HC Deb 17 April 1978 vol 948 cc4-6
4. Mr. Hooley

asked the Secretary of State for Prices and Consumer Protection if he will state the actual price of a standard loaf at 3rd April in each of the years 1973, 1974, 1975, 1976, 1977 and 1978 and the effect on the price to the consumer of Common Market levies on imported wheat.

The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley)

The average retail price of a 28 oz. standard loaf in mid-April in each of the years 1973 to 1977 was 10.4, 13.9, 15.6, 17.2 and 20.5 pence respectively. In mid-March 1978—the latest date for which information is available—the average price was 24.1 pence and the maximum price allowed by the Bread Prices Order was 26.5 pence. It is impossible to give a precise figure for the effect of the levy on imported wheat, but the direct effects of the levy are estimated to contribute up to 1p to the costs of the standard loaf.

Mr. Hooley

Will the Secretary of State agree that the levy is the equivalent of a tax on bread? Is he aware that we seem to be drifting back to the lunatic days of the corn laws? Is it not time that his Department held a rigorous investigation into the prices of flour and bread?

Mr. Hattersley

The price of flour and the general operation of milling in this country justify some sort of investigation, but whether this is the right moment for it is a different matter. [HON. MEMBERS: "Oh".] I hope that we shall have some questions on that subject as the afternoon goes on. As for the levy, when we entered the EEC we accepted the levy system as part of our obligations. I do not seek to justify what is happening over wheat levies, and our policy is to try to reduce them whenever possible.

Mr. Kenneth Lewis

As so many investigations have been made by the right hon. Gentleman's Department into the situation over Spillers and bread supply generally, why did he and his Department not realise that what has recently occurred was on its way months ago?

Mr. Hattersley

The Minister of Agriculture and my Department both realised that there was far too much capacity in the baking industry which sooner or later had to be reduced. In the Spillers case the reduction arose in a manner that was wholly intolerable. We must now ensure that the bread industry continues to improve in general efficiency and we must make sure that such catastrophes do not happen a second time.

Mr. William Hamilton

Will my right hon. Friend agree that the figures he has given confirm the fact that the effect of the levies on the price of bread over the years in question is minimal compared to the increases in prices consequential on world price increases?

Mr. Hattersley

My hon. Friend is right. I often say in reply to questions about price increases resulting from our membership of the EEC that they are minimal compared with other factors. But the point to be borne in mind is that they are minimal but in some cases unnecessary. When they are unnecessary, no matter how small they are, I think that we should argue against them.

Mrs. Sally Oppenheim

Will the right hon. Gentleman say how many more thousand jobs need to be lost and how many more companies need to be driven out of production as a direct result of losses exacerbated by his controls before he will concede that not only are his policies damaging to industry but that they will lead to fewer jobs, less competition and in the end higher prices?

Mr. Hattersley

I have told the hon. Lady in one month out of three in the last 18 months that the only alteration I have made in the control of bread prices is to relax the control which was applied by the Conservative Government under prices orders. I should have thought that even the hon. Lady, allowing for her well-known command of logic and reason, would accept that one could not say that price control was responsible for the disastrous and unfortunate unemployment in the baking industry when the controlled maximum price is almost 3p higher than the average price at which bread is sold.

Mr. Fell

In view of the highly unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest possible opportunity.