Orders of the Day — Milk (Price Increase)

Part of the debate – in the House of Commons at 12:00 am on 24th July 1956.

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Photo of Mr Frederick Willey Mr Frederick Willey , Sunderland North 12:00 am, 24th July 1956

I beg to move, That an humble Address be presented to Her Majesty, praying that the Milk (Great Britain) (Amendment) Order, 1956 (S.I., 1956, No. 920), dated 13th June, 1956, a copy of which was laid before this House on 18th June, be annulled. If it will not inconvenience hon. Members from Northern Ireland, I suggest we might also consider at the same time the following Prayer: That an humble Address be presented to Her Majesty, praying that the Milk (Northern Ireland) (Amendment) Order, 1956 (S.I., 1956, No. 921), dated 13th June, 1956, a copy of which was laid before this House on 18th June, be annulled. Then, if necessary, each Prayer could be divided upon.

I am sorry to see the Joint Parliamentary Secretary about to reply. He knows as well as I do that this is a matter the responsibility for which falls upon the shoulders of the Treasury Ministers; for that reason, and because I feel rather kindly disposed towards the hon. Gentleman, I will speak with some moderation, restraint and brevity. I realise, as he too realises, I am sure, that he did not do very well when we last discussed a Prayer of this kind, and I do not want him to lose his Parliamentary reputation for the sins of the Treasury.

This Order deals with the price of full price fresh milk; it increases the retail price and reduces the subsidy. I say at once, so that there shall be no apprehension in any quarter of the House which might otherwise be caused, that the farmer, as I am sure the Joint Parliamentary Secretary concedes, obtains no benefit at all from this price increase. It is a straightforward reduction of subsidy.

This full price milk was sold under the Labour Government at 5½d. a pint, at the time we went out of office, and, as this Order now reveals, it is now being sold at 7½d. a pint. This represents the latest of a series of retail prices increases. I want to say a word or two about the arguments which have been previously deployed by the present Postmaster-General in support of these price increases. Originally, when we had the first retail price increase, the Postmaster-General argued, and vehemently argued, that it would not lead to a decrease in consumption. On the contrary, he said, there would be an increase in consumption, and he expressed the view that he would be very unhappy indeed if the price increase should lead to a decrease in production.

I mention that because at that time, this being early in the Parliamentary career of the right hon. Gentleman, he enjoyed a reputation as being knowledgeable on matters of nutrition. He indicated at that time that the consumption of fresh milk had not, in his view, by any means reached the optimum level.

The Postmaster-General became extremely melancholy and unhappy, because it was very soon revealed that there was in fact quite a sharp reduction in the consumption of milk. He then argued, when we had a subsequent price increase, that although there was a decrease in consumption owing to the price increase, the decrease was purely trivial. But, as the figures revealed that his margin of error was between 600 and 700 per cent., that argument was soon abandoned. I am dealing only with the major arguments upon which he relied. He then reverted to a third argument, saying that, after all, people spent twice as much money upon beer as upon milk, and obviously, to drink more milk, they should drink less beer. I do not know whether the Joint Parliamentary Secretary intends to rely upon that argument tonight, but if he is I should ask him in fairness whether he has had full and proper consultation with the brewers. He knows as well as I do that his party has a particular dependence upon the brewers. As we pointed out in earlier debates—if the Parliamentary Secretary has not refreshed his recollection—by and large the people whom we wish to encourage to drink more milk would not be well advised to drink beer.

Having failed to convince the House upon that argument the Postmaster-General then relied upon a fourth argument. He said, "Well, I concede that there has been a decrease in the consumption of milk; I concede that I am most unhappy and melancholy. Having upset the brewers, I no longer rely upon this as being a disincentive to beer consumption. My argument now is that this reduction in the consumption of milk has been borne by the higher income groups." That was absolute nonsense.

I am glad to see that the Postmaster-General has decided to join us in this discussion, because he will remember that the only intervention made by the Parliamentary Secretary was upon this point. When I was ridiculing the Postmaster-General, he intervened to say: Quite right."—[OFFICIAL REPORT. 24th June, 1953; Vol. 516, c. 2055.] He owes an explanation to the House. I do not know whether he meant that my ridicule was quite right or that the subject matter of my ridicule was quite right, but whatever the purpose of his intervention it is quite clear now that that argument is absolutely fallacious, because the Milk Marketing Board has provided us with some most interesting research, mainly into the consumption of milk in the nine towns.

That has shown quite conclusively that the fall in the consumption of milk has been in the lower income groups, and particularly in the lower income groups with large families. In other words, although we have a far larger consumption of milk—even now under a Tory Government—than we had pre-war, it still remains a fact, as I am sure the Parliamentary Secretary will concede if he has read the report, that poor people with large families do not by any means consume sufficient milk.

To summarise our experience under a past Conservative Administration, their price policy led to a reversal of the trend which we enjoyed under the Labour Government. Whereas we had had an increasing consumption of fresh milk, this trend was reversed, quite deliberately, under a Conservative Government, and we can see now, because the figures are available, that as a result of the price increases of the first Conservative Government the consumption of fresh milk fell by between 3 and 4 per cent.

The interesting feature is—and this is the primary cause of the present Order—that during the early months of this year it appeared quite clear that the decline had been arrested. Although there was very limited evidence, it appeared that there was a slight increase in the consumption of milk. That was the position as it appeared at the beginning of the year. For that reason I said at once, without regard or particular consideration to the economic crisis that was brewing, that there would shortly be an increase in the retail price of milk.

That anticipation, unfortunately, has proved correct. I do not think that the Order is in any special way related to the problem of keeping our trade balance on an even keel. It is because the Government had noticed that it appeared that the consumption of milk snowed signs of recovering from its decline, and of increasing. I say this to the credit of the Chancellor of the Exchequer. Unlike the Postmaster-General, and, recognising the evidence that was now readily available to all of us, he made no bones about it. He said that one of the purposes of this increase in the retail price was to discourage consumption. In fact, if we look to the other documents published by the Government, it is clear that it is their policy to discourage increased milk consumption and that they look for some reduction in consumption.

Our main quarrel with this price increase is that it seeks no particular effect. I think that the words of the Chancellor were that it would have no appreciable effect, but in seeking this limited effect of reducing consumption, which we deplore, the Government will drastically reduce consumption where we ought to be advocating and encouraging increased consumption.

This overall relatively small decrease in consumption will be borne largely by poor people with large families, as the report of the Milk Marketing Board shows. After all, we have shown to the House in previous debates that what the researches of the Milk Marketing Board have revealed had already been revealed by reports which we had received from large co-operative societies. So we say that the purpose of the Government is deplorable, but that its effect in this particular instance is especially deplorable, and is directed against people with limited means who have large families.

I concede to the Chancellor that he has put his case fairly. The second argument put by the Chancellor is that this is a further operation of Boyle's law, that this will lead to a general reduction in overall purchasing power. That is why I invited the Joint Parliamentary Secretary to say whether this Order was directed especially against the brewers, because it is directed against somebody. Perhaps we shall hear when the hon. Gentleman replies to the debate.

In its application this is equally unfair because it is generally regressive, but again it is particularly directed against the people with low incomes and especially those people with large families. Those are the people who will find that if they are to continue their present level of consumption, which is inadequate according to the evidence before us, they will go short of other things.

Now I want to say a general word about subsidies. The subsidy was there until 1st July, so in effect this change is a tax, and a poll tax upon everyone. I want to remind the Joint Parliamentary Secretary of the previous debates and discussions which we have had about food subsidies. Probably he himself has argued, certainly many of his hon. and right hon. Friends have argued, that the food subsidies were not a social service—