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Oral Answers To Questions

Volume 888: debated on Monday 17 March 1975

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Prices And Consumer Protection



asked the Secretary of State for Prices and Consumer Protection if she is now satisfied that the practice of repricing foods or goods on shelves is ended.

The Minister of State, Department of Prices and Consumer Protection
(Mr. Alan Williams)

Judging by the dramatic reduction in the number of complaints received, it seems that the Price Code Provisions on this practice are generally being observed well.

Is my hon. Friend aware that this is not the case all over the country? I have here a bacon pack which contained half a pound of Sainsbury's bacon and which shows that the price was increased from the 40p stamped on the packet to 44p stamped on the ticket stuck over the old price. If I let my hon. Friend have the details will he look into the matter?

I shall be glad to do so. That is a task that the Price Commission undertakes. In most cases it has been found to be due to sheer inadvertence, and firms have been only too happy to rectify the matter when it has been drawn to their attention. If my hon. Friend will let me have the pack I shall have the matter looked into.

Profits, Investment And Prices


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.

National Consumer Council


asked the Secretary of State for Prices and Consumer Protection whether she expects to announce further appointments to the National Consumer Council.


asked the Secretary of State for Prices and Consumer Protection if she is now able to announce appointments to the National Consumer Council; and if she will make a statement.

I hope shortly to be able to make a further announcement about membership of the council.

Is there not some considerable delay on this, and is the Secretary of State having difficulty finding people who are suitable to appoint?

No, quite the opposite. However, we are committed to consulting about 10 consumer organisations for a start. We have asked them to put up several names each to us and that is necessarily not the most rapid of processes.

Will my right hon. Friend look favourably at the budget for this council so that if we are to have real consumer protection it will not be held up through lack of resources.

:We started with a central budget of £300,000, but the nationalised industries consumer consultative councils, which will be coming under the financial Vote of my Department, have access to a good deal more than that, and we hope that it will be possible to do work in this field more broadly.

Will my right hon. Friend give an assurance that there will be a proper balance between the sexes on the council and that it will have a good representation of ordinary working-class people?

I would regard a proper balance as a not exact balance in this case because I believe that there is perhaps even more interest in this subject among women than among men. My hon. Friend's second point is very much in my mind and I should welcome names from hon. Members as well as from the consumer organisations, not least those of people with direct experience of bringing up families on small incomes.

Will the Secretary of State confirm that there will be no purely political appointments to the council?

I cannot confirm that, but it has long been the tradition in this House that if a Government make an appointment of someone of a political character they tend to balance that appointment.

Retail Price Index


asked the Secretary of State for Prices and Consumer Protection what has been the increase in the retail price index over the past 12 months.


asked the Secretary of State for Prices and Consumer Protection what is the current rate of price increases based on the last three months of the retail price index expressed at an annual rate.

The retail price index rose 19·9 per cent. between January 1974 and January 1975. The increase over the three months to January expressed at an annual rate was 25·9 per cent. which reflects the exceptional increases in sugar and petrol which took place in December and January.

Does the right hon. Lady not agree that price increases of the order of 20 per cent. over the first 12 months of the Labour Government is indeed a grave state of affairs, particularly when inflation in most industrial nations is beginning to fall?

I would be completely foolish if I did not regard this level of inflation as unacceptably high. The hon. Gentleman should consider why it is that his party continually opposes the efforts we make to modify the rate of inflation. I hope he will accept from me that the rate of food index inflation is less now than it was about a year ago, largely because of the food subsidies, which the Conservative Party continually attacks.

If, as seems likely, the February figures, to be published on Friday, show that the annual rate of inflation on a three-months' basis is approaching 30 per cent. to what will the Minister attribute this major achievement of Labour's first year of office?

If I were to answer hypothetical questions like that, and, for that matter, if I were to reach a conclusion on the annual figure for inflation from the figures the hon. Member has put forward, I would be a very foolish person and not fit to stand at this Box.

Is the right hon. Lady aware that the rate of inflation during 1974 and for some time to come must be due to the mismanagement of the national finances under the previous Government?

I think that I should leave the right hon. Gentleman's comments to be referred to by his hon. Friends—

Will the right hon. Member give me the opportunity to reply? He will know that there has been a reduction in the increase in the M3 money supply rate, which is now over half what it was under that previous administration.

When does the right hon. Lady expect the rate of inflation to begin to decline, or is that a hypothetical question as well?

It is obviously a hypothetical question, because it depends, among other things, on the level of commodity prices and on imports. The hon. Gentleman will know that one of the most unwise things anyone can do is to make forecasts based on what he thinks will happen to world commodity prices, because those forecasts are mainly falsified in the event.



asked the Secretary of State for Prices and Consumer Protection what arrangements there are in her Department for evaluating trends in inflation.

