Prices

Oral Answers to Questions — Agriculture, Fisheries and Food – in the House of Commons at 12:00 am on 19 December 1972.

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Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw 12:00, 19 December 1972

asked the Minister of Agriculture, Fisheries and Food what is the latest percentage increase in the price of food since June 1970.

Photo of Dennis Skinner Dennis Skinner , Bolsover

asked the Minister of Agriculture, Fisheries and Food what has been the increase in food prices since June 1970.

Photo of Mr Raymond Carter Mr Raymond Carter , Birmingham, Northfield

asked the Minister of Agriculture, Fisheries and Food what is the increase in the cost of food since 18th June 1970.

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

Between 16th June 1970 and 14th November 1972, the latest date for which information is available, the food index rose by 23·1 per cent.

Photo of Mr Joe Ashton Mr Joe Ashton , Bassetlaw

Is the Minister aware that that is 3 per cent. more than in the answer he gave in the middle of November? Is he aware that his predecessor used to blame the pay increases of farm workers and shop assistants and that he himself blamed world prices? What is his latest excuse for the increase now that we have had a freeze?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

It is not a question of excuses. In any case it is not a 3 per cent. rise. The hon. Gentleman has his figures wrong. I said last month that it was 172·8. It is now 174·3. That is a rise of 1·1 per cent. over this period.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

Is it not a fact that in recent weeks there has been plenty of evidence that retail prices of food are beginning to stabilise themselves?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

I am grateful to my hon. Friend. That is certainly true regarding manufactured food. However, world shortage has caused a substantial rise in the price of fresh foods.

Photo of Mr Thomas Peart Mr Thomas Peart , Workington

Is the Minister aware that the Prime Minister gave a specific promise about this matter at the last General Election? The simple fact is that the Government's prices policy has failed.

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

I do not accept that. As the right hon. Gentleman well knows, the main cause of the present rise in prices of fresh food is the world shortage of meat—particularly beef—and the very large purchases of cereals which Russia and other countries have been making.

Photo of Mr Peter Hardy Mr Peter Hardy , Rother Valley

asked the Minister of Agriculture, Fisheries and Food what increase in food prices has occurred during the last two months; which six foodstuffs showed the greatest increase in this period; and what was the extent of the increase in each of the six cases.

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

As the answer contains a number of figures I will, with permission, circulate the information in the OFFICIAL REPORT.

Photo of Mr Peter Hardy Mr Peter Hardy , Rother Valley

While those figures will show that the situation in recent weeks has been bad enough, does the right hon. Gentleman agree that there is much worse to come?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

I do not accept that the information is "bad enough", to use the hon. Gentleman's phrase. The latest information is that manufactured food prices are much steadier; they are relatively stationary at present. But the figures I have given relate to the position up to 14th November, a period which covers only one week of the standstill. Therefore, the figures I shall be circulating show the facts before the Government standstill order came into effect.

Photo of Sir Sydney Chapman Sir Sydney Chapman , Birmingham Handsworth

How do the costs of the foods we normally associate with the festive season compare with those a year ago, on average?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

The indication is that there is an ample supply of turkeys, and prices on average should not require to be higher than they were this time last year.

Following is the information:Between 19th September and 14th November, the latest date for which information is available, the food index rose by 1·1 per cent. The following table, which is based on the average retail price of about 80 important items of food as collected for the purposes of the Index of Retail Food Prices, lists the six foodstuffs which showed the greatest percentage increase in this period and the extent of the increase in each case:
ItemPercentage Increase in Average PriceIncrease in Average Price*
Medium eggs, per doz.14·62·3
Dessert apples13·71·7
Standard eggs, per doz.10·41·9
Cod fillets9·93·2
Cooking apples9·40·8
Home-killed pork: leg (foot off)7·72·6
*In p per lb. unless otherwise stated.

Mr. R. C. Mitchell:

asked the Minister of Agriculture, Fisheries and Food how many complaints of food price increases since 6th November have been received; how many of these complaints have been investigated; and in how many cases action has been taken to remove the increases.

Photo of Mr Leslie Huckfield Mr Leslie Huckfield , Nuneaton

asked the Minister of Agriculture, Fisheries and Food how many telephone calls he has now received about food price increases.

Photo of Mr Jack Dormand Mr Jack Dormand , Easington

asked the Minister of Agriculture, Fisheries and Food what is the current number of staff involved in dealing with food price increases.

Photo of Mr John Grant Mr John Grant , Islington East

asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the working of the machinery for monitoring food price increases; and if he will make a statement.

Photo of Gavin Strang Gavin Strang , Edinburgh East

asked the Minister of Agriculture, Fisheries and Food how many price increases have been the subject of complaints to his Department; and how many of such increases have been rescinded as a result of the intervention of his officials.

Photo of Mrs Peggy Fenner Mrs Peggy Fenner , Rochester and Chatham

The Food Prices Units have received 5,703 telephony calls about price increases. All these calls are being followed up and 3,151 cases are currently being investigated. Investigation is complete in 2,311 cases, and all the 128 higher prices which were inconsistent with the standstill have been reduced. My right hon. Friend is satisfied with the working of the monitoring arrangements. Thirty-six officers in the Ministry are directly concerned with the monitoring of, and applications for, food price increases.

