HC Deb 01 April 1974 vol 871 cc852-4
5. Mr. Michael Latham

asked the Secretary of State for Prices and Consumer Protection whether she will announce her detailed proposals for food subsidies; and whether she will make a statement.

Mrs. Shirley Williams

The Government have already announced decisions on milk and bread, and I am making an announcement about the financial arrangements for butter later this afternoon. I am considering the scope for further subsidies and will let the House have details of our proposals as soon as possible.

Mr. Latham

Has the right hon. Lady calculated the proportion of the £500 million subsidy which is going to those with above-average incomes and to those who eat in hotels and restaurants?

Mrs. Williams

The proportion of the subsidy which goes to those with low incomes and to pensioner households is far more substantial than any proportion which goes to those earning more than £60 a week. To be precise, the elements which we are already subsidising rate far more heavily in the index for pensioners than they do for average earners and for all households.

Mr. Gwilym Roberts

In view of what she said in the debate on the Gracious Speech, may we be assured that my right hon. Friend will not confine her study of subsidies to the food sector but will consider perhaps vital subsidies in other sectors?

Mrs. Williams

My hon. Friend will recognise that this is a matter for other Ministers as well as myself. I ask him to await further announcements on the matter.

Mr. Biffen

In view of what she has just said, will the right hon. Lady bear in mind that there are many of us who have a deep-rooted opposition to the whole idea of subsidies on the scale proposed by the Government? What are the mechanics whereby the subsidy shall be paid, and how will one know whether it has been paid only on flour used for baking the 14oz. or heavier loaf?

Mrs. Williams

On the second part of his supplementary question, I ask the hon. Gentleman to look at the machinery set out in the paper which has been laid in the Library, which gives details of how we shall ensure that the flour which is subsidised is used for bread manufacture only. In response to the first part of the question, I must point out that the previous administration, which the hon. Member supported, subsidised nationalised industries to the extent of many hundreds of millions of pounds, and it does not lie in the Opposition's mouth to accuse us of using subsidies wildly.

24. Mr. Ridley

asked the Secretary of State for Prices and Consumer Protection what is the expected cost of the bread subsidy this year, and in 1975, on the assumption that the price of bread does not rise during the period.

Mrs. Shirley Williams

The cost of offsetting the price rises which would otherwise have taken place on 25th March is estimated at £16 million for the remainder of this year and £21 million in a full year.

Mr. Ridley

Is it not the case that the cost of keeping the price of bread level for a year or two would be enormously more? What is the point of giving a bread subsidy which amounts to about 40p per head per year in view of the rapid inflation that is taking place and the much better use that could be made of the funds?

Mrs. Williams

I have a feeling that the hon. Member and I would disagree about the better use of the funds. We can think of few better uses of the funds than to concentrate on foodstuffs such as bread which loom extremely large in the diets of large families and pensioners.

Mr. Gorst

Does the right hon. Lady agree that it makes no sense to give an indiscriminate subsidy to all sections of the community when her right hon. Friend the Chancellor of the Exchequer has been trying to take away such crumbs of comfort from the very rich? Would it not make more sense to be more selective in the way that the subsidy is handed out?

Mrs. Williams

The previous administration subsidised milk and a wide range of the products of nationalised industries without discriminating in any way. We are entitled to concentrate above all on the essential foodstuffs which loom largest among the poor. If anything, our subsidy is more concentrated on the low income group than was that of the previous administration.

Mr. William Hamilton

Will my right hon. Friend consider appearing before the Expenditure Committee so that she can explain in great detail, and in greater detail than is possible in the House, why she is spending so much on certain food subsidies and why, as she has suggested. the previous Government gave indiscriminate subsidies? Does she agree that it would be valuable to get such matters on the record?

Mrs. Williams

I should be more than pleased to accept my hon. Friend's invitation in view of the intelligence of the questions he asks.

Mr. Channon

As the right hon. Lady indicated earlier that it was not then a convenient moment for me to put my question, will she now tell the House, as she is being discriminating, what the net effect of her budget will be on every working family in the United Kingdom? Will she tell the House that as a direct result of that budget the retail price index will go up by over 3 per cent. and ordinary families will be worse off and not better off?

Mrs. Williams

The figure has been given to the House by my right hon. Friend the Paymaster-General. In our estimate, the effect on the retail price index will be approximately 1½ per cent. I cannot accept the argument of the Leader of the Opposition that price rises which were otherwise inevitable and were then avoided as a result of the Government's action, with a consequent effect on the retail price index—such as rent increases and increased bread prices—should not be attributed to the action of the present Government.