The Under-Secretary of State for Prices and Consumer Protection
(Mr. Robert Maclennan)

My Department is closely involved with other Whitehall Departments in evaluating trends in inflation both in this country and overseas.

Is the hon. Gentleman aware that in the third Sitting of Standing Committee B dealing with the Prices Bill figures were given which implied an inflation rate of 12½ per cent.? Will the hon. Gentleman now revise that figure? If not, will be improve the techniques in his Department for forecasting the trend of inflation?

The figures of retail price indices are compiled by the Department of my right hon. Friend the Secretary of State for Employment. Any questions about their accuracy should be addressed to that Department.

We are all greatly concerned about the inflationary situation, but does my hon. Friend accept that one hopeful sign is that for the first time there are indications that the special retail price index constructed for pensioners and similar groups is now moving less severely than the general index?

There is a later Question on the Order Paper about this matter. Generally speaking, I accept what my hon. Friend says.

As the increase in the cost of living over the past 12 months since the Government came into power has almost doubled, as this is the highest rate of increase ever recorded, and as it is continuing to accelerate at a catastrophic rate, may I ask the right hon. Lady whether she will tell the House what she and the Government intend to do about it?

The hon. Lady does not seem to be aware that I am answering this Question. Had she wished to make that point, which arose out of the previous Question, she could have put it then to my right hon. Friend.

Contraceptive Sheaths


asked the Secretary of State for Prices and Consumer Protection if she will take action following the report of the Monopolies Mergers Commission that in 1974 a British manufacturing firm sold on the home market 842,000 gross of contraceptive sheaths at a profit on sales of 43 per cent.

The commission's figure of 43 per cent. for profit on home sales related to the year ending 31st March 1973. I announced on 6th February the action I intended to take and at my request the Office of Fair Trading is in touch with the manufacturer concerned with a view to obtaining undertakings to reduce prices as the commission recommended.

Does my hon. Friend realise that since 10th February when he announced that the Director-General of Fair Trading was being asked to do something, about 80,000 gross of these things have been sold, presumably at a profit of 43 per cent.? How long is this concession to be allowed to this company?

There are certain statutory procedures which have to be completed before we can bring forward an order under the Fair Trading Act. I am deeply conscious of the point that my hon. Friend makes. I am sure he will be glad to know that there is to be a meeting with the company concerned and the Office of Fair Trading at the end of this week.



asked the Secretary of State for Prices and Consumer Protection when she expects to introduce further orders covering services under present consumer protection legislation.

A draft order extending the restrictive practices legislation to commercial services will be laid before Parliament as soon as possible. Provisions of the Consumer Credit Act will cover services and my right hon. Friend hopes to make orders later this year.

I thank my hon. Friend for that reply. Does he recall the correspondence with my constituent, Mr. John Haynes, and the Nuneaton Coach Operators' Association, which, having tried the Warwickshire County Council, the Department of the Environment, my hon. Friend's Department and the Office of Fair Trading, came to the conclusion that the order to which my hon. Friend refers was the only way in which they can get some action? Is he aware that the sooner this order is introduced the more grateful my constituents will be?

If they are grateful they can be grateful to my hon. friend for the fact that he has campaigned for this and has consistently drawn it to the attention of the relevant authorities. I certainly hope that the order will deal with the type of case to which he refers.

Will the hon. Gentleman tell us whether the order he intends to implement will cover a special investigation into motor repairs, which seem to be rocketing in price? Is he aware that sometimes service is not being given to those who are paying out vast amounts for repairs?

This order relates to restrictive practices. If there are restrictive practices leading to the situation to which the Lady refers, perhaps she will draw them to my attention.

Food Values (Consultant)


asked the Secretary of State for Prices and Consumer Protection whether she will make a statement on the nature of the work of her Department's consultant on food values.

Miss Louise Davies has been appointed for six months on an experimental basis to provide regular public information about what foods are currently plentiful and offer good value, how to judge quality, and how these foods may be used to the best advantage.

Will the Minister first make it clear beyond peradventure that he was not referring to my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies)? Has the Minister noticed the comments of the Housewives Trust, which feels that this expenditure is a waste of money? Does he not agree that this is rather a strange area for the Government to operate in?

I remind the hon. Gentleman of his own words in introducing the Weights and Measures (Unit Pricing) Bill of 1973 when he said:

"The housewife today, with the inflation that is ever in our minds, is more than ever needful of every possible assistance in obtaining value for money, in making a sensible choice, and in being able to spend her weekly budget to look after her family as best she can." [Official Report, 4th July 1973; c. 4–5.]
We have borne the strictures of the hon. Member in mind in making this appointment.

Trading Stamps


asked the Secretary of State for Prices and Consumer Protection how many representations on trading stamps she has received during 1975.

