§ Mr. Hardyasked the Secretary of State for Prices and Consumer Protection whether it is her intention to introduce a consumer subsidy on tea.
§ Mrs. Shirley WilliamsI have today laid before Parliament an order made under Section 1(2)(b) of the Prices Act 1974 which will enable me to make subsidy payments on tea. The order, which is subject to the affirmative resolution procedure, will come into operation on 1st September, and it is my intention to introduce a subsidy shortly after that date at a rate equivalent to 2p per ¼lb. packet at the retail level. The more expensive 276W speciality teas will not be eligible for the subsidy.
I understand from the tea trade that, subject to the Price Commission's consideration of the necessary notifications, certain price increases will be implemented within the next few weeks. It is expected that the subsidy will be sufficient to offset those increases and in addition to reduce prices below their present levels.
I shall be making a Tea Prices Order in due course under Section 2 of the Prices Act fixing maximum retail prices for certain teas and stabilising distributors' cash margins on the subsidised teas at levels which reflect the effect of the subsidy.
The cost of this subsidy in 1974–75 is estimated at about £15 million. Estimates will be laid before the House in due course, and in the meantime it will be necessary to have recourse to the Contingencies Fund.