MILK (PRICE CONTROL)

HC Deb 16 December 1974 vol 883 cc1298-314

11.54 p.m.

The Minister of State for Agriculture, Fisheries and Food (Mr. E. S. Bishop)

I beg to move, That the Milk (Extension of Period of Control of Maximum Prices) Order 1974, a draft of which was laid before this House on 5th November, be approved.

Mr. Speaker

Order. Will hon. Members withdraw quietly and quickly?

Mr. Bishop

The purpose of the order is to extend for a further period of five years the power of the Minister of Agriculture, Fisheries and Food, or the Secretary of State for Scotland, to control the maximum price of liquid milk, and it is restricted solely to that.

At present, the Minister, acting jointly with the Secretary of State, lays down the maximum retail prices for Great Britain and, acting alone, the maximum retail prices for Northern Ireland. The statutory powers derive from Section 6 of the Emergency Laws (Re-enactment and Repeals) Act 1964, seting the renewal by Order in Council at intervals not exceeding five years. In 1969 Parliament approved an order extending the powers until 31st December 1974.

The need for retail price controls on milk has been recognised by successive Governments for nearly 35 years, and the reasons leading to that decision in the past will, I believe, be generally recognised today as being still valid. They have, indeed, taken on an even greater importance in the light of the fight to control inflation. But perhaps I may briefly summarise these reasons.

First, there is the special importance of milk in the national diet. We are, of course, a nation of milk drinkers, and milk constitutes one of the largest single components of the food price index. Secondly, there is the special nature of the marketing arrangements for milk, which over the years have become concentrated mainly in the hands of large concerns. At first hand level, sales of raw milk are made through the milk marketing boards, while the processing, bottling and distribution to the doorstep are to a great extent caried on by a relatively small number of large firms. This has made for great efficiency and high standards of hygiene.

Control of the retail price of milk is an essential part of the existing interlinked arrangements covering the guarantee to producers, the Government-controlled remuneration to milk distributors, and the assurance of reasonable prices to the consumer. These arrangements have worked well for the benefit of all concerned, ensuring stable conditions in this important sector of the industry. In addition, at present control of the retail price of milk is a means of implementing the decision to pay a consumer subsidy as part of the Government's strategy for controlling the prices of certain basic foodstuffs.

I make one further point. Many hon. Members are, I know, concerned about the return to milk producers. The level of the return is determined by the decisions taken by the Government about the guaranteed prices and not by the level of retail prices. Having made the guaranteed price, the Government then have to decide whether the cost should be met by the consumer through an increase in the retail price, or whether there should be an element of subsidy.

Finally, the measures that we took in October to increase producers' returns by nearly 8p per gallon during the six months of winter showed the importance that we attach to ensuring an adequate return to our producers to enable them to meet the exceptional increases in costs. At the forthcoming annual review we shall be examining in detail with the fanners' unions all the factors affecting agriculture. For the reasons I have set out, we consider it appropriate to continue the Government's power to control the price of milk, and I therefore ask the House to approve the draft order.

11.59 p.m.

Mr. Robert Hicks (Bodmin)

The order will give the Government authority to control the maximum price of milk for a further five years. In considering this matter I think it only right to remind the House that in dealing with the milk industry we are discussing an economic activity over which the Government maintain a very tight control. No other industry, not even in the nationalised sector, is under such control. This is nothing new. Control of some kind or another has existed since 1933, but surely that is not to say that this House should automatically renew this application for a further five years without first examining the current position, since in determining the maximum price the Government are setting the context into which the producers' incomes, and the distributors' margins and allowances, must be considered, as well as the final price paid by the consumer.

It is against that background that I should like to pursue three specific aspects inherent in the consequences of the acceptance of this order. The first concerns the period of five years. The Minister could clarify the position, since it appears that if there were a Government in office which were insensitive to changing circumstances, not only would hon. Members be restricted in the extent of their representations but individual sectors of the milk industry could suffer unnecessarily. Why, then, is a period of one or two years not specified —or does the Minister wish to keep permanent control over this important industry?

My second question relates to the position of the producer. This is crucial, since his position at present is not a happy one. This confirms my earlier observation about changing circumstances and the degree of flexibility and sensitivity shown by the Government.

The milk output of the nation at present is significantly below its potential production level. Milk for the liquid market is at present limited, while there are real shortages of milk for the manufacturing sector. I do not need to elaborate on the adverse consequences of this situation on our balance of payments if it is allowed to continue.