Has my hon. Friend had drawn to his attention the practice of some garages which announce that trading stamps will be provided in respect of petrol purchases and at the same time say that petrol may be bought by means of a credit card? Is he aware that if a credit card is used no trading stamps are given? Does not this practice come close to a violation of consumer protection legislation? Will my hon. Friend at least consider suggesting that if no stamps are to be made available when payment is made by credit card this fact should be made clear outside the filling station?

I appreciate the hon. Gentleman's point. I believe that firms should draw this matter to the attention of motorists, since there is an increasing tendency for people to want to pay by credit card. I can understand the attitude of the garage, because it is having to pay a discount to the credit card firm. I shall consider the point. Garages should indicate that there is no such concession when cards are used.

Will the Minister consider the problem which arises when garages do not say how many stamps per gallon are to be given? Is he aware that very often garages say "quadruple stamps", but there is no base from which to work?

If the hon. Lady feels that there is considerable abuse here, and if she has information about it, I shall be pleased to receive it. It is a general practice to say "quadruple" or "fivefold", and so on. Generally, motorists seem to have an appreciation of what is involved. If the hon. Lady has a specific case in mind she should bring it to my attention.

Instead of my hon. Friend wasting his time checking up on stamps, does he not think it would be a good idea to ban these wretched things altogether and reduce the price to the consumer?

I know that some people share my hon. Friend's views. There are others who like the stamps. Many housewives perfer them. I do not see why, when there is reasonable choice available, we should impose one particular system on the consumer, when he or she can exercise that choice at will.

Bakers (Profit Margins)


asked the Secretary of State for Prices and Consumer Protection if she will review the operation of margin control for bakers.

The only controls over bakers' margins are those contained in the general provisions of the Price Code. This has recently been reviewed, and a number of amendments were made which should be of special benefit to the baking industry.

Is the hon. Gentleman aware that the relaxations to which he refers do not include recovering past increases in costs? Is he further aware that the operation of the back marker system is such that many bakeries throughout the country are being driven out of business? Finally, is he aware that the Secretary of State gave a firm assurance exactly a year ago that the whole system would be reviewed? When may we expect the review to be announced?

The whole system is being reviewed at present.

With regard to the back marker principle, it is a recognised feature of the bread market that none of the major firms can move its prices very much out of line with another, particularly on the large standard loaf. Since the subsidy has been injected to offset price increases which would otherwise have taken place, it has naturally reflected this pattern of pricing. Just as in the market, therefore, the firm with the lowest justifiable price increase in Price Code terms sets the pace.

Does the hon. Gentleman agree that the baking industry's problem is not the definition which he has quoted but the fact that it made substantial losses in 1974 and forecasts for the current year very inadequate profits? What does the hon. Gentleman propose to do to help the baking industry in these difficult times?

The hon. Gentleman should be aware that the losses to which he has referred were incurred under the Conservative Government's stage 3 policy and that since then we have made three important modifications of the code which I believe will help—indeed, they are helping—the industry to attain profitability. We have improved safeguards for profit margins. We have given a choice of base dates where margins were eroded during stage 1 of the Conservative Government's counter-inflation programme and have reduced the normal productivity deduction from 50 per cent. to 20 per cent.

Solicitors And Estate Agents (Charges)


asked the Secretary of State for Prices and Consumer Protection if she will take steps designed to protect the purchasers and vendors of houses against the charges made by solicitors and estate agents.

I am considering whether there is a need for further action in this field.

Will my hon. Friend say how soon he will come to a decision? Is it not the case that the work undertaken by solicitors and estate agents could be done quite competently by an intelligent clerk in a local office? Will he undertake to examine again the possibility of putting all sales and purchases of houses on the market in the hands of the new local authorities?

Many complex questions are involved here, including the question of the safety of the client's money, as well as the conveyancing work. However, I shall look at the points my hon. Friend has made today. We in the Department are at the moment working on the question of the position of estate agents and solicitors.

Has the hon. Gentleman had a chance to look at the organisation chaired by Lord George-Brown? Would he give it his blessing?

I shall consider whether or not to bless the organisation. However, we are having to review the question of the most appropriate way of dealing with these transactions. There is no simple answer, because very large sums of money are involved, and in some cases very detailed technical problems must be coped with.

Before allowing the local authorities to take over these functions, will my hon. Friend encourage the Government to give time to the very useful—indeed excellent—Ten-Minute Bill introduced by my hon. Friend the Member for Ipswich (Mr. Weetch), which is designed to protect the house purchaser from the monopolistic depredations of solicitors?

My hon. Friend the Member for Ipswich (Mr. Weetch) brought a deputation to see me about these matters, and we have discussed them in some detail.

