HC Deb 10 February 1975 vol 886 cc6-8
10. Mrs. Millie Miller

asked the Secretary of State for Prices and Consumer Protection if she will take steps to ensure that the Price Commission takes into account the increased profits of the sugar industry in determining the price of sugar to the housewife.

9. Mrs. Wise

asked the Secretary of State for Prices and Consumer Protection if she will ask the Price Commission to take into account the increased profits of the sugar industry when considering retail sugar prices.

Mr. Alan Williams

This happens already. The net profit margins of the sugar refiners on their operations in the United Kingdom, though not their overseas operations, are limited by the Price Code in the same way as those of other enterprises. They are always taken into account by the Price Commission when an increase in the price of sugar is notified. Both the cane-refining companies have recently reported substantially reduced profits on their United Kingdom refining interests.

Mrs. Miller

Will my hon Friend bear in mind that, although home profits have reduced because of the sugar shortage last year, the advertisement of the record profits that Mr. Cube made last year list those who benefit as including the Government, the economy, investors and the industry's employees and partners? Bearing in mind the level of these profits, would not it be a good idea if the consumers benefited also?

Mr. Alan Williams

I understand my hen. Friend's reaction to the advertisement. Frankly, I thought that in the present context, whatever its managerial justification, it lacked a certain sensitivity. But we must be fair and make it clear that the sugar refiners have co-operated fully with the Government during this period of shortage and have been very careful not to exploit the situation.

Mr. Giles Shaw

Is the hon. Gentleman aware that, when the Minister of Agriculture, Fisheries and Food made his statement on his return from Brussels, he said that there would be no retail price rise as a result of his sugar agreement? Is he aware, further, that the 48 per cent. of raw sugar which is used in food manufacturing and drinks will find its way into retail prices, and can he indicate what will be the rise in the food index as a result of the sugar agreement?

Mr. Alan Williams

The ultimate price of sugar will depend on the mix of sources of supply and the balance of supply between the various sources. Until we have a clearer picture of the proportions in which the sugar will come from the different sources, it is impossible to predict whether the price will be stable or variable.

Mr. Jim Spicer

Can the hon. Gentleman add a little to what he said about the price factor on sugar? The Minister of Agriculture said that there would be an equalising factor coming in from the sugar purchased through the EEC and subsidised by the EEC. What will that be in terms of a price saving to the housewife on a 2-lb bag?

Mr. Alan Williams

It is not possible to quantify in that way. The equalisation scheme is operating at the moment because sugar is obtained from different sources at widely differing prices. To avoid vast increases in price on shop shelves, with the co-operation of the industry we introduced the equalisation scheme. The exact level at which the equalisation figure pitches depends on the ultimate proportions of supplies from the different suppliers.