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Food Prices

Volume 886: debated on Monday 10 February 1975

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15.

asked the Secretary of State for Prices and Consumer Protection whether, further to the answer on 27th November 1974 [col. 190], she is able to give examples in terms of items bought by the average housewife of the specific saving involved in the costs of cereals, beef, butter and sugar as a result of British Membership of the EEC.

30.

asked the Secretary of State for Prices and Consumer Protection whether she can now give examples, in terms of items bought by the average housewife, of the specific saving in the cost of cereals, beef, butter and sugar as a result of British membership of the EEC.

The Under-Secretary of State for Prices and Consumer Protection
(Mr. Robert Maclennan)

The commodities mentioned benefit from EEC measures such as monetary compensatory amounts on imports and Community-financed subsidies. As a number of qualifications have to be made about the calculation, I will, with permission, circulate the information in the Official Report.

Is the Minister aware of the forecast made at the recent World Food Conference, by the Secretary-General of the United Nations and by the Food and Agriculture Organisation, of a continuing shortage of world food? If those forecasts are justified, does not this mean that there will be continuing advantages to us both in terms of supply and in terms of price from membership of the Community?

My right hon. Friends have made plain that changes in the pattern of production and demand in the world market make it more important for us to be self-sufficient in the production of food.

Is my hon. Friend aware that Britain's entry into the Common Market has affected most of our Commonwealth markets? Will he give his mind to the increased prices which have resulted from our leaving the Commonwealth market and joining the EEC?

We are aware of that. My hon. Friend will also be aware that New Zealand has not been able to make full provision for our cheese requirements which we negotiated with the EEC, and that some of our difficulties with sugar stem from the attractiveness of the world market to the African, Caribbean and Pacific countries.

Will not the hon. Gentleman assure his hon. Friend the Member for St. Helens (Mr. Spriggs) that our problem with sugar and other commodities in recent months has often been the inability of our former Commonwealth suppliers to supply us, and that we should have been in a very poor position if sugar had not been made available to us under the Lardinois plan?

Following is the information:

Possible United Kingdom consumer benefits on certain foodstuffs from monetary compensatory amounts on imports and from community financed subsidies during the week 3rd-9th February 1975.

1. Bread

  • (a) MCAs are paid on imports of wheat from the EEC and third countries (mainly USA and Canada) and are currently worth £6·93 per ton. Assuming that the UK bread grist is now about 55 per cent. imported wheat the mca subsidy is equivalent to about 0·3 per large loaf (28 ounces).
  • (b) Until recently, levies on EEC wheat exports to third countries have meant that the UK was able to import EEC wheat cheaper than if she were outside the EEC Export levies are not at this point in time being charged and so no consumer benefit is now assumed.
  • 2. Beef

  • (a) A social beef subsidy is now payable to virtually all pensioners in the form of a token, worth 20p a week, which can be redeemed for beef and veal. The precise value of this subsidy in terms of beef prices therefore depends upon the quality and quantity of beef purchased.
  • (b) MCAs are now payable on imports from the EEC and on imports under the GATT levy free quota. The amount varies considerably according to the form in which it is imported. But for imports of fresh or chilled carcase beef (and other bone-in cuts), which is a typical form of imports at present, the mca amounts to f125·02 per ton or about 5p per lb on imported beef only. It would be misleading to spread this benefit over all beef sold in the shops, including home produced.
  • 3. Butter

  • (a) The general consumer subsidy on butter is paid in part by FEOGA, and this portion is worth £25·33 per ton, equivalent to about 1p per lb.
  • (b) The mca which is paid on imports is now worth between f8885 per ton (80 per cent. fat) and 01·08 per ton (82 per cent. fat) This is equivalent to about 4p per lb.
  • 4. Sugar

  • (a) The United Kingdom is benefiting from an EEC scheme to import sugar from world markets with the aid of a FEOGA subsidy. In the first tranche of 200,000 metric tons of raw sugar the United Kingdom is expected to receive 155,500 metric tons, and the subsidy on this to average £224·9 per ton (white). This is equivalent to a saving of about 20p per 2 lb bag on just over 3 weeks' total United Kingdom supplies. Total EEC imports of a further 300,000 metric tons have been agreed in princple, but tenders have not yet been accepted by the EEC and therefore the benefits cannot be assessed.
  • (b) MCAs are payable on our imports from EEC countries. These now amount to £18·78 per ton for raw sugar and £22·14 per ton for white sugar. This subsidy is equivalent to about 2p per 2 lb bag.
  • 25.

    asked the Secretary of State for Prices and Consumer Protection if she will list the items of food which are cheaper outside the EEC than inside.

    I would refer the hon. Member to the reply given by my right hon. Friend the Secretary of State for Trade on 23rd January 1975 to my right hon. Friend the Member for Battersea, North (Mr. Jay).—[Vol. 884, c. 484]

    Is it not true that since then grain prices have dropped and are dropping seriously? May we have the hon. Gentleman's views on that matter?

    I congratulate the hon. Gentleman on his keen sense of timing in getting here to ask his Question.

    I am surprised that the hon. Gentleman does not think he has been deciding it. He should also take into account in his estimate monetary compensatory amounts.

    In terms of food prices has any calculation been made of whether we would be better off outside or inside the Common Market?

    I refer my hon. Friend to the earlier reply to which I referred because it gives a considerable amount of detail on the breakdown of prices. He will, however, appreciate that prices vary considerably according to quality and grading and harvest factors.

    I understand the dangers of doing what is proposed and the difficulties of timing, but is it the Government's intention, nearer the time of the referendum, to give the public any information about prices inside and outside the Common Market?

    I should have thought that the Government's intention was to give the maximum possible information so that the discussions and deliberations could be as well informed as possible.