Although we are full of admiration for Lord George-Brown, is it right for the Minister to undertake either to grant his blessing to his noble Friend or withhold it from him? Perhaps I should declare my interest, as I am a solicitor.

I suspect that it will not much matter to the noble Lord whether I bless him or not.

Will the hon. Gentleman say whether his Department is considering bringing the advertisement of houses and descriptions in estate agents' brochures within the Trade Descriptions Act?

I am actively examining the question of amending the Trade Descriptions Act in this context.

European Economic Community


asked the Secretary of State for Prices and Consumer Protection what is her latest estimate of the effects for the British consumer of EEC membership in the field of food prices.


asked the Secretary of State for Prices and Consumer Protection what is her latest estimate of the effects for the British consumer of EEC membership in the field of food prices and continuity of supply.


asked the Secretary of State for Prices and Consumer Protection what effect British membership of the EEC has had on food prices in the UK since 1st January 1973 to the latest available date.

Following the decisions of the last Council of Agricultural Ministers and the transitional steps taken so far, the overall level of food prices in the United Kingdom is not at present significantly affected one way or the other by our membership of the European Community. Continuity of supply is obviously advantageous in avoiding shortages and wide fluctuations in price, though it cannot be accurately quantified.

When the right hon. Lady launches her campaign for our continued membership of the European Economic Community, will she spell out the advantages and the prices of food items which are cheaper, the continuity of supply and stability of prices, so that she can counteract some of the misleading proposals which her other Cabinet colleagues will be putting to the country?

The hon. Gentleman will recognise that my responsibility to the House is to give the most accurate factual answer I can. In the light of that, I would point out that I have said before in the House that we benefit from the EEC subsidies on sugar, that we still benefit to some extent from the monetary compensatory amounts on cereals, but that we do not benefit from the higher prices of dairy products on the Continent. Taking a balance of all these things, it is almost impossible to estimate whether there is a tiny net gain or a tiny net deficit on the total figures.

Would it not be better if my right hon. Friend were to leave answering these questions to her two very competent ministerial colleagues and whipped back to Downing Street quam celerine?

I am not sure that my Latin is as good as my hon. Friend's, but I can assure him that it is not necessary for me to do that. One of the problems in making calculations is whether to include the sugar subsidy benefit of approximately £35 million. It is not included in the calculations in such journals as the Economist, for the straightforward reason that nobody can say whether the sugar which one buys this week is or is not drawn from the EEC subsidised sugar supplies or comes, for example, from the free market. Problems of this kind make a precise statistical formulation virtually impossible.

When the right hon. Lady gets back to Downing Street, will she support her newly enlightened colleague, the Minister of Agriculture, who no doubt, will be maintaining, quite rightly, that if we remain in the EEC not only will the consumer be better protected against sudden shortages, but the producer will be better protected against sudden gluts and will thereby be given the confidence to expand domestic food production, greatly to the benefit of himself and the consumer in this country?

My right hon. Friend the Minister of Agriculture has already indicated the importance which he places on the expansion of home food production. This arises from the feeling that it may well be that the world now has behind it the era of relatively cheap food from the Third World, because of the change in the population-agricultural pattern of the world as a whole.

Does my right hon. Friend agree that the common agricultural policy will be disastrous for the British consumer? Although the food subsidies maintained by the Government have kept the prices of milk, bread and cheese much lower than they are in Europe, what guarantee have we that we shall be able to maintain our policy of food subsidies?

As I have tried to indicate, assessment of the common agricultural policy turns very much on what world food prices have done or are likely to do. Any attempt at objective judgment will show that the CAP is rather different in its effects than it would have been in, say, 1971 or 1972. I assure my hon. Friend that there is no prospect of any attempt being made to interfere with the Government's food subsidy programme, which has been consistently not commented upon in any way by the EEC.

If the Common Market taxes on imported lamb, cheese and butter were abolished, would it not help to bring down the cost of living?

One has to say straight away that the tariff on lamb is one of the factors that has to go down on the negative list against the CAP. I understand that it is one of the factors that has tended to make food more expensive, just as the subsidies on sugar and the monetary compensatory amounts on cereals have tended to make them cheaper The hon. Gentleman is not wrong in saying that that is one factor that works the other way.

Does not my right hon. Friend agree that our experience since joining the Community is that the sort of fears expressed about the CAP and the Treaty of Rome were figments of theology and bear no relationship to the practical experience of our Ministers in negotiation?

I have tried to indicate, practical experience is that there has been very little difference, one way or the other, in the light of the increased world food prices over the last two years. As for the rest, the judgment of the House and the United Kingdom depends on what is believed to be the likely course of food prices over the next few years.


asked the Secretary of State for Prices and Consumer Protection which main foodstuffs imported into the United Kingdom are now either markedly cheaper or markedly more expensive than they would be if the United Kingdom were outside the EEC.

