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Profits, Investment And Prices

Volume 888: debated on Monday 17 March 1975

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asked the Secretary of State for Prices and Consumer Protection by what amounts the Price Code has restrained corporate profits, investment, and the retail price index, respectively.

No reliable estimates are available. Many factors in addition to the Price Code influence prices, profits and investment.

Is the Secretary of State aware that although reliable estimates may not be available for the factors referred to in the Question there is no doubt that the bureaucracy of the Price Code presents a very onerous burden for business? Will she therefore indicate that it will continue to be her policy to relax the code with, one hopes, the prospect of an early termination?

I believe that the Price Commission does everything in its power to meet legitimate points that firms make about the administrative burden. The Price Code was provided with certain relief in order to encourage investment and employment, and that will always be the first and guiding principle of the Government towards the code.

Does my right hon. Friend not agree that the Price Code and food subsidies, much derided by the Opposition, have made some marginal impact in reducing price increases? Does she not conclude, from the many Questions tabled on this subject by Conservative Members, that the Opposition seem to have a vested interest in inflation?

The Price Code was originally introduced by the Conservative Government, presumably because they believed it would have a considerable effect on inflation. I believe that the Price Code and subsidies together have averted a substantial element in containing the inflationary curve.

The previous Conservative Government introduced the Price Code but they also introduced measures on wage restraint. Under present circumstances is rot industry's problem of passing on labour costs one of the main reasons for its lack of profitability?

Under the previous administration there were thresholds which affected some firms, not least those not a mile away from the hon. Member. Where there have been increases in labour costs this fact has been reflected to some extent in the productivity deduction.