Mr. Mitchell:

Is the hon. Lady aware that since 6th November there have been substantial price increases in almost every shop in every town throughout the country? Does not that mean that the so-called price freeze is a complete and utter farce?

Photo of Mrs Peggy Fenner Mrs Peggy Fenner , Rochester and Chatham

No, Sir, this is not so. As my right hon. Friend has already said, the prices of manufactured foods, which represent over half the commodities bought by the housewife each week, are subject to the standstill. We recognise that there have been increases in prices of fresh food, because of external factors beyond our control and seasonal fluctuations.

Photo of Gavin Strang Gavin Strang , Edinburgh East

Will the Minister confirm that the answer she has given makes absolutely clear, if it was not clear before, that this so-called elaborate prices mechanism is totally irrelevant in the context of current food prices and that less than 5 per cent. of the 2,000 prices have been reduced significantly? Is it not the case that farm gate cereal and beef prices are shooting up and that none of the Government's measures can stop them or prevent the increases being passed on to the consumer?

Photo of Mrs Peggy Fenner Mrs Peggy Fenner , Rochester and Chatham

As my right hon. Friend has already said, increases in beef and cereal prices are caused by world shortages. We made clear that there were difficulties about containing prices of fresh food, which was exactly the position which faced the Labour Government when they introduced their prices and incomes policy.

Photo of Mr Richard Body Mr Richard Body , Holland with Boston

Can my hon. Friend confirm that the Department has asked a large number of retailers and co-operative societies to sign a voluntary declaration and that they are keeping to the terms of that declaration? Will she emphasise, if that is the case, that it is a voluntary declaration and, moreover, will she give an undertaking that the Government will not seek statutory powers to enforce it?

Photo of Mrs Peggy Fenner Mrs Peggy Fenner , Rochester and Chatham

I can confirm that large retail organisations are showing evidence of their adherence to the standstill by presentation of their cash margins.

Photo of Mr Don Concannon Mr Don Concannon , Mansfield

What is the Minister doing about the practice of changing the packaging of commodities in order to introduce a price increase? An example can be found in pats of butter that used to be 2p each and now, after a change in the packaging, are selling for 3p. The Minister has only to look in at the Members' tea room to confirm what I am saying.

Photo of Mrs Peggy Fenner Mrs Peggy Fenner , Rochester and Chatham

The Government have said that any reduction in quantity could be regarded as the same as a price increase.

Mr. Edward Taylor:

Will my hon. Friend accept that one of the principal complaints has been about the removal of reductions on recommended prices for certain prepackaged food such as Nescafe and so on? Will she remind the general public that if a price reduction was given before the standstill, it should continue?

Photo of Mrs Peggy Fenner Mrs Peggy Fenner , Rochester and Chatham

Yes, I confirm what my hon. Friend has said.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

Is it not the case that only one in 20 of the cases reported to the Department led to any control being exercised over the price, leaving the other 19 uncontrolled and not dealt with? Is it not quite impossible for the shopper to do the job which the Minister should be doing? He still allows manufacturers to use misleading labels such as "6p off" and "2p off". It cannot be left to the shopper to take action over this matter. Action must be taken by the Government.

Photo of Mrs Peggy Fenner Mrs Peggy Fenner , Rochester and Chatham

The issue of "6p off" offers has been clarified. We have said that promotional offers which return to their recognised price must be balanced by promotional offers throughout the shop so that the customer receives the same value as before.

Photo of Mr Patrick Duffy Mr Patrick Duffy , Sheffield, Attercliffe

asked the Minister of Agriculture, Fisheries and Food if he is satisfied with the operation to date of the standstill on prices since 6th November; and if he will make a statement.

Photo of Mr Hugh Dykes Mr Hugh Dykes , Harrow East

asked the Minister of Agriculture, Fisheries and Food what is his estimate for the movement in retail food prices between 6th November and 6th December 1972.

Photo of Mr Michael Grylls Mr Michael Grylls , Chertsey

asked the Minister of Agriculture, Fisheries and Food if he will make a statement on the effect of the prices freeze on the Index of Retail Food Prices.

Photo of Sir Sydney Chapman Sir Sydney Chapman , Birmingham Handsworth

asked the Minister of Agriculture, Fisheries and Food by how much food prices have risen or fallen since 6th November; and in which main categories movements have taken place.

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

The food index figures for mid-December are not yet available but it is clear that the standstill has been fully effective with manufactured food and drink products. With the exception of certain lines of sausages, fresh meat pies and one line of biscuits for which I have approved limited price increases, the changes which have occurred in this sector have been generally due to the introduction or ending of special promotional offers, the broad value of which the trade has undertaken to maintain.

In the case of certain fresh and imported foodstuffs there have been unavoidable price increases for some items as a result of seasonal or external factors. Meat has risen in price but most fresh fruit—notably dessert apples—are cheaper.

