HC Deb 27 October 1975 vol 898 cc1021-2
20. Mr. Biffen

asked the Secretary of State for Prices and Consumer Protection what is the current annual rate of expenditure on food subsidies; and if she will make a statement.

23. Mr. Gow

asked the Secretary of State for Prices and Consumer Protection what is her latest estimate of the cost of food subsidies in each of the two years ending 5th April 1977.

Mr. Maclennan

The estimated cost of food subsidies in the current financial year is about £554 million. The cost in 1976–77 is expected to be about £400 million, in 1975 price terms.

Mr. Biffen

Is the hon. Gentleman aware that subsidies of this magnitude represent an essay in economic unreality? May we hope that the expected downturn as between the second year and the current year will indicate that these subsidies will be speedily phased out, as a contribution to the reduction in the public sector borrowing requirement?

Mr. Maclennan

I am aware of the hon. Gentleman's views, but the food subsidy programme developed last year brought quick and effective relief to the low-income families most affected by sharply rising prices.

Mr. Gow

Will the Minister rephrase the answer which he gave to my hon. Friend the Member for Oswestry (Mr. Biffen) in terms of actual pounds instead of unreal pounds? Secondly, will the Minister confirm that more than half of the total food subsidies for the current year and for the following year will be received by families in receipt of an income of more than £50 a week?

Mr. Maclennan

On the first part of the hon. Gentleman's question, that is a matter still to be calculated when the final figures are agreed with my right hon. Friend the Chancellor of the Exchequer. On the second part, I remind him that the benefit of subsidies to those with incomes of less than £20 a week is four times greater than to those earning £80 a week.

Mr. Gwilym Roberts

Will my hon. Friend assure us that there is no question of phasing out this valuable help to low income families? Will he again emphasise the point, which is deliberately neglected by the Opposition, that there is a considerable redistribution from the wealthier section of the community to the benefit of the vast majority of poorer people?

Mr. Maclennan

The future of subsidies is spelt out in the January White Paper on public expenditure as amended by the July White Paper on inflation. It is made clear that it is the Government's view that this is a most helpful means of assistance to the less well-off members of our community, for the reasons which my hon. Friend gave. My hon. Friend will also be aware that the Child Poverty Action Group has revised its view and now accepts the Government's reasons for having this policy.

Sir J. Langford-Holt

The introduction of food subsidies has formed part of the electoral programme of the Labour Party on at least one occasion. Will the hon. Gentleman assure us that the phasing out of these subsidies is either not part of the programme or was included in at least one of the electoral programmes on the last occasion?

Mr. Maclennan

It has always been made clear by my right hon. Friend that this programme was intended to bridge the difficult gap before it was possible to bring in other forms of benefit. The hon. Gentleman will be aware that substantial increases in social security benefits are in train.

Mr. Gow

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I beg to ask leave to give notice that I shall seek to raise the matter on the Adjournment.