I am certain that the House would welcome some indication of how the Minister envisages increasing the level of producer returns to provide a muchneeded stimulus to domestic production in the context of this order, which will enable him to fix maximum prices, particularly bearing in mind the rapid and steep increases in producers' costs and the recommendations contained in the report on milk production of the Select Committee on Expenditure, which was published recently.

My third request for additional information and clarification concerns the relationship between this order and the Government policy of subsidising the cost of essential foods to the consumer. I appreciate that the price of milk has a significant weighting in the retail price index and the index of retail food prices. I believe that an increase of lp on a pint of milk would increase the retail food index by nearly 1 per cent. It is only since 1972 that the Government have used their ability to fix the retail price of milk as an instrument of policy in attempting to reduce the rate of increase in the cost of living. As a result the milk fund incurred a deficit in 1972.

In his Budget speech, the Chancellor of the Exchequer announced that the retail price of milk was to be reduced by lp per pint, and, although since September, when the Council of Ministers agreed on an award to milk producers, the retail price was increased by ½p per pint, it still means that during the current financial year, 1974–75, the estimated value of the subsidy to milk, will be of the order of £270 million. This, I should be grateful if the Minister could confirm whether this figure represents the total milk subsidy or whether there is a further latent subsidy in the form of a milk fund deficit. There could well be an overlap here of the use of the taxpayers' money, and we would welcome the Minister's clarification.

Above all, within the context of the order, the real practical problem is to provide a reasonable and consistent return for both producers and distributors and, at the same time, to charge a price to the consumer which is meaningful and yet will not reduce the overall level of demand for milk. It is not an easy equation to solve. But of one facet I am clear. Short-term price fixing at the expense of the producer will lead only to greater difficulties for the nation as a whole in the long term.

12.7 a.m.

Mr. Bob Cryer (Keighley)

I am grateful for this opportunity to comment on the order, and from the original Act of 1964 it provides very tight control by the Government. This is a very good example of how the Government can control an industry. It is necessary for the Government to do so, and it seems that the Opposition accept this degree of Government control. It is the kind of Government control which could well be extended.

I ask the Minister to ensure, however, that milk production is safeguarded and possibly increased. He might like to comment on this. Over the past two or three years milk producers have been going through a very difficult period, and I recognise that.

The Minister said that a lot of milk was distributed by large distributors. I want to pay tribute to the many small distributors who distribute milk, often under arduous conditions, and who find a degree of difficulty under price control in obtaining a sufficient margin to enable an efficient distribution service to be maintained.

The Minister pointed out that milk was an important food and one of the most important elements in the food price index. I agree that it is a very important food, and that is why we control the price. But, in view of its importance, will the Minister consider extending the provision of milk at no price at all to 7 to 11-year-olds? Some members of the Labour Party fought vigorously in the past to provide milk for 7 to 11-year-olds. As it is such an important food, that is a possibility which my hon. Friend might consider.

I realise that there are difficulties about milk supply, but I ask for assurances about milk supply in the context of the control of prices—

Mr. Deputy Speaker (Mr. George Thomas)

Order. We are not discussing milk supply as much as whether the price of milk shall be controlled.

Mr. Cryer

The Minister referred to milk supply, and therefore I felt it reasonable to enlarge a little upon it.

In the context of Government control over the industry and the very searching scrutiny that the Government impose under the powers inherent in the Act of 1964, this order is to be welcomed. Price control is part of the social contract. It is pleasing that the Government are acting to extend these powers for five years. I recommend my hon. Friend to convey to the Government the feelings of some of their supporters that this sort of price control should be extended on a much wider basis so that the powers in the Act may be used more effectively.

12.10 a.m.

Mr. Peter Mills (Devon, West)

I welcome the opportunity to say a few words about the milk industry and the order. This is the second or third debate dealing with milk in which I have taken part during the past few years. Milk is one of the basic foods. It is a sensitive food politically. For my part of the country, the South-West, it is of vital importance. Everything that we do in this House has a profound effect on the milk industry. It is easy for Governments of all shades to bring various orders and regulations before us. Sometimes I do not think we fully realise the effect that they have on the milk producers and the industry generally.

