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Distribution Costs

Volume 462: debated on Thursday 3 March 1949

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asked the Minister of Fuel and Power if he will state in detail the increased distribution costs on coal which have necessitated the increase of 11d. per ton in the selling price; what are the margins of profit allowed to the wholesaler and the retailer; and what will be added to these margins by the increase of 11d. per ton in the selling price.

The costs of the retail distribution of coal and coke are ascertained by a periodical review made by my Department from returns supplied by a representative cross-section of the trade. Adjustments in retail prices, where these are necessary, are based on the results. The latest review completed last year showed that the costs of distribution had increased, mainly due to increases in wages and transport costs. In the London area the merchants' average profit margin on retail sales had fallen to 2d. per ton and the recent increases of 11d. per ton in the price of coal and 1s. per ton in the price of boiler fuel are designed to bring the profit margin enjoyed by the average retailer up to 1s. a ton on retail sales of coal, boiler fuel and coke taken as a whole. The margin of profit of the wholesaler varies according to the service he renders and is not affected by these price increases.

While I should like to study that answer in HANSARD and follow it up subsequently, I should also like to ask the Minister whether it is not the case that the policy of the Government is to ask private enterprise and other organisations to reduce prices; and, if that is so, why in this case do the Government themselves deliberately announce an increase of price at a time when they also want wages to be frozen?

The hon. Gentleman's party is busily engaged in a campaign to increase wages. Increased wages are reflected in the prices of articles to the consumer.

Would it not be possible to avoid these increases by making a cut in the compensation to the former coal owners?