Taking account of EEC-financed subsidies, most imported cereals and sugar are cheaper than if we were not a member. Some dairy products and some imports on which duties are now charged, such as lamb and certain canned products, are probably somewhat more expensive than if we were not a member.

Will the Secretary of State arrange for the clear and balanced language which she used on this topic about 10 minutes ago to appear in the Government's White Paper on Europe? Is it not important that people should realise that withdrawal from the Community, far from bringing down the general level of food prices would probably push up bread and sugar prices and make supplies much more uncertain than they are today?

The White Paper must carry the fullest statement of the facts which the Government can put before the public and on which the public can base their judgment. Among the things that will have to go in is the effect of subsidies where they exist, but also the effect the other way where that exists.

Will my right hon. Friend accept that on this sort of issue, on which there will be considerable controversy in coming months, it is dangerous to enter into hypothetical matters and to discuss statistics for which there is no basis one way or the other? Does she not agree that the best thing to say about this matter on either side of the fence is that it has little effect one way or the other on food prices?

I think my hon. Friend is right. If both of us endeavour, from our particular points of view, to be factual with the House, we have to say that at the moment—the position changes from month to month—the existence of the CAP makes virtually no difference one way or the other to the price of food in Britain.

Consumer Advice Centres


asked the Secretary of State for Prices and Consumer Protection how many local authorities are providing mobile consumer advice centers; what steps she is taking to extend the use of consumer advice centre mobile vehicles operating over a wide area on a rota basis; and if she will make a statement.

According to the latest information available to me, six local authorities are providing mobile consumer advice centres. The extent to which the service is provided in this way is a matter for local authorities to decide, taking into consideration the particular circumstances of their area and bearing in mind their financial situation and the Government guidance on expenditure on consumer advice services.

Does my hon. Friend accept that it is disappointing that there is as yet a low take-up of this form of consumer centre? With the present economic stringencies are there not considerable advantages in a centre of this type which can serve a wide area at relatively low cost, compared with fixed buildings which can cater only for the people who can get to them?

I am sure that my hon. Friend will appreciate that the type of mobile centre to which he refers is at an experimental stage. It involves a vehicle, which employs a specialist driver, because of the trailer that is towed. It may not be the least expensive type of service. Other authorities are experimenting with prepaid postcards, free telephone calls, and a clinic rota system. Those systems may provide better value for money. The mobile consumer centre is one of many experiments.

Cannot mobile advice centres be conducted from the mobile libraries which already exist?

I thought that Members of Parliament provided the best mobile service.

When the hon. Gentleman is considering the best way of passing information will he send a message, by whatever means he chooses, telling people that if they go to Harrods they can buy subsidized butter at 10½p a pound? Does he think that that is a proper use of taxpayers' money?

The hon. Gentleman is wandering outside the range of the Question. He is trampling over ground which has already proved infertile to the Opposition. The Opposition should realize that and give up that battle.

Perhaps the hon. Gentleman could combine the rôle of mobile consumer advice information service on the record of the Labour Government? It had better be a service that is truly mobile.

At least we should have something to talk about, as opposed to the negative information rôle of the Conservatives.

Social Contract


asked the Secretary of State for Prices and Consumer Protection if she is satisfied with the working of the social contract as it relates directly to her ministerial responsibility for controlling prices.


asked the Secretary of State for Prices and Consumer Protection whether she is satisfied that the social contract is working in the interests of the consumer.

In fulfilling the requirements of the contract for the consumer, the Government have contributed significantly towards curbing costs of primary concern to the poorer members of the community. But pay has over the past year been rising much faster than prices and the TUC recognises that there is little room for increases in real earnings if the Government are to be able to continue their contribution on other sides of the contract.

Now that the Secretary of State and the Minister are beginning to acknowledge the part that excessive wage claims are playing in breaching the social contract, what are she, he and the Government intending to do to exchange the social contract for an effective policy to tackle inflation?

We shall certainly not enter into a policy that will lead us to a three-day working week.

Does the Minister agree with the remark of the National Institute that the social contract is compatible with any rate of inflation? If not, why does not he agree?

The National Institute made its assessment. Everything depends on the degree to which unions observe the social contract. The TUC, the Chancellor of the Exchequer, the Prime Minister and other Ministers have made that clear.

With a voluntary contract, of course there will be breaches, but the Opposition must be realistic and ask themselves what they would put in its place, which would work and not be as disruptive as was the system which they were forced to abandon after the three-day working week.

As the statutory incomes policy which was introduced by the Conservative Government has been abandoned and the social contract has taken its place, will my hon. Friend say whether representations have been made by the Opposition to the Government suggesting an alternative to the social contract? Does my hon. Friend agree that wages have gone up because of the threshold agreements which were agreed privately and had to be honoured by the Labour Government?

