§ Mr. Ogdenasked the Minister of Agriculture, Fisheries and Food whether he is now able to make a statement on his discussions with the millers and bakers about bread and flour prices.
§ Mr. PeartThe net cost of wheat, and particularly of imported wheat, has risen significantly in the past six months. For this reason, millers applied last August under the terms of the White Paper on the Prices and Incomes Standstill (Cmnd. 3073) for increases in the prices of bakers' flour and similar flours which necessarily contain a high percentage of216W imported wheat. The Government scrutinised these proposals very carefully and I have had detailed discussions with the leading firms in the industry. These firms have agreed, despite the increased costs which they have been and are absorbing, to defer any increase in price until 31st December, 1966, the end of the standstill period, and the Government appreciate the spirit of co-operation which has made this possible.
The Government are satisfied that under the terms of the White Paper (Cmnd. 3073) it would not be justifiable or practicable for the industry to go on absorbing all the increased costs after that date and that a rise in the price of flour, and consequently of bread, is then inevitable. In reaching this conclusion the Government have taken into account the financial position of the industry and the effect on overall profitability of the absorption of increased costs. They have therefore agreed that the price of bakers' flour may be increased by not more than 8s. per sack on 1st January, 1967. After taking into account this and other baking costs within the terms of the prices and incomes policy, the Government have also agreed that the price of bread may be increased by not more than 1d. per large loaf and ½d. per small loaf from 16th January, 1967. By that date the price of bread will have been kept unchanged for a full 12 months and in the meantime the industry has absorbed considerable costs.
Discussions between the Government and the baking industry are continuing on the reference to investment in paragraph 69 of Report No. 17 of the National Board for Prices and Incomes on Wages in the Baking Industry, and its application.
The leading millers and bakers have assured the Government that, barring unforeseen contingencies, they do not intend to propose further increases in the price of bread or flour before 30th June, 1967.