This order sets out to control the maximum price to be charged for milk. For the time being I agree with the Government, although I agree with my hon. Friend the Member for Bodmin (Mr. Hicks) in thinking that five years is too long. I should like the order to run for a year or two, and to see how the industry goes in the meantime. Certain results flow from a policy which controls the end price of a product. You may be thinking, Mr. Deputy Speaker, that some of us may be getting out of order, but I submit that there is a chain reaction when the price of a product is controlled, and it is right that we should discuss this.

Mr. Deputy Speaker

I had better make clear what my ruling is. Hon. Members must confine themselves to discussing whether the maximum price of liquid milk should continue to be subject to control. If the hon. Gentleman relates his argument to that, he will remain in order.

Mr. Mills

I shall try, and with your guidance, Mr. Deputy Speaker, I know that I shall be kept on the right lines.

This order will have a chain reaction. Have the Government taken into account the effect the order will have on producers? Will we get the milk required? Producers and retailers are kept within certain limits by the order. In a world of inflation, which means rapidly rising costs, unless producers and retailers can recoup their costs we simply will not get the milk required. It is no good setting a controlled price if we do not get the milk we need. Both the producers and the retailers are concerned that it seems as though people want milk but do not want to pay a fair price for it. If we want milk, the lesson to be learned is that costs will have to be met. If we control the price of the end product, there has to be some way of enabling retailers and producers to recoup their costs. Certainly, the country needs more liquid milk, butter and cheese. Factories demand a constant supply of milk, and I hope that the Government will ensure that there is an adequate supply.

What is the position in the industry today? There are many factories running on half production because of the fall in the input of milk. We come back once again to the cardinal rule that if we want the milk, however much we control the end price, we must see that there is recoupment, otherwise we shall not get the necessary supplies.

What does price control do to consumption? If we reject the order and milk is freed from price control, there will be a dramatic effect on consumption. The general public do not realise what a bargain they are getting in a pint of milk. It is still one of the best and cheapest foods. If there is no price control, costs will rise dramatically. But if there is price control the Government have to subsidise milk, and subsidisation distorts the whole pattern of the industry, milk consumption increases and there are insufficient supplies for manufacturing purposes. Will the Minister comment on that problem, which concerns producer, retailer and manufacturers?

I welcome the Minister's hint that he is concerned about the future of milk producers. I too am concerned. The Minister said that the Government are looking closely at costs in the industry and at the price review. I hope he will accept from me that if he wants milk the price review will have to be a satisfactory one.

What will happen to retailers if we accept the order? Their end price is controlled. Retailers and distributors are sometimes in extreme difficulty because of the tremendous rise in distribution costs. I wonder whether the public realise that the pint of milk on their doorstep represents the best milk distribution service in the world. I am full of praise for the Co-operative Society, Unigate, the Express Dairy and the smaller firms for the service they give to the public. But their end price is controlled and they as well as the producers must have a fair return to cover distribution costs. [Interruption.]

Mr. Deputy Speaker

Order. Interruptions from a sedentary position are no more welcome from the Front Bench than from the back benches.

Mr. Mills

Thank you, Mr. Deputy Speaker, though, with great respect, I am well able to look after myself.

This point is important. Perhaps the Minister of State can tell us about retailers and their costs and the fact that their end price is controlled.

I believe that the order represents the right course for the Government and I shall not vote against it, although some of my hon. Friends may well do so. But I hope that the hon. Gentleman will bear in mind the points I have raised and will clearly tell us why he is bringing forward the order for a period of five years. There is a big question mark there, and the industry—retailers, producers and wholesalers—would like to know the reason.

12.21 a.m.

Mr. Nicholas Winterton (Macclesfield)

I have constituents involved in the production and distribution of milk, and I too ask why it is necessary to bring in the order for a period of five years. During the next two or three years we should, I believe, move towards a market price for milk. It is intolerable, when the Chancellor of the Exchequer says that the nationalised industries should stand on their own feet, particularly the energy industries, that milk should be heavily subsidised, to the detriment not only of the producer but also of the distributor. What is the total cost to public funds, in the milk fund and the direct subsidy, of keeping the price of milk as it is? As has been said, there could well be liquid milk shortages next year, and that forecast is substantiated by information from my constituency.

At the General Election in February I openly advocated a rise in the price of milk by at least one penny a pint. In my constituency there was no objection to it. I believe that the public realise the excellent bargain in a pint of milk. The delivery of a pint of milk to one's home each day is more reliable than the postal service. Probably we shall soon be paying 5p or 5½p per letter which is not guaranteed to be delivered next day. But milk is delivered to the doorstep every day.