Unfortunately, the Opposition are concerned solely with cheap political capital. They ignore the rôle played by threshold agreements and the pent-up special cases of phases 1, 2 and 3 in stoking up increases above the normal criterion of the social contract. Conservative Members can by all means make political capital, but at least let them also be constructive.

Is it the view of the hon. Gentleman that a substantial rise in taxation would be consistent with the social contract?

That is a question on taxation, which the hon. Gentleman should put where it belongs, namely, to the Chancellor of the Exchequer.

Will the Minister confirm the answer which he gave a moment ago, namely, that an essential prerequisite for the success of the social contract is wage restraint by the unions?

Of course I confirm it. That was also confirmed by the TUC, which said that there could be no meaningful increase in real earnings during the period of the social contract. That is what it is all about, and that is why we are trying to alert those negotiators who do not seem to realise the risks which breaches of the social contract can produce.

Will my hon. Friend confirm that an important element in the social contract is price control and that the Government have no intention of relaxing that control? Will he also confirm that within the voluntary arrangement there has been a remarkable degree of success, in that 75 per cent. of wage settlements have been within the terms of the social contract?

My hon. Friend is quite correct. Until the end of January, 75 per cent. of the workers who settled did so within the social contract. As for price controls, my hon. Friend will know that we have recently introduced our revision of the Price Code, which may sectors of industry are still attacking as being too tight. We made these revisions to meet representations about the investment requirements of industry.


asked the Secretary of State for Prices and Consumer Protection whether she has ruled out as her policy for the indefinite future her proposal in paragraph 13 of the Consultative Document on the Prices Code to impose penalties on employers obliged to concede wage claims in excess of the social contract guidelines.

I cannot speak about the indefinite future. For the present and foreseeable future, I have made it clear to the House that a scheme for a differential productivity deduction depended on the consent of both sides of industry, and this was not forthcoming.

Is the Secretary of State aware that the Opposition would consider it extremely unfair to penalise employers in this way, particularly when they might be faced with bankruptcy by responding to such pressures? Does she further agree that measures of this kind would simply introduce by the back door the very statutory policy which the Labour Government have set their face against?

No, I do not accept that that is so, because there is already an element of diffential productivity deduction between capital-intensive and labour-intensive firms. The point raised by the hon. Gentleman was rejected by the CBI and has not since been pressed.

Cost Of Living


asked the Secretary of State for Prices and Consumer Protection whether the cost of living index for retirement pensioners and the poor and low-paid rose faster or more slowly than the index for the average wage earner during 1974.

The retail price indices for one-person and two-person pensioner households rose 18·4 per cent. and 18·2 per cent. respectively between the fourth quarter of 1973 and the fourth quarter of 1974. The general retail price index, on a comparable basis, rose by 19·4 per cent. No official indices are available for the poor or low-paid.

I thank my hon. Friend for that answer. Why are no such indices available, why was the gap so small last year. and what changes in Government policy are necessary to ensure that there is a gap at all this year?

The position of pensioners has been assisted, as my hon. Friend knows, by exceptionally large pension increases. He may be interested to know that the food index increases have been considerably more beneficial for the pensioner than they have in regard to the general index.

Is the Minister aware that pensioners living in rural areas are particularly hard hit because of the rise in the cost of public and private transport? What does he propose to do to help them?

Since I represent a rural constituency which has an elderly population, I am well aware of the problem to which the hon. Gentleman refers. He will be aware that the Government are considering the possibility of introducing a two-tier petrol pricing system and that all possible steps are being taken to deal with the point he made. He will also be aware that there is to be an increase in pensions in April and, later in the year, another increase to take account of rises in the cost of living.

Does the Minister accept that many of us view with dismay the fact that the Government are thinking seriously of a two-tier petrol pricing system? Does his answer not illustrate the ridiculous nature of the Government's policy on food subsidies—in other words, that those who need help are not being assisted to the best advantage by this system, which squanders public money?

I hope the hon. Gentleman, in turn, is aware that this is the first time the pensioner index has risen less rapidly than has the general retail price index.

Will my hon. Friend go further and say that food subsidies have played a large part in what has happened to the index but that the amount of support administratively is small compared with the system operated by the Conservative Government in earlier years?

Whereas food subsidies have saved 6·38 points on the food index and 1·61 points on the retail price index, they have saved 7·91 and 7·13 points respectively in the food indices relating to one-person and two-person pensioner households. My hon. Friend is entirely correct.

Does the Minister agree that to pensioners prices are a weekly disaster? Since the present Prime Minister said in February 1974, when in opposition, that there were 100 reasons for getting rid of the Conservative Government and that foremost among them was the question of prices, does the Minister not agree that the pensioner is now in an invidious position? Further, what does he propose to do about the increases in postal charges which are operative from today?

