§ Mr. Hooley
asked the Secretary of State for Prices and Consumer Protection how much of the increase in the retail price of tea in 1976 was accounted for by the increased price of tea in real terms at tea auctions and how much by the declining value of the £ sterling or other factors.
§ Mr. Maclennan
In the 12 months ending December 1976 the retail price of tea rose by about 5½–6½p per ¼lb. Of this, 2p per ¼lb was attributable to the removal of the consumer subsidy. Much of the remainder may be attributed to the increase in the London auction prices, which rose from about 63.1 to 101.8p per 661W kilo during 1976—i.e., from 7.2 to 11.5p per ¼lb—although fluctuations in firsthand prices do not immediately affect retail prices. London auction prices are fixed in sterling and the 61 per cent. increase during 1976 therefore includes the effect of the 20 per cent. fall in the effective exchange rate for sterling. The Retail Prices Index was 15.1 per cent. higher in December 1976 than in December 1975.