The Minister should seriously consider in the next year or so phasing out the heavy liability of the taxpayer for milk subsidy and work towards a proper market price. It is important that that should be put on record at this stage.

I shall not vote against the order. I give it my support. It is right, however, that we should express our concern at the continuation of a very heavy subsidy for milk, and I hope that the present Government, and certainly the next Conservative Government which will not be too long in coming to office, will move towards a market price for milk, thereby producing a situation in which we get the milk we need and the producers feel that they are getting a fair return.

12.25 a.m.

Mr. Jerry Wiggin (Weston-super-Mare)

Like my hon. Friend the Member for Macclesfield (Mr. Winterton), I am on record as having made it clear just over 12 months ago that it would have been wise and right then to increase the retail price of milk, and thereby enable the farmer to have up to 8p a gallon extra for his product. We all know why that decision was not taken. We understand why the then Government were reluctant to do what I proposed. It is true that in the price review that followed in February—it was brought forward because of the election —the money was provided to the farmers and paid retrospectively.

The order raises a far bigger question than just the specific regulation to control the retail price of milk. It raises the whole question of whether we should subsidise foodstuffs at all. It goes further and encompasses the question whether marketing boards should be given the responsibility for the control of production and their relation to supply and price.

Mr. Deputy Speaker

The hon. Gentleman is beginning to wander. This is a narrow order, and my job is to see that the hon. Gentleman keeps to the straight and narrow path.

Mr. Wiggin

I take your point, Mr. Deputy Speaker, but the only agricultural product with a fixed retail price by order is milk. The order deals with that, and therefore it is surely within its terms to discuss the philosophy behind it. That is what I was trying to do, but I shall try to remain within your strict injunction.

The dairy industry is the main plank of farming in Somerset. A decline in the industry, whether from a fall in calf and cull cow prices or in the liquid milk price, is a crucial matter to the prosperity of the whole of our agricultural world, going a great deal further than the boundaries of the county.

My hon. Friend the Member for Devon, West (Mr. Mills) mentioned the chain reaction of Government control of the price of milk for electoral or other reasons without the prosperity of the dairy industry. As a farmer for most of my working life, I can only say that when Governments have had this power they have inevitably turned to the balance of votes and have seen that there are 55 million consumers and 300,000 farmers.

Tonight we are entitled to direct our attention to the farmers and their prosperity. I find the order nothing like as acceptable as do my hon. Friends. It is wrong to single out one agricultural product, however vital. Why should this product above all be singled out for strict control? I understand that the Minister's party has chosen to subsidise many foodstuffs, but that is a policy unacceptable to my party. Therefore, I am a little surprised at the reaction to the order from my side of the House. If the Minister does not give satisfactory answers, I shall not be able to support the order.

12.29 a.m.

Mr. Giles Shaw (Pudsey)

I support my hon. Friend the Member for Macclesfield (Mr. Winterton) in drawing attention to the fact that milk at 5p a pint is ludicrously cheap compared with many other items that the consumer has to buy. It is particularly cheap compared with the 4½p and possibly 5p post, which suggests that the price of milk, with all its goodness and nutritional value, is only about ½p when delivered to the consumer's door.

Contrary to the marketing concept that the Minister wishes to establish, the consumer of liquid milk should recognise its value and pay a fair price. That price should allow an adequate margin for the wholesaler, retailer and ultimate producer. The first point to be made is that at 5p a pint of milk is far too cheap.

The second point, in relation to the subsidy, is that when we discussed in the Committee considering the Prices Bill those foods which might be suitable for subsidy, it was the Government's view that they would select foods which were inelastic in demand. Yet in relation to milk and the subsidy that has been levied on that product in the past months, I am led to believe that the demand—this is according to one of the major dairies with which I was in contact—has risen by 3 per cent. or 4 per cent., which is exceptional in relation to the dairy's recent past. It suggests that keeping the price artificially low stimulates demand, as one might expect, and this leads to problems within the agriculture industry. When the Minister seeks to obtain provision for five years he should recognise that the problems of supply and demand cannot be set on one side against the possible reaction by the consumer.

The third point concerns the question of length of time. It seems to me that when one discusses food subsidies—I appreciate your ruling, Mr. Deputy Speaker, that this is not a debate on the principle, but that must surely follow in due course—one cannot take them in isolation from the general inflationary context. When one hears that the price of a commodity is held to within 4p, 5p, or even 6p or 7p in relation to the current rate of inflation and the depreciation of our currency, one must believe that that commodity will appear, by contrast, increasingly cheap and therefore of increasingly lower and lower value in real terms.

