§ 2.37 p.m.
§ LORD STONHAM
My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government if they are aware that, in 1951, the bread subsidy was approximately £55 million, the average market price for home-grown wheat was 28s. 4d. per cwt., and the retail price of the 1¾ lb. loaf was 6d. that, currently, 3 the wheat subsidy is over £20 million, the average market price for homegrown wheat is down to 20s. 6d. per cwt., the retail price of the 1¾ lb. loaf is up to 1s. 0d.; and, since the £35 million difference in the subsidy accounts for only 2d. per loaf, who receives the extra profit of 4d. per loaf and the extra profit arising from the fall in the market price of wheat.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE)
My Lords, I fear that a comparison of the bread and flour subsidies applied in 1951, under the austere conditions of control, with the subsidies arising from cereal deficiency payments and the bread prices determined by the conditions of freedom and variety pertaining to-day, does not lend itself to even the approximate calculations which the noble Lord has attempted.
If, however, with that most important reservation, I am to attempt to follow his calculations, I might perhaps do so broadly on these lines. I understand the noble Lord to be saying that the price of the 1¾ lb. loaf has gone up since 1951 by 6d., and that he is saying that only about 2d. of this is accounted for by the difference between the 1951 subsidy on bread of £55 million and the current subsidy of £20 million on home-grown wheat; and that, therefore, about 4d. of the price increase remains unaccounted for. But, in fact, of course, the increase in the price of the loaf since 1951 is not 6d., but between 5d. and 5½d., because perhaps two-thirds of our bread which comes from the plant bakeries is sold at not more than 11d., not 1s. Moreover, of the increase of 5d. to 5½d., nearly 3d. is accounted for by the removal of the subsidy. The noble Lord's calculation allowed only 2d. for this because, so far as I can see, it did not allow for the fact that less than 30 per cent. of our home-grown wheat is used for bread. The remaining 2d. to 2½d. of the increase must be set against increases in the cost of baking in the nine years since 1951. But your Lordships will appreciate that in attempting to answer the noble Lord's Question I 4 have had to follow him in employing statistical methods, comparisons and approximations which I am advised are highly dubious.
§ LORD STONHAM
My Lords, may I be allowed to congratulate the noble Earl on a brave attempt, but one which entirely fails to answer my Question? He has mentioned the increased costs of producing and delivering bread, but has failed to mention that there has been a 30 per cent. drop in the price of wheat, which entirely discounts those increases. That means that the present cost of bread and flour is exactly the same as it was in 1951. The only other thing he said was that it is a 3½d. increase which is unaccounted for, and not a 4d. increase—but that depends on where you live. However, is the noble Earl aware that this is a serious matter affecting our greatest industry; that the nation's bread bill has increased by £100 million; that the farmer is much worse off; that the housewife is paying double—
THE LORD PRESIDENT OF THE COUNCIL AND SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME)
My Lords, this is hardly a question.
THE EARL OF HOME
But if "Is he aware" comes in the middle of a number of paragraphs, one loses sight of the question.
§ LORD AMWELL
My Lords, can the noble Earl say what has happened to the lovely, crusty loaf of my youth?
§ LORD STONHAM
If I may be allowed to continue—it was a long Answer, for which I was extremely grateful—may I ask the noble Earl if he is aware that there is extreme doubt and anxiety about this position as to whether the subsidies are doing what we want them to do—to benefit the farmer and the consumer? And would he recommend to his right honourable 5 friend that there should be an inquiry to decide exactly how these subsidies are being applied, and to what extent they benefit the farmer and the housewife?
My Lords, if I may pick out three questions to answer, I would say that I do not know what has happened to the lovely, crusty loaf, though it is sometimes still available. I am aware that, in the mind of the noble Lord who has raised this question, there is this doubt, but I do not think it is in other people's minds. With regard to his question as to whether there should be an inquiry, I do not think that any inquiry would serve any useful purpose at this time. If I may supplement what I said before, I really think that the noble Lord must try to compare like with like. It is no use trying to compare golf clubs with cricket bats. They are both used to propel balls, but under such entirely different conditions and for such entirely different effects that really a comparison serves no useful purpose.
§ LORD STONHAM
My Lords, throughout my Question I have compared precisely like with like, and except in a small detail the noble Earl was quite unable to challenge the figures. However, the point remains that 3½d. of the price of a loaf is unaccounted for. Would it be partly accounted for by the recent 50 per cent. increase in dividends paid by some of the firms? If the noble Earl does not know the answer, is it not in the public interest to have a public inquiry to find out? Because the doubts are not confined to myself; they are becoming ever larger and ever more serious.
I can only say that I do not follow the noble Lord's conclusions from the dubious figures that he has put forward. The increase since 1951 in the price of the 1¾ lb. standard loaf is of the order of 5d. to 5½d. On such information as I have the removal of the subsidy on bread and flour and the increase in costs since 1951 would also amount to between 5d. and 5½d. This disposes of the implication in the noble Lord's question that there has been a fantastic increase in bakers' profits since 1951.
§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, I think it should 6 be made perfectly clear that the Government's general economic policy has constantly increased the cost of living and put up the costs of production everywhere and kept on leading us into financial crises.
THE EARL OF WOOLTON
My Lords, I must congratulate the noble Earl, Lord Waldegrave, on the Answer he gave, because I spent a long time trying to find out what really was the basis of this Question. I should like to ask the noble Earl (since I must ask him, though really what I am trying to do is to ask the noble Lord, Lord Stonham), this question. Is it not a fact that there are quite a number of new conditions that have arisen: increases in the costs of baking and considerable increases in the costs of distribution, which were previously controlled; and of course, in earlier days, if I may use the not too flattering observations of the noble Earl, there was a rigorous control over everybody's profits? It seems to me that the noble Lord, Lord Stonham, is not really comparing like with like, because so many conditions have altered in the meantime. I do not know whether the noble Earl can legitimately regard that as a question or as a speech.
My Lords, I am very grateful for the noble Earl's intervention, to which I would answer, Yes.
§ LORD STONHAM
My Lords, I agree with the noble Earl, Lord Woolton, that there are changed circumstances, the main change being that there was control in 1951 and now there is a free-for-all, for which we are paying an extra £100 million a year. The noble Earl, Lord Waldegrave, thought fit to suggest that my figures were dubious. Could I refer him to the 1950–51 Trading Accounts, page 3, where it says:Bread, unit of subsidy, 6d. per 3½ lb. loaf"—that is 3d. for a 1¾ lb. loaf. That was the subsidy in 1951. I am now saying that the rate of subsidy is 2d. per loaf. It is not my figures that are dubious. It is the noble Earl's.
§ LORD TAYLOR
My Lords, is it not a fact that the one changed circumstance is a 30 per cent. fall in the price of 7 wheat? And is it not the contrast between this fall in the price of wheat and the rise in the price of bread which is the real source of the problem?
My Lords, with your Lordships' permission I should like to correct one thing that the noble Lord, Lord Stonham, said. I did not say that his figures were dubious. I carefully said that he was "employing statistical methods, comparisons and approximations" which are dubious.
My Lords, is not a comparison of the prices of Manitoba No. 1 and Australian hard wheat far more relevant to the price of bread than the price of British wheat, which the noble Lord opposite quoted?
§ LORD STONHAM
My Lords, the same decline has occurred in overseas hard wheats, and the position is exactly the same. The 1951 bread and flour subsidy covered flour and wheat whatever the source of origin.