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Food Subsidies

Volume 891: debated on Monday 28 April 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.


asked the Secretary of State for Prices and Consumer Protection what is her latest estimate of the total cost of food subsidies for the financial year ending 5th April 1976.

Is it the case that more than half of that £550 million will go in the current year to families with an income of more than £50 a week? Secondly, does the right hon. Lady agree with the Chancellor's policy of reducing food subsidies by £150 million next year? If she does, why can the reduction be right next year but not right this year?

On the second part of that question, the hon. Gentleman will recall that as long ago as the Prices Act 1974 I made it clear that the food subsidy was a response to the high level of raw material food costs which we were facing at the time. For evidence of that statement, I refer the hon. Member to Hansard, 10th February 1975, col. 24–25. As for his perpetual view that the subsidies largely benefit the better off, recent research has indicated, taking into account the expenditure on food as a proportion of household budgets and the expenditure on subsidised foods within the amounts spent on food overall, that the broad benefit to families with under £20 a week income is nearly four times as great proportionately as to families with incomes of £80 or over.

Would my right hon. Friend agree that, as we have moved forward from the cheap food policy that we have had under successive Governments since the end of the war to the dear food policy that we might have to pursue as a member of the EEC, food subsidies have kept prices down, that housewives in Britain can buy German butter far cheaper than it can be bought in Germany and that a housewife in Northern Ireland can buy Kerrygold butter cheaper than it can be bought in Southern Ireland? Have not food subsidies helped a great deal, transitionally at any rate, to keep down prices?

I welcome my hon. Friend's support for the food subsidy policy. I hope he will take heart from the fact that, judging from the most recent statement by the Commissioner for Agriculture, M. Lardinois, it appears that we are beginning to persuade the Community of the benefits of a food subsidy policy. Perhaps the Opposition will notice that already it seems that, if we remain in the Community, it will adopt the system of food subsidies, as I hope it will.

Despite the fact that she seems to be taking heart, is the Secretary of State aware that the difference in the increase in food prices under the Conservative administration and under the present Government is startling, even allowing for transport costs and the other factors that she quoted? During the last three months under this Government food prices have risen by 10 per cent. In our last three months they rose by 5 per cent. This is a basis of comparison which both the Secretary of State and the Minister of State are fond of using. Taking the comparison on a six-monthly basis, under this Government food prices have risen by 17 per cent. compared with 11 per cent. under the previous Conservative Government. Is it not therefore nonsense to claim any noticeable significance for food subsidies?

It all depends what months one chooses. I was not going to pursue this question, but if I were asked to do so I would point out that, on the basis of a three-months average, the highest increase in food prices that we have ever had was in the period immediately at the time that the last administration left office.

On a point or order. I beg to give notice that, in view of the right hon. Lady's unsatisfactory reply, I shall seek to raise the matter as soon as possible on the Adjournment.