The consumer will judge the commodities she buys by the real value of the money she has in her purse. If she finds that a food, albeit a nutritional food such as milk, has become very cheap in relation to other commodities which she values equally highly, she is bound to set considerably lower store by that product, and the distortion therefore becomes so great that the Government find it almost impossible to remove.

With a valuable product like milk, the Government should take not a long-term but a short-term view. They should take a realistic view in relation to demand, in relation to the price charged in comparison with other commodities and in relation to the demands of the producer and the distributor of this vital product.

12.32 a.m.

Rear-Admiral Morgan-Giles (Winchester)

I wish to raise only one point, which has not been raised so far. Before doing so, however, I should declare an interest as a milk producer. I ask the Minister whether he realises that by continuing the order he is perhaps not perpetuating but ensuring the continuation for a long time of the difficulties affecting small producers. The big man has difficulties, but he has a lot of land. He has kale planted and he can somehow feed his cows. But the small man, with no land and only a small herd, must buy foodstuffs and he is placed in great difficulties.

I hope that the Minister realises this and will take it into account when implementing the order.

12.33 a.m.

Mr. Bishop

We have had a useful debate. I hope that I can stay within the terms of the order in making some replies.

There seems to be some contradiction among hon. Members on the Opposition benches about whether the order should be supported or whether it should be changed. The fact remains that similar orders have been presented to the House for about 35 years under successive Governments.

The only thing that we are debating in the order is whether we should continue with price control. Various questions have been raised by hon. Members opposite, particularly the hon. Member for Bodmin (Mr. Hicks). I thought that he put some responsible questions, and I shall try to answer them.

The question of the duration of the order has been causing some concern. The Minister and the Secretary of State for Scotland fix maximum retail prices for milk by orders made under Section 6 of the Emergency Laws (Re-enactments and Repeals) Act 1964. That section of the Act was due to continue in force until the end of 1969, but its operation was extended until 31st December of this year by the Milk (Extension of Period of Control of Maximum Prices) Order 1969. I would point out that the powers under the legislation are such that the Act may be extended for a further period of not more than five years by a similar Order in Council, subject to approval by resolution of both Houses.

The existing milk orders prescribe maximum retail prices for various types of liquid milk, and the powers in the enabling Act are permissive, not mandatory. If the Government wish at any time to disband or abolish control over any or all milk prices, this could be done. It is a permissive and not a mandatory order. If there were to be a substantial change, so that control was no longer necessary, the Government could at any time abandon that control by the existing milk price orders, or they could allow them to lapse without replacement.

It is important, incidentally, to have the possibility of a longer period, because such duration can give greater confidence to the industry. At a time when we are reminded about the lack of both confidence and long-term assurances, the fact that we have power to go on without, at this stage at any rate, any intention to change the situation is reassuring and welcome to the industry.

The hon. Member for Devon, West (Mr. Mills), the hon. Member for Bodmin and other hon. Members spoke about the profitability of milk production. This is the essence of getting the quantities of milk we need. The measures that the present Government took in October had the effect of increasing the returns of milk producers by 8p per gallon—I had better be precise and say 7.7p, in case I am accused of exaggerating —over the winter months October to March. They took into account the high cost of feeding stuffs and the present low returns on cull cows and calves, and the more recent measures taken for beef may give additional help here. The October award was worth over £100 million. This is a direct injection into the dairy industry towards giving it much greater confidence, and this was justified. It should help reverse the decline in milk production and put dairy farmers in a position to expand their production.

Mr. Hamish Watt (Banff)

Can the Minister give an assurance that the 7.7p increase will continue after February? It is essential that the dairy farmers should know now what is to be the price next year, to enable them to work out their breeding programmes. Already there are far too many in-calf cows going to slaughterhouses that should be retained for spring, summer and autumn supplies of milk next year. It is essential that producers, who will be working out mating programmes in the next few weeks, know what the price is likely to be in a year's time.

Mr. Bishop

I am sure that the hon. Gentleman would be rather surprised if I were now to give him the information he seeks. He claims, I think, to speak for the industry, or at least for those whom he represents in his constituency. We are holding detailed discussions with the industry, with the NFU, and what the hon. Gentleman raises will be a matter for consideration in the price review. I take the hon. Gentleman's point. The Eighth Report of the Expenditure Committee has now recommended 8p per gallon and I am glad that we are able to accede to that recommendation.

The 1975 Annual Farm Price Review which is about to start will involve a detailed examination of all the factors affecting the dairy industry. It is not possible to anticipate the determination, but the points that have been made in the debate will be borne in mind. We must have regard to the factors which affect this industry, and I can give an assurance that we shall not be lacking in that respect.

The present system of price control is an essential part of the guarantee arrangements and the consumer subsidy. Before the introduction of the subsidy, successive Governments had fixed the retail price at a level which ensured that, taking one year with another, the consumer would meet the cost of the guarantee to producers as well as distributors' margins. Currently the price is fixed at a lower level and the balance is made good by the consumer subsidy.

The hon. Member for Bodmin asked about the fund. The guarantee is to milk marketing boards acting on behalf of milk producers. The essential feature is a guaranteed price for a standard quantity currently representing virtually all the milk produced. Until recently it has been the policy of successive Governments to set the retail price at such a level that, taking one year with another, the liquid milk consumer met the full cost of the guarantee as well as the margins for distribution.

The order is not directly linked with the subsidy that is being paid on liquid milk, although it provides the basis for imposing the maximum retail prices and thus helps to ensure that the consumer receives the benefit of the subsidy. The Government have brought relief from rapidly rising food prices by introducing subsidies on a number of basic foodstuffs. Milk was an obvious choice for subsidy as it is regularly purchased by most households and is particularly important to families with young children and to old people.

It is rather odd to hear Tory Members talking about milk being ridiculously cheap and the cost being far lower than it should be, because at both the last election and the one in February all parties pledged to take action on the cost of living. I am not sure of the current value of the food subsidies, but until recently it was at least 65p a week for the average family of four—that is, a man, his wife and two children. If the subsidy was not paid the cost of milk would rise and it might be that millions would go through the threshold much sooner and thereby add to the inflationary situation, I therefore feel that the subsidy, with other food subsidies, is justified.

I think I have answered all the questions that were asked. We recognise that the price of milk is a bargain. This commodity is cheaper now than it was when we took office in March, and a tribute should be paid to producers and to the milk marketing boards for a situation that is without parallel, for the work that has been done in producing the milk that is so essential to our community and for the efficient way in which the milk is made available to those who need it.

Mr. Cryer

I accept all my hon. Friend's arguments about the value of milk. Will he comment on my suggestion that because of its nutritional value and the importance of price control it would be a useful exercise to consider the restoration of free school milk to 7 to 11-year-olds?

Mr. Bishop

I was about to come—

Mr. Deputy Speaker

Order. If the Minister ventures to answer that question he will go beyond the scope of the debate.

Mr. Bishop

I was about to come to the point made by my hon. Friend in his tribute to the small man. Apart from the work done by the big men, the small men all over the country perform an important service.

I should not be in order if I were to answer my hon. Friend's question about free school milk, but if I were to deal with it I should say that it did not come within the terms of the order.

Mr. Deputy Speaker

That is all right.

Mr. Wiggin

Before the Minister sits down, may I ask him to deal with the important point I made? On what ground does he justify singling out milk for Government control in this way?

Mr. Bishop

I think most people agree that milk is basic to all households. It is therefore an essential part of the food budget. If milk was not subsidised, the cost would be much greater and the inflationary spiral made greater by increasing wage demands in that direction.

The hon. Member for Weston-super-Mare (Mr. Wiggin) asked about the milk fund. From the retail sales of milk we get 51 per cent. of the price, from the sales of milk for manufacture within the standard quantity we get 22 per cent. and the subsidy represents 27 per cent. Therefore, without that subsidy the cost of milk would be much higher.

I hope that the House will accept the order, which gives power to control the price of milk for a maximum of another five years.

Mr. Winterton

Before the Minister sits down, may I put one question? Seemingly the order will be passed tonight. I am glad that it is not mandatory and that it allows the Minister discretion. May I ask for an assurance that the heavy rise in transport costs, particularly fuel and oil, facing distributors and producers will be fully recognised in any award that is made next year?

Mr. Bishop

I think I can give that assurance. That is a matter for the Milk Marketing Board in addition, but I am sure that the Government will bear these factors in mind in the forthcoming price review.

Question put and agreed to.

Resolved, That the Milk (Extension of Period of Control of Maximum Prices) Order 1974, a draft of which was laid before this House on 5th November, be approved.