HC Deb 11 November 1974 vol 881 cc3-6
2. Mr. Tebbit

asked the Secretary of State for Prices and Consumer Protection if she is satisfied that the resources available to her Department are sufficient to protect the consumer against rising prices.

Mrs. Shirley Williams

I have never claimed that a single Department, or even Government, can wholly stem world inflation. Action already taken by my Department includes the food subsidy programme, the strengthening of the Price Code, a voluntary agreement with retail organisations and action against restrictive agreements in the service industries.

Mr. Tebbit

Without prejudging whether tomorrow's statement will constitute a strengthening of the Price Code, would not the right hon. Lady agree that, as she has no power at all over the prices of coal, steel, fares—particularly the GLC's exorbitant increases which are approaching—or over the rapacious demands of spendthrift Labour authorities, all of which are prices borne by the consumer, she really should perhaps quietly retire?

Mrs. Williams

The hon. Gentleman will be aware that the Price Code bites upon nationalised industry's prices. He also should be aware that the ludicrous policy which his own Government followed in respect of nationalised industry prices is one of the major reasons for the problems which the present Government face in that sector.

Mr. Emery

Can the right hon. Lady make clear exactly how much she intends to have spent on food subsidies by the end of this financial year? Does she think that that is adequate? How much more would she like?

Mrs. Williams

If the hon. Gentleman will allow me to await the appropriate Question on the Order Paper, I think that that would only be polite to the hon. Gentleman who has put down the Question.

18. Mr. Hurd

asked the Secretary of State for Prices and Consumer Protection by how much food prices rose in the United Kingdom between January 1973 and October 1974; and what proportion of this rise was attributable to British membership of the European Economic Community.

Mrs. Shirley Williams

The further we get from the date of entry into the Community, the harder it is to calculate what food prices would have been if we had stayed out. The food price index rose by 29.2 per cent. between January 1973 and September 1974. Official estimates now show that food prices are, on balance very slightly lower than they would have been were we not members of the Community.

Mr. Hurd

I thank the right hon. Lady for that significant reply. Could she estimate roughly what the effect would be on the price of bread and cereal products generally if we kicked ourselves out of the Community and had to pay the world price for all our imports?

Mrs. Williams

The price of wheat for bread in the Community is about one-third lower than in the world generally, though the hon. Gentleman will appreciate two points about that. One is that monetary compensatory amounts are payable now as a result of the last Agriculture Ministers' meeting on imports into this country, which rather distorts the price comparison. Second, he will be aware that the one is soft wheat, the continental wheat, and the other is hard wheat and, therefore, a direct comparison cannot be made. But, broadly speaking, it is true that cereals are now less expensive within the Community than outside it.

Mr. Rost

What will happen to food prices in this country if the Government do not soon do something to stop the slump in food production?

Mrs. Williams

This Government have already made substantial efforts to stop the slump in food production. The hon. Gentleman must be aware that one of the most crucial elements in this matter was the withdrawal of the guarantee by the Minister of Agriculture in the last Conservative administration.

19. Mr. Thorne

asked the Secretary of State for Prices and Consumer Protection whether she will establish a freeze on prices of essential goods, particularly food and household goods, backed by law; and, if so, when and for what period this may apply.

The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan)

No, Sir. Costs have risen sharply in the past year—for example, imported food by 17 per cent. A freeze in these circumstances would lead only to serious shortages in the shops and to bankruptcies and would put jobs at risk.

Mr. Thorne

Does my hon. Friend agree that the highly mystical social contract will hardly become a reality on the basis of that sort of approach to the question of prices? Does he not further agree that if prices are to remain free, wages also must remain free?

Mr. Maclennan

My hon. Friend must know that there is no question of prices remaining free. The Price Code operates effectively to control prices. The three months' delay which the Government have already introduced in their first review of that code has had an effect in stabilising prices. With regard to my hon. Friend's remarks about the social contract, he must be aware that the Government are playing their part to make the social contract effective.

Mr. Silvester

Is not the hon. Gentleman a little concerned that his hon. Friend should relate the fulfilment of the social contract to a freeze which he himself admits would be quite impracticable?

Mr. Maclennan

I am never concerned about remarks made by my hon. Friend, whose advice is welcome.