§ Mr. Mike Thomas
asked the Secretary of State for Prices and Consumer Protection whether he plans any changes in the level of food subsidies.
§ Mr. Hattersley
I have been reviewing the level of food subsidy expenditure in the current financial year. I have decided that in order to contain spending within the provision laid down in the White Paper on Public Expenditure (Cmnd. 6393) reductions should now be made in the present rates of subsidy on butter and cheese.
With effect from Sunday 14th November 1976 the butter subsidy will be reduced from £151.20 per ton to £89.60 per ton and the subsidy on cheese from £157 per ton to £109 per ton, equivalent in retail price terms to about 3p per pound on both butter and cheese. The retail price of both butter and cheese will rise 167W in due course as a result of these changes, but the combined effect is equivalent to less than 0.3 per cent. on the food index and well under 0.1 per cent. on the retail price index.
In addition, the milk subsidy as represented by the special liquid milk allowance paid through the Milk Marketing Boards will be reduced on 1st December 1976 from 2p per pint to 1p per pint. In step with the reduction in the allowance, the rate of subsidy paid on milk produced in certain Scottish islands and in the Isles of Scilly—which is not sold through the Milk Marketing Board—will also be reduced to 1p per pint from 1st December. These changes will not, however, cause any immediate change in the retail price of milk, as the current price, together with the price increase already scheduled to take place in January, already takes account of the need to reduce the special liquid milk allowance.