HC Deb 02 May 1977 vol 931 cc12-4
9. Mr. Durant

asked the Secretary of State for Prices and Consumer Protection by how much food prices have risen since February 1974.

Mr. Hattersley

The food index rose by 84.8 per cent. between February 1974 and March 1977.

Mr. Durant

Is the Minister aware that that is a pretty appalling figure? Is he further aware that in recent months the prices of basic foods, such as bread and cheese, have risen frighteningly for the housewife? Is he further aware that the housewife has no confidence that his Price Commission Bill will do any good whatsoever? Why do not the Government be honest and say that they have failed to control inflation?

Mr. Hattersley

The hon. Gentleman's question has three parts. Certainly some food prices have increased extraordinarily over the past year—coffee by 190 per cent, and tea by 120 per cent., for example. Those increases have contributed to the index and are wholly outside the Government's control.

Other food prices have not increased so much, including bread, on which the position has been pretty settled over the past three months. I do not believe for a moment that the British public are opposed to a system of selective price freezes. It is the Conservative Party that is opposed to price freezes on a selective or any other basis, and I have no doubt that the British public support what the Government did last Wednesday.

Mr. John Evans

My hon. Friends were delighted to read my right hon. Friend's weekend speech about the need for reform of the common agricultural policy. Will he accept that many of us who deal weekly with our European counterparts in the European Assembly recognise that they will not allow us to change the common agricultural policy in any way? Will he also accept that if there is to be any structural reform or any marginal reform it is essential that Consumer Protection Ministers sit as of right with the Common Market Agriculture Ministers when they make their annual price reviews?

Mr. Hattersley

I disagree with my hon. Friend about the prospects of changing the CAP; I think that some marginal adjustments have already been made. Certainly, some holes have been punched in what were once the sacrosanct principles of the CAP. That has been done in the lifetime of this Government.

As far as consumer protection is concerned, I hope that I shall attend an Agriculture Council, as my predecessor did on one occasion. My hon. Friend will recall, however, that the Minister of Agriculture is also the Minister of Food. I think that no one in the House doubts that over the last month he has represented the interests of consumers as well as those of the producers, and we should congratulate him on that.

Sir David Renton

Is the right hon. Gentleman aware that, although there is room for some improvement in the CAP, the very large increase in food prices that he has announced this afternoon has been due almost entirely to the devaluation of the pound and the internal inflation of this country? Will he restrain his hon. Friends who criticise the CAP and tell them that our food prices are not due to that cause?

Mr. Hattersley

Not only am I aware of that fact, but I stated it before the right hon. and learned Gentleman arrived.

Mr. Heffer

Would not my right hon. Friend agree that the devaluation of the pound is very much influenced by our membership of the Common Market? Would he not also agree that ill manners can be matched by a certain amount of arrogance, and that in that respect pro-Marketeers should look in the face those of us who have been against the Common Market and accept that they have been totally wrong and that we have been right?

Mr. Skinner

Austin Mitchell knew which card to play.

Mr. Hattersley

I hope that "Sayings of the Week" will include my hon. Friend's assertion that arrogance is wrong, followed by the assertion that he is right and everybody else is wrong. I have never claimed that the common agricultural policy is anything but bizarre—the word I used on Saturday. I agree with my hon. Friend that had we not been in the Common Market the problems of sterling that we encountered in September and October would have been different. In my view, they would have been very much worse. The run on the pound that we endured in the autumn of 1976 would have been infinitely greater had we not been supported by the powers of the EEC, under articles contained in the Treaty of Rome, that would have come to our aid in extremis.

Mr. Sainsbury

Will the Secretary of State agree that the price increases for tea and coffee to which he referred are indicative of what can happen to the price of an internationally-traded commodity when a surplus becomes a comparative shortage, largely because of increased consumption in the countries of origin? Is that not also indicative that a policy which is designed to increase and encourage European farm production is in the long run likely to be in the consumer's interest?

Mr. Hattersley

The hon. Gentleman ought to draw a distinction between the policy, which the Government certainly promote, of increasing domestic farm production—food from our own resources—and the EEC policy of encouraging overproduction. I find it difficult to justify a prices policy that is meant to produce more of a commodity which has already been produced in such quantity that it cannot be sold.