Tea Subsidy

Part of Ways and Means – in the House of Commons at 12:00 am on 19th November 1974.

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Photo of Mr Richard Wainwright Mr Richard Wainwright , Colne Valley 12:00 am, 19th November 1974

The Liberals intend to oppose the addition of a further food to the list of subsidies, as we have opposed all the subsidies consistently from the beginning of the legislation.

I will not weary the House by repeating the arguments of the hon. Member for Aylesbury (Mr. Raison), most of which I am happy to endorse. Relative to the retail price of tea, the subsidy is substantial, amounting to nearly 20 per cent. on the average retail price. Secondly, it is on a commodity which has little, if any, real food value. For other reasons it may be important to consumers but in terms of real food value there is virtually nothing in it. That makes it in some ways an even less satisfactory transaction than the earlier subsidies that have been pushed through the House.

It is the view of Liberals that the tea subsidy was chosen largely to provide an emotive rounding-off to the roll-call of subsidies which the Labour Party was able to put into its General Election manifesto. It was able to end its subsidy paragraph with tea. We all know that tea is an emotive word to many English people, if not to people throughout the British Isles.

As we have heard, the subsidy will cost in a full year £29 million. In the submission of Liberals, that could be very much more effectively spent on relieving specific ascertained needs. There is a further point which comes as ammunition to my argument from the Chancellor's Budget statement. When talking about the prices of products of nationalised industries he said: If we are to correct the large structural distortions which have affected our economy over recent years, with too much going into consumption and too little into investment and exports, it is inevitable that from time to time steps should be taken which will raise consumer prices. There is no escape from this ".—[OFFICIAL REPORT, 12th November 1974; Vol. 881, c. 279.] How can a resounding statement like that be squared with this squalid measure'? The situation is beyond my comprehension. At a time of a national crisis the existence of which nobody disputes, it is important that a Government should offer a consistent lead. How can the people take a lead from a Government who one day announce the importance of doing away with distorting subsidies and admit that there will have to be serious rises in consumer prices and who the following week come forward with a measure artificially to reduce the price of a commodity which has no real food value?

As we oppose this measure our only regret is that we are not supported by all the Opposition parties on an official basis. The consequence of the attitude which the Conservative Opposition have adopted ever since the Prices Bill has been an ever-growing number of subsidies. The Conservative Opposition said that they regretted the Prices Bill, that they did not believe in subsidies but that they would not oppose the Bill. Liberals could never understand that. If the Prices Bill had contained a once-and-for-all list of subsidies which would have represented the end of the matter we would not have gone along with it ourselves but there would have been logic in saying "This is a conclusive list of subsidies which for the time being we must accept, albeit with regret". That would have been understandable, but the Prices Bill gave the Government power to introduce an ever-growing number of subsidies. They have taken full advantage of that power throughout the summer and early autumn.

By failing to oppose the Second Reading of the Prices Bill and then by failing to oppose certain clauses in Committee, the Conservative Opposition encouraged the Government to make the fullest use of the subsidising powers that had been taken.