 per cent. respectively.

Mr. Jenkins

I am most grateful to to the hon. Lady—[An HON. MEMBER: "No, you are not."] Yes I am, as I shall show in a moment. Is it not the case that, in the Luxembourg Agreement in May, the price of butter was effectively raised from £390 a ton to £427 a ton? Is this fact not being disguised by the subsidy, and is it not time that the Government came clean about it?

Mrs. Fenner

Over the transitional period, the United Kingdom intervention price will move up in steps to that of the Community. But this year, of course, in negotiations, my right hon. Friend ensured the consumer subsidy at 2p a lb. which undoubtedly has led to the reduction in the price of butter this year.

Mr. Winterton

Does my hon. Friend not consider that the Opposition are spending far too much time on the price of food? [Laughter.] Although we agree —[Interruption.]

Mr. Speaker

Order. If the Opposition wish to curtail the length of Question Time, they are going the right way about it.

Mr. Winterton

Although we agree that it is very important, I would have thought that they would show equal concern for the farming community as a whole and the income—[Interruption.] They preach about agricultural wages. Where do they think the increased wages are going to come from unless it is from increased income for the farming community?

Mrs. Fenner

My hon. Friend—[Interruption.] No amount of bellowing like bulls from the back bench will get an answer for the Opposition. My hon. Friend has properly made the point that wages in agriculture, whose workers are among the lower income groups, I accept —[Interruption.] They were in fact among the lower income groups when the party opposite left Government, but the fact remains that they have had an increase in average wages of £5.75, which is far in advance of all the food prices that we have been talking about.

Mr. Farr

Will my hon. Friend consider extending to pensioners and all old people the butter subsidy that we discussed last night? Will she also consider advising our right hon. Friend to extend this system of subsidy to all food products that may be in excess as a result of the CAP, such as sugar and other commodities that may well be coming on the market in this way?

Mrs. Fenner

The limitations of what has come to be known as the social butter subsidy are agreed in negotiations in the Community and, of course, it is in negotiations in the Community that any extension of that subsidy or, indeed, any other can be agreed.

Mr. Torney

What steps do the Government propose to ensure that the stupidity of the butter mountain is not extended to many other foods—for instance, sugar, of which we expect a mountain soon? Will the Government take action to stop the waste of millions of pounds of taxpayers' money to bolster up this stupid Intervention Board? We want positive action on this.

Mrs. Fenner

The presence of the Conservative Party in the deliberations in Europe will ensure that rather more than the absence of the Labour Party.

Mr. David Clark

Would the Minister reassure her hon. Friend the Member for Harborough (Mr. Farr) that the Government have just removed the subsidy on sugar? Furthermore, would she confirm that, whereas the intervention price for butter in this country is just under £400 per ton, in the original Six it is over £800 a ton, and that, on these figures, the price of butter will have to double over the next five years?

Mrs. Fenner

The sugar subsidy was introduced last spring with an end date of the end of last year, so it was no surprise when it finished. With regard to the comments on the intervention price, United Kingdom prices move into intervention prices over the transitional period, and what that price will be in five years is not as yet known.