§ Mr. Derek Pageasked the Minister of Agriculture, Fisheries and Food what proposals he has received for changes in bread prices; and whether he will make a statement.
§ Mr. Cledwyn HughesThe major plant bakers recently put forward proposals under the early warning arrangements for immediate price increases of 2d. on large loaves and 1d. on small loaves. Since the last changes in bread prices which took place in February and March, 1969, there have been substantial increases in bakers' costs of production and distribution and others are shortly to take effect. The bakers have also pointed out that their return on capital has seriously declined, is at an un-economic level, and is below that recommended by the National Board for Prices and Incomes in 1967 as necessary to encourage the modernisation of bakery plant; and their proposals were therefore designed not only to cover their cost increases but also to improve their overall financial position.
After careful examination, the Government are satisfied that an increase of 1d. on all loaves would be justified in terms of the prices policy and that this may be implemented from 5th January, 1970. In the Government's view, however, the proposals for a further 1d. on large loaves raise questions which call for examination by the National Board for Prices and Incomes and they propose to make an urgent reference accordingly. Pending the outcome of the board's examination, the bakers have given me an assurance that they will limit any increases in bread prices to those now agreed.
The bakers have also proposed a new system for reviewing bread prices in future which they consider would avoid some of the difficulties which have arisen under the present arrangements. The Government consider that this matter, 426W too, should be examined by the board, and the reference will therefore also cover this point.
The prices charged by smaller independent bakers vary over a wide range according to size, quality, type and individual circumstances. These bakers, too, have been facing increased costs which they will need to recover, but their representatives have assured me that any price increases they have to make will be fully consistent with the Government's prices policy.