Milk (Price) (Hansard, 25 May 1979)

§ Mr. Peter Walker

Increases in milk prices are required under a system established by the previous Government in 1977. The Government then decided to set the distributive margin—the gap between the retail price and the wholesale price—at a level which reimburses the dairy trade for the expected average costs of processing and distributing liquid milk in the forthcoming six-month period, together with any adjustments to take account of variations in costs from those expected in earlier periods. The processing and distributing costs are based upon independent costing investigations. The last review should have taken place on 1 April but was deferred. The delay in making this review results in a steeper rise being necessary now than would have been the case if the decision had been taken at the customary time.

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The Government have reviewed the increases that are now needed in the maximum wholesale and retail prices for liquid milk by the established methods. The increases required are very much affected by wage settlements made in the first four months of this year.

The result of this review is that the maximum retail price for liquid milk will now have to be increased by 1½p per pint so that the price of ordinary pasteurised milk will be 15p per pint. These increases will take place in England, Wales and Northern Ireland on 3 June and in Scotland on 15 July. The increase is what is necessary to meet the additional calculated costs whilst maintaining returns to milk producers at acceptable levels.

In order to reflect the lower costs of summer milk production, maximum wholesale prices will be reduced on 1 June to the following levels:

	p per litre
England and Wales (except London)	12.943
London	12.747
Scotland	12.891
Northern Ireland (except Belfast)	11.349
Belfast	11.258

Orders to give effect to the new maximum prices will be laid before Parliament as soon as possible.