FOOD SUBSIDIES (Hansard, 12 June 1974)

§ The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan)
I beg to move amendment No. 1, in page 1, line 11, after 'sale', and insert: ' and household flour, that is to say, flour not for the manufacture of any product for sale'. The purpose of the amendment is to enable my right hon. Friend to pay a subsidy on household flour. The amendment will add to the basic foodstuffs which we have already announced are to be subsidised under the powers contained in Clause 1.
When the Government announced their intention to subsidise flour used in the commercial production of bread, hon. Members on both sides of the House made strong representations that it would be appropriate to consider the subsidisation of flour used by the housewife in baking. We have had wide representation from the public, and I think that this step will be generally welcomed.
1668 I am afraid that the terms of the amendment may seem rather complex for a simple matter of this kind, but we have to use these words to make it plain that in Amendment No. 1 we are not seeking power to subsidise flour used for the commercial production of products other than bread. It would be possible under Clause 1(2) to subsidise all flour if the Government thought this to be appropriate, but at this stage in the development of our policy of subsidies we are seeking to add to the number of key items which feature regularly in the shopping basket of most households.

§ Mr. Bruce-Gardyne
Could the Minister explain what he means by "household flour"? What types of flour are included? Does it include oatmeal? He said that the amendment was drafted to exclude flour for commercial production, except for the commercial production of bread. Is that what he meant?

§ Mr. Maclennan
I shall be coming to the question of the definition, if the hon. Gentleman will contain himself.
Household flour is an important item which accounts for some £40 million expenditure by the housewife. We have been concerned in recent months that the price of household flour has risen extremely sharply. To take one example, involving a particular type of flour, the information collected by the Department of Employment for purposes of the retail price index shows that in the four months up to April 1974 the average retail price of the 3-lb bag of self-raising flour increased by 4.9p—from 14.9p to 19.8p, an increase of about one-third.
6.0 p.m.
In introducing this amendment, I recognise that I am not giving the House the full details of the proposed subsidy, including the date on which we seek to implement it, the rate of the subsidy and the estimated cost to the Exchequer. I am afraid that this is not possible. Before the Government reach decisions on these matters, we are anxious to take account of price movements which seem likely to occur in the near future. We shall be considering the position in the light of any price notifications to the Price Commission, and we hope to be able to make an announcement to the House about this shortly.
1669 Meanwhile, in order to give some indication to the House of the possible magnitude of the cost and the effect of the subsidy on household flour, perhaps I might give one example. On the latest RPI survey day, which was in mid-April, the average retail price of ordinary self-raising flour was 20p for a 3 lb. bag. If we brought in a subsidy to reduce the price by 3p that would represent a cut of 15 per cent., and the cost to the Exchequer would be about £10 million in a full year. The effect of such a subsidy on the food index would be about 0.07 per cent., or about 0.02 per cent. on the retail price index as a whole. I emphasise that those are purely illustrative figures. The cost and effect of the subsidy would be smaller or greater depending on the movement of prices in the forthcoming week.

§ Mr. Cormack
When does the hon. Gentleman expect to be able to give us the real figures?

§ Mr. Maclennan
As I have said, they will be given shortly. I am afraid that I cannot be more precise, but the information will be given to the House at the earliest possible date.
The benefit of the subsidy will be welcomed by the many housewives who have made representations to the Government about it. The benefit may be felt especially in those parts of the country where it is traditional to bake bread in the home. In consequence of this custom, some people in rural areas and in parts of the regions have not received the direct benefit of the bread subsidy to the same extent as other sections of the community.
In reply to the hon. Member for South Angus (Mr. Bruce-Gardyne), who asked what precise flour we had in mind, we have been very conscious in bringing forward our subsidy programme of the special problems of the immigrant section of the community arising from the enormous increases in the price of rice, which forms a staple part of the diet of many immigrant communities. Because of the present supply problem, it looks as though it will be unlikely that we shall be able directly to intervene to subsidise rice, but we intend to use the power contained in this amendment to subsidise the special flour used in the production of the staple food of many immigrant 1670 communities known as chapati. On this too, we have received a number of representations from hon. Members on both sides of the House. I hope that this effect of the amendment will commend itself to the House.

