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SECRET
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C.P.. (51), 126 no basmonaÀ
DESIV (16)
7th May, 195 ho boomuoma
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Copy No.31
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GIGA
2004
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4.2.6
RETAIL FOOD PRICES
MEMORANDUM BY THE CHANCELLOR OF THE EXCHEQUER AND MINISTER OF FOOD
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At their meeting on 19th March the Cabinet asked us, in the light of their discussions, to review the proposed increases in retail food prices, and in particular to consider whether there should not be a greater increase in the price of meat instead of a second increase of 4d. in the price of tea (C.M. (51) 21st Conclusions, Minute 3).
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2. On further consideration, we did not feel able to recommend an increase in the meat price beyond 3d. a lb. for the following reasons to griber zar to samos A further increase of 1d. a lb., giving an estimated saving of £13.6 million in: 1951-52, would change an over-all subsidy on meat into an estimated profit. This would be undesirable, especially in view of the heavy continuing subsidy on bacon. Moreover, an increase of 3d. a lb. does not cover the full extra cost which consumers will have to bear: the further premium of 2d. a lb. on chilled meat to reflect the quality differential over frozen meat is likely also to be regarded by the public as a price increase.
3. For administrative reasons it would have been necessary to announce the increases for sugar and fats on or before 25th April if these increases were to be effective from 20th May. The announcement of these increases close together would, in our view, have been disadvantageous. We decided, therefore, to postpone the introduction of the sugar increase until 15th July, the beginning of the next eight-week ration period. The announcement of this increase will therefore be made some time in June. We arranged to announce the increase for fats on 25th April, as previously envisaged. The milk increase will be announced some time in June, to take effect from 1st July.
4. At the Cabinet meeting on 19th March it was assumed that the meat increase would be announced as part of the announcement of an agreement with Argentina and that it would be put into effect as soon as practicable after the date of announcement. At the meeting on 9th April, however, it was agreed that the possibility should be explored of linking the price increase with an increase in the ration (C.M. (51) 25th Conclusions, Minute 1). We decided that the opportunity (which the sudden conclusion of an agreement with the Argentine provided) for linking the higher retail price with the higher prices paid to the Argentine must not be missed, but that we could still make the introduction of the higher retail prices coincide with an increase in the ration. Accordingly, in announcing the agreement with the Argentine, the Minister of Food said that the higher prices payable to the Argentine, taken together with the higher prices payable to home farmers, would mean increasing retail meat prices by an average of 3d. a ib. and that details would be announced later. This announcement was in general enough terms to leave open the date at which the higher retail prices will be introduced. This will be decided by the Minister of Food in the light of the supply position as it develops, with the intention of linking the effective announcement of higher prices with the announce- ment of increased ration.
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