The hon. Gentleman cannot have listened to the answer, which showed that for the first time for a number of years the position of pensioners has improved in relation to price increases for the public generally. I hope he will take a more constructive line in future if we have to consider the reintroduction of food subsidies, which are particularly important.

Does the Minister recall that in the last election the Chancellor said—and I quote his words:

"As from Easter there would be a steady and continuous fall in prices. That obviously would be an immense help to the pensioner."
Does he still expect that to happen? If not, what has changed?

My right hon. Friend the Chancellor of the Exchequer did not say the words which the hon. Gentleman has attributed to him.


On a point of order, Mr. Speaker. In my supplementary question, I quoted the Chancellor of the Exchequer as having said that there would be a steady and continuous fall in prices as from next Easter—a statement which the Under-Secretary of State denied had been made by the Chancellor. Before giving notice that I should like to ask leave to raise this matter on the Adjournment, may I, through you, Mr. Speaker, ask whether the Under-Secretary would now like to take advantage of the opportunity—as I have checked with the Library —to withdraw his denial of the Chancellor's having made that statement?

I recognise that there is a difficulty here, in that it is not open to hon. Members to quote directly by reading at Question Time, but my understanding is that the hon. Gentleman misrepresented by right hon. Friend on this matter. However, if the hon. Gentleman proposes to raise the matter on the Adjournment, doubtless it can be exhaustively debated.

Bakers (Wholesale Discounts)


asked the Secretary of State for Prices and Consumer Protection if she will amend the regulations governing discounts granted by bakers to wholesale customers.

My right hon. Friend has no proposals at present for amending the arrangements introduced on 13th January, but we shall continue to keep their operation under close review.

Is the Minister aware that the distribution costs of dairy companies distributing bread from milk floats is substantially higher than the distribution costs of supermarkets? Will he accept that if dairy companies withdraw from this activity owing to lack of profitability, the result will bear heavily on old people in rural areas who rely on this service for their bread? Will he reconsider this serious interference with the normal trading pattern?

The special position of those delivering in rural areas, as agents or franchisemen, has been recognised in the system. Substantially larger discounts are permitted than are permitted to the multiples.

Fish (Reserve Price)


asked the Secretary of State for Prices and Consumer Protection what consultations took place between her Department and the Hull trawler owners before the new reserve price for fish on the Hull market was raised by 70 per cent. to a minimum of £13 a kit, an increase of £5.

None. The matter was raised with the Ministry of Agriculture, Fisheries and Food, the sponsor Department for the fish industry in England and Wales. The new reserve price remains below the average level of prices at the quayside, so the increase should not affect retail prices. My right hon. Friend is proposing to ask the Price Commission to undertake a study of prices and margins in the distribution of fish. An announcement will be made shortly about the scope of the study.

Is my hon. Friend aware that the Department of Fisheries is kept constantly informed in all these matters? The price of £13 a kit is below the average for last year, which was from £17 to £19. We all deplore the fact that some fish goes to the fishmeal plant and some which is sent to the plant is not the worst fish, or else it would have been condemned by the inspectors. Does not my hon. Friend appreciate that if we are to sell at quayside prices of £7 to £8 a kit, it means that vessels will be tied up, and that this in turn, will mean unemployment for our people—both deckhands and skippers?

I am aware of the points to which my hon. Friend refers. It must be made plain that the trawler owners are not raising prices but are simply increasing the price levels below which they will not offer their fish for sale for human consumption. My hon. Friend is also correct about the fish being removed from the market, but I think he will agree that it is a small quantity.

Is the Minister aware that the price of fish at the quayside is now considerably lower than it was in 1966? How does he explain that the price in the shops is considerably higher? Is that part of his Minister's planning?

The fall in the quayside price of fish is due, in part, to exceptionally large stocks being held in deep freeze, and, in part, to the diversion of Norwegian fish to this market. The difference between quayside prices and the prices that the housewife has to pay in the shops will be the subject of the study by the Price Commission, which I have announced.


European Economic Community


asked the Secretary of State for Trade whether he will consult with the British Overseas Trade Board on the desirability of continued membership of the EEC; and if he will make a statement on such discussions.

Consultation, on the renegotiated terms, will take place with the nation as a whole, through the referendum. However, as its president, my right hon. Friend always welcomes discussion of issues of concern to the British Overseas Trade Board.

Would it not be right for the Secretary of State to consult the board on the vital issue of EEC membership, as the board was set up specifically to oversee the whole question of export promotion? Can it be that the Secretary of State is not consulting it because he is aware that it would give the answer "Stay in the EEC", which runs contrary to his predetermined prejudice to get out?