Photo of Mr Patrick Duffy Mr Patrick Duffy , Sheffield, Attercliffe

Is the right hon. Gentleman aware that at the outset of the standstill the Prime Minister pledged what he called the deployment of the sanction of public opinion? Will he tell the House, first, how many breaches there have been of the prices standstill; secondly, how many companies have had their prices reduced as a result of discussion with him: and thirdly, when will the Prices Unit reveal the names of the products and the companies involved? Otherwise, how does he hope to get consumer co-operation?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

We have publicised the fact that certain companies—

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

—had put up prices. We have published the names.

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

Those companies have reduced them in conformity with the instructions we have given. The number is strictly limited because there have been very few breaches of the standstill arrangement in manufactured food prices. The manufactured food industry has a good record here and the operation of the standstill has been most effective in this sector.

Photo of Mr Michael Grylls Mr Michael Grylls , Chertsey

Is it not a fact that the housewife has benefited considerably from the Government's firm action taken on 6th November to restrain prices?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

The impact of the standstill on prices in the manufactured food area has been extremely successful. It is on the fresh food side that the facts are somewhat different, but that is due to matters outside our control.

Photo of Mr Raymond Carter Mr Raymond Carter , Birmingham, Northfield

Is the Minister aware that during the standstill we have seen the arrival of the prophecy made by the Prime Minister during the 1970 election campaign, namely, the 3s. loaf? Will the Minister now be equally honest with the House and the country and say that, with our entry into the Common Market, the Government's policy is likely to see the arrival in the last half of their period of office of the 4s. loaf—at the very least?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

No. That is a gross exaggeration. The world supply position of bread grains at the moment is certainly one which gives cause for concern, but that is not a matter which comes under the control of the British Government but is the result of an extremely low harvest in Russia which led to buying on a large scale by that country. Prices in relation to grain have risen, but the price of bread has been maintained since the start of the standstill.

Photo of Sir Sydney Chapman Sir Sydney Chapman , Birmingham Handsworth

If it is also a fact that the prices standstill policy for foods which are very much under the control of the Government has been successful, will my right hon. Friend confirm that the relatively small increase there has been on the average in prices since 6th November has been due entirely to world factors outside the control of any United Kingdom Government?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

Yes, that is the point I have been making, that it is the massive world shortage both of meat and of grain which has led to these rises in prices, but on the manufactured foods side the record has been very good and prices have been maintained at the level of 6th November.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

Are we to take it that the permanent excuse of the Government is Reds under the bread?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

No, it is not a question of excuses or of Reds under the bread or anything of that kind. It is simply, as I said on the last occasion when we discussed these matters, that had the party opposite when in power stimulated more food production, housewives would be in a much better position today.

Photo of Mr Jimmy Hamilton Mr Jimmy Hamilton , Bothwell

asked the Minister of Agriculture, Fisheries and Food how much he now expects foodstuffs to change in price by April, 1973.

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

I do not think it helpful or appropriate to speculate about future movements in food prices.

Photo of Mr Jimmy Hamilton Mr Jimmy Hamilton , Bothwell

Is the right hon. Gentleman aware that that is the sort of answer we expect from him and that housewives do not believe anything his Government tell them? Is he aware that the Grocer price index for fresh foods since the standstill shows an increase of 5·4 per cent. and a freeze-busting increase in the price of processed foods? Is he aware that the TUC is so deeply concerned about it that it is to ask for a meeting with the Prime Minister because it is firmly convinced that it is a wages freeze and a wages freeze only?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

That is totally inaccurate. Prices have increased, as I have indicated, by 1·1 per cent. in regard to the change over the last month for which figures are available. That is the exact figure which has been given and it is correct. In manufactured goods there has been practically no increase since 6th November— only in the limited range to which I have referred. In fresh foods there have been increases for the reasons I have stated.

Mr. Edward Taylor:

Will my right hon. Friend recall that April will be the time when VAT will be introduced, and as this will mean that the amount of tax on food will be substantially reduced because of the abolition of SET and exemption of food, will he ensure that the housewife will get the advantage of this cut in taxation?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

Yes, I confirm that what my hon. Friend has said is right. The total tax on food in this country will be substantially less with the introduction of VAT. The changeover from purchase tax to a 10 per cent. VAT will result in a saving of about £30 million a year on food items which are at present subject to tax. In addition, the removal of SET on food distribution, currently yielding about £25 million a year, will still further ease the burden of tax on food, and we expect that the food industry will pass on these benefits to the consumer.

Photo of Mr Thomas Peart Mr Thomas Peart , Workington

In reply to the Question the right hon. Gentleman said we should not speculate about prices. Is he not aware that his colleague, his boss, the Prime Minister, actually did speculate on prices and said that he would reduce them and control them? Why have they failed?

Photo of Mr Joseph Godber Mr Joseph Godber , Grantham

My right hon. Friend has explained many times the point he was making in the period to which the right hon. Gentleman is referring, but he has never, nor has any other member of the Government, attempted to forecast the precise level of food prices in future. There is no intention by the Government to do so.