§ BARONESS PLUMMERMy 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 what is their estimate of the effect on retail food prices of phasing out agricultural deficiency payments by 1974.]
EARL ST. ALDWYNMy Lords, the effect on retail prices of the Government's longer-term policy objective of reducing the cost of agricultural support by a system of import levies will depend on a number of factors, including the nature and timing of the changes and the level of market prices at the time. But the effect on food prices should not in any event be very great. The Conservative Party's policy document The Farming Future estimated that the effect would be equivalent to an extra 5 to 6 per cent. on the cost of food spread over three years; and it is considered that this gives a fair indication of the order of increase that might be involved.
§ BARONESS PLUMMERMy Lords, I thank the noble Earl for his reply. Would he accept that this estimated increase in the cost of food will be in addition to normal factors making for an increase in the cost of living; in other words, it will be entirely additional to normal factors'?
EARL ST. ALDWYNMy Lords, this increase of approximately 2 per cent, per year will be absorbed in the general increase which is occurring at the moment throughout the Food Index.
§ LORD SHINWELLMy Lords, in view of the remarkable and unexpected escalation in price levels, in spite of the promise the present Government made nearly a year ago to keep prices down, what is going to happen if we are stupid enough to enter the Common Market and there has to be an additional increase? Why not tell the electors of this country, before the coming by-elections that are likely to take place within the next week, the truth about what is going to happen, so that they know what is in store for us?
EARL ST. ALDWYNMy Lords, I do not think there is any basis for the noble Lord's suggestion. The new system of agricultural support is an integral part of the Government's agricultural policy, whether or not we go into the Common Market.
§ LORD SHEPHERDMy Lords, may I ask the noble Earl a serious question? Has he recently looked at his housekeeping bills? Is he himself not aware that there has already been a sharp rise in the cost of food—basic foods—perhaps in anticipation of the Government's policy? Also, is the noble Earl not aware that his right honourable friend the Minister of Agriculture said tin other day that the country must expect a sharp increase in the price of commodities as a consequence of the Government's decisions relating to entry into the Common Market?
EARL ST. ALDWYNMy Lords, I accept that there has been an increase in the price of food. In fact the next Question standing in the name of the noble Baroness, Lady Plummer, deals with that specific point; so perhaps when we get to that Question we might enlarge on the subject.
§ BARONESS PLUMMERMy Lords, before we come to my second Question may I ask whether the Government accept that spending on food constitutes an abnormally high percentage of the total expenditure of retirement pensioners, and that the Government's policy is therefore one of particular concern to that section of the community?
EARL ST.ALDWYNMy Lords, I fully accept that the percentage of the categories of people to which the noble Baroness has referred is higher than that of other categories of the public, but that is why the Government have announced recent increases in pensions and allowances generally, and they will of course keep this matter constantly under review as time goes on
§ LORD SHINWELLMy Lords, do I understand the noble Earl to say that even if we fail to enter the Common Market the adjustments in connection with the agricultural policy will increase prices? Does he say that, irrespective of whether or not we go into the Common Market, prices will increase?
EARL ST. ALDWYNMy Lords, what I said was that we shall continue with the system of moving over to import levies whether we go into the Common Market or not.
§ LORD LINDGRENMy Lords, the noble Earl referred just now to recent increases for old age pensioners. There has been no recent increase. There are increases due in the future, but before that time arrives, in September, they are likely to be already swallowed up.
EARL ST. ALDWYNMy Lords, I dc, not think I can accept that last remark, and as I have said, the question will be under constant review by the Government.
§ LORD SHACKLETONMy Lords can the noble Earl explain what he meant by saying that he cannot accept my noble friend's remark? He has just been given a fact, that old age pensions have not gone up. Does he say that they have gone up?