The board has made known to me, my right hon. Friend and others the importance which it attaches to markets in Western Europe as well as in other parts of the world. I share those views. However, renegotiation embraces issues beyond immediate commercial considerations.

Does the Minister agree that it is interesting not only that 30 per cent. of our total exports now go to the EEC but that 10 per cent. of the other member nations' exports come to us? Is not that a fantastically compelling trade argument for the future?

It is indeed an important trade argument for the future. Whether or not we remain in the EEC, Western Europe will continue to be a major area of concern and activity for British business.

Does my hon. Friend agree that the interpretations put on the balance of payments deficit figures are many and varied, even within the Cabinet, and that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has a very different interpretation from that of my hon. Friend, because my right hon. Friend has been at the negotiating table in the past 12 months? If we get out of the Common Market, which we are all beginning to doubt, does my hon. Friend think that our trade with Europe will go up or down?

The figures of our trade with the Common Market are of great concern and import not only to the House but to business men and the people of this country. Whether or not we stay in, Western Europe will continue to be a major area for British trade. I am sure that it would be the aim of any Government of this country, whatever the circumstances, to ensure that we had a satisfactory trading relationship with Western Europe.

Do not the true interests of British exporters lie not so much in membership of the Common Market but in maximising free trade throughout the world? Has not more been achieved by past GATT negotiations, and, one hopes, the present GATT negotiations, than by the Common Market?

I should not like to offer an opinion on the question whether GATT has meant more for free trade than the Common Market, EFTA or any other regional grouping. This Government are dedicated to the principle of free trade, and I hope will long remain so.

As there is apparently no food price advantage from remaining in the Common Market, does my hon. Friend agree that with a £2,300 million-£2,400 million annual deficit, which my hon. Friend has just revealed, the conclusion is that we should get out of the market, especially when the power of this Parliament is being handed over to bureaucrats in Brussels? Will my hon. Friend confirm that trading arrangements will be able to continue, probably improved, through EFTA and GATT?

Future trading arrangements between Britain and the Common Market will be a matter for negotiation if the British people should vote "No" in the referendum. If they vote "Yes", our trading relationships will continue on the present pattern. Our interest after the referendum, if the referendum vote is affirmative, will be to ensure the freest possible trade between this country and the many growing markets throughout the world outside Western Europe.

In answering questions about the deficit with the EEC, will the hon. Gentleman make sure that he puts it in context, against the background of the deficit as a whole? Will he deplore the attempts of some Labour Members who are against membership of the EEC to fight a campaign by innuendo at Ques- tion Time, when the true issues should be set out clearly?

Having worked for a long time in industry, I am all in favour of using statistics in the appropriate context and not forcing them into an inappropriate context. The deficit with the Common Market must be seem in the context not only of our total trade deficit but of our total non-oil trading deficit, as the oil deficit greatly distorts our trading relationships with two-thirds of the world.




asked the Secretary of State for Energy how many staff his Department has engaged in lecturing to voluntary organisations such as Women's Institutes, Mother's Union, and so on, about how to conserve energy in the home.

None of my staff is engaged specifically for lecturing voluntary organisations on how to conserve energy in the home.

Is that not evidence of a major oversight by the Government? Should not the housewife be the natural ally of the Minister's Department in conserving fuel? Is it not correct to say that if even a 5 per cent. saving of energy were to be the result of a campaign by the Government directed at housewives, a large part of the problem which the shortage of energy and the energy price have presented to the Government would be solved?

I have some sympathy with that point of view, but I think that the hon. Gentleman has forgotten that the Government have undertaken a massive publicity campaign, aimed primarily at the householder and other consumers. The hon. Gentleman will probably agree—he appreciates that conservation of energy is important for the country—that officials and technical experts should, as part of their normal functions, concentrate their available time on industry, where consumption is nearly double that of the domestic sector, and represents over two-fifths of the consumption of the whole country.

Could we not have a lecture, at some time, on how to conserve energy in the House?

If my hon. Friend is enthusiastic about that, we could probably appoint a workmen's inspector in the House to go into the matter.

Does the Minister agree that the most efficient form of promoting economy is a good, swingeing price increase?

No, Sir. I cannot agree with the right hon. Gentleman. There is no question but that the days of cheap energy have gone. It is in the interests of the consumer and the country that we should try to conserve energy, because that will be beneficial to the individual and the nation.

Does my hon. Friend accept that one useful way of achieving energy savings would be for people from his Department to lecture to organisations such as the Women's Institute about some of the dangers of the miner's job and the difficulties of his life, so that the middle-class housewives who take part in the activities of such organisations have some appreciation of the real issues—which was not shown by some of the comments made during recent disputes in the mining industry?

I think that my hon. Friend has a problem here. This is a political issue. I think that education