§ Mr. Bruce-Gardyne
Our proceedings grow weirder and more wonderful with every moment that passes. I took a note of what the Minister said in his rather labored explanation of the amendment. He said that he did not really know how the amendment would work, what it entailed, what it would cost or when it would apply. In fact, he appeared to know nothing about it. He said that the Government were anxious to take account of expected price movements which might occur. I do not know whether he is the seventh son of a seventh son. Has he second sight? Does his Department intend to call in a resident soothsayer? If so, may we have details of the emoluments of this lady or gentleman?
When the Government eventually manage to work out these remarkable details, bearing in mind that the hon. Gentleman referred to applications which might come before the Price Commission, I hope that there will not be a repetition of what happened in April with the Price Commission over the price of bread. It will be remembered that on that occasion the commission, obviously behaving in a manner calculated to please or to appease the Secretary of State, managed artificially to reduce the cost of the eventual bread price subsidy by abusing its powers to delay consideration of an application for a price increase in a most improper manner. I hope that we shall not have a repetition of that.
I was fascinated by the Minister's explanation of the meaning of "household flour" in this concept. We are delighted to know that chapati will be all right. But what about oatmeal? The Minister represents the constituency of Caithness and Sutherland. How can he announce to us today that he is looking after the interests of the immigrant communities without saying a word about some of the staple and traditional fare of his constituents? This is a scandalous proposition, and I hope that it is one which the Scottish National Party, if it 1671 were represented here today—which, of course, it is not—would join me in denouncing.
The real lesson to be drawn from this pathetic little amendment is that the more the Government embroil themselves in the nonsense of food subsidies, the deeper the anomalies gather around them. We shall not stop with the subsidisation of chapati. We shall be subsidizing an endless variety—

§ Mr. Cormack
Popadams.

§ Mr. Bruce-Gardyne
As my hon. Friend says, we shall be subsidising popadams as well. What is more, 1 suppose that in order to foresee accurately the course of future price movements we shall have to have not a single soothsayer but one for each community, which should add substantially to the burden of operating this legislation.
This is an absurd amendment. However, since it is attached to what from the start has been an absurd concept in the Bill, it is no more than we can expect.

§ Mr. Cormack
I cannot add very much to what has been said so eloquently by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne). This is a bizarre Bill, and the amendment is a ridiculous piece of window-dressing which illustrates at a stroke what nonsense it is.
I warn the Minister that beacons will be lit tonight in Caithness and Sutherland if the oatcakes have not been subsidised.
The hon. Gentleman has told us with benign good humour that the Government have made a decision. He does not quite know what they have decided or when the decision will be implemented. Certainly he does not know what it will cost, any more than he knows the effect on the consumers. But the Government have made a decision, and they are reaching out to the immigrant communities.
I agree with my hon. Friend the Member for South Angus. Where do we stop? Quite legitimately, all the special-interest groups in the country whose doctors have put them on diets requiring them to eat special things will say "What about the things we have to eat? Subsidise them." This is a slippery slope. 1672 A total of £700 million is already committed under this most ridiculous of all Bills. I hope that many of my hon. Friends will join me in opposing its Third Reading. If we are to achieve the Nirvana for which the Minister seems destined, the cost will be £1,700 million before we know where we are. This is manifest nonsense. The hon. Gentleman should, as quickly as possible, give us the details of this latest piece of tomfoolery.

§ Mrs. Sally Oppenheim
I am not sure why the amendment is necessary. The Minister has announced not a subsidy but an intention. Surely Clause 1 covers the point. I hope that the Minister will not claim that this will have any significant effect on the family budget. The consumption of flour is about 5.5 oz per person per week, and average family expenditure, according to the Ministry of Agriculture Food Facts, is l.65p per person per week. If, as the Minister implied, he reduced the price of flour 3p per 3-lb bag, that would bring in for what he is fond of calling the "typical family"—something I have never met—about 1p a week.
The hon. Gentleman estimates that the expenditure will be about £10 million. I hope he will not say that this is an inexpensive measure in terms of the help that it will bring to the family budget. Considering the amendments to the Finance Bill which were refused which would have cost £8 million and brought real tax relief to pensioners on very small incomes, we are not impressed by the Government's choice of priorities. However, we do not intend to oppose the amendment because the powers are already in the Bill.

§ Mr. Maclennan
I would emphasise that the figure I gave was simply an illustration. It would be misleading if the remarks of the hon. Member for Gloucester (Mrs. Oppenheim) were taken to mean that that is what the subsidy will cost.
As to why we have made this announcement now, we have information that there is a distinct possibility of further price increases before the Bill receives Royal Assent. We therefore felt it right to take this power now. I agree that the power to add to the items which are subsidised already exists, but an order 1673 would need to be introduced. The amendment will enable us to embark upon a scheme immediately without going through that procedure.
With respect to the hon. Member for South Angus (Mr. Bruce-Gardyne), it would be possible to subsidise oatmeal under the amendment. The precise coverage will depend on the proposals that we bring forward. The types of flour concerned are a matter for discussion and we must take account of possible price trends. If the hon. Member is advocating a subsidy of oatmeal, I will listen with peculiar respect in the light of his opposition to the whole principle of subsidy throughout these debates. However, that is probably not what he is arguing.
The tone of the hon. Member for Gloucester was surprising in view of the large number of representations that we have received from her hon. Friends, other hon. Members and the public about the desirability of this step. On reflection, the hon. Lady may recognise its value.