§ Mr. Ioan Evans
asked the Secretary of State for Prices and Consumer Protection if she will make a statement about the proposed increase in bread prices and the future of the bread subsidy.325W
§ Mrs. Shirley Williams
Following notifications to the Price Commission, the major baking companies are proposing to make price increases in Great Britain of ½p on both large and small loaves with effect from 9th August, mainly because of increases in the cost of flour, which in turn are due to the rise in wheat prices. On certain premium loaves some companies will be able to charge an extra 1p instead of ½p.
As action must be taken to contain total food subsidy expenditure within the provision for the current financial year, in line with the policy decisions announced last year, it is also necessary to reduce the bread subsidy throughout the United Kingdom. The rate will accordingly be reduced from £4.06 to £2.98 per sack of flour with effect from 8th August. This reduction is the equivalent of .p on both large and small loaves. The total price increase on each size will therefore be in general ½p in Great Britain and ½p in Northern Ireland. The effect of the reduction in the subsidy is estimated to be a saving of £10 million to £11 million in the current financial year.
Standard bread is included in the Price Check Scheme for Great Britain. The baking companies have carried out their undertaking to keep their price increases within 5 per cent. overall for the six months from 1st February to 31st July, and I am grateful for their co-operation. I realise that because of the nature of the product bread price changes pass through very rapidly to retailers' shelves, whereas for other products there is normally some delay. The increases I have described will therefore be reflected in shop prices a few days before the scheme ends in the shops on 15th August.
My Department will be carrying out the normal consultations and an order will accordingly be laid before the House so that the statutory maximum prices can be raised by the necessary amounts from 9th August.