Food Prices (Hansard, 12 June 1978)

§ 2. Mr. Durant
asked the Secretary of State for Prices and Consumer Protection what has been the increase in food prices since February 1974.

§ 8. Mr. Knox
asked the Secretary of State for Prices and Consumer Protection whether he will give the increase in food prices since March 1974.

§ The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan)
The retail food index has increased by 99.8 per cent. since February 1974 and 97.6 per cent. since March 1974. However, the latest figures show that food prices increased by only 6.3 per cent. between April 1977 and April 1978, the lowest annual rate since June 1970.

§ Mr. Durant
Will the hon. Gentleman take this matter more seriously than his right hon. Friend the Secretary of State did a few minutes ago, bearing in mind the problems of housewives and the low-paid? Is he aware that, according to the Department of Employment Gazette, 635 food prices rose by 2.8 per cent. in the first three months of this year? That is a Department of Employment figure. Is the hon. Gentleman also aware that the increase in the national insurance contribution that the Chancellor of the Exchequer is now to impose will affect the food industry badly, because it is labour-intensive?

§ Mr. Maclennan
I welcome the opportunity to set straight the record of food prices. They have shown a very marked improvement over the course of the past year. Since last July, there has been a continual steady fall in the rate of increase. At that time it was 25.2 per cent. In December it was down to 10.6 per cent., and it is now 6.3 per cent. For much of that time, the rate of increase in food prices has been below the all-items retail prices index. Indeed, for the past seven months the figure has been below the rate of increase in prices generally.

§ Mr. Buchan
Does my hon. Friend agree that, despite the improvement in food prices as compared with certain other prices, almost every consumer domestic food would be cheaper if it were not for the higher lunacies of the Common Market? Is it not gross humbug for the Conservative Party, which brought us unprotected into the Common Market and added to the problem by its stupid amendment on the green pound, should now object to the situation it has created?

§ Mr. Maclennan
We can take some encouragement from this Government's success in holding down, with increasing effect, the level of common price increase in the annual price negotiations in Brussels. In 1975, the common price increase was 9.6 per cent. In 1976, it was 7.7 per cent. This year it has been only 2 per cent.
However, my hon. Friend is right to point to the effect of the greater devaluation of the green pound than this Government thought prudent. If it had not proved possible to phase that increase, contrary to the wishes of the Conservative Party, the housewife's food bill would have been increased by no less than £80 million. By the phasing, my right hon. Friend has been able to reduce that burden substantially, to £25 million.

§ Mr. Knox
Will the Minister confirm that food prices almost doubled during 636 just over four years of Labour Government, compared with rather less than four years of Conservative Government? For the benefit of his hon. Friends below the Gangway, will he also confirm that British membership of the Common Market has been responsible for only a minute proportion of the increase in food prices during the past four years?

§ Mr. Maclennan
If the Conservative Party had taken any steps at any time to indicate support for this Government's measures to reduce the rate of food price increase, the hon. Gentleman's remarks might be treated more seriously.

§ Mr. Ioan Evans
In addition to the problem that has arisen because of the harmonisation of prices under the common agricultural policy, will my hon. Friend remind Conservative Members, when they talk about the recent measures of my right hon. Friend the Chancellor of the Exchequer, that those measures were taken because of their amendments to the Finance Bill, whereby they have given handouts to the wealthy?

§ Mr. Maclennan
My hon. Friend is entirely right. If my right hon. Friend the Chancellor had not taken the measures that he did over national insurance charges, to correct the consequences of the irresponsible Opposition treatment of the Budget, that treatment would have had serious effects on public sector borrowing and on the money supply, both of which the Opposition never lose an opportunity to remind us are important factors.

§ Mr. Alan Clark
What does the Minister think would be the effect on food prices of distributing the various mountains of foodstuffs accumulated under Common Market regulations?

§ Mr. Maclennan
My right hon. Friend has taken steps to release some beef from intervention to institutions, steps which will have a modest effect. But the level of the so-called mountains varies substantially from time to time, and it is not possible to give an exact answer to the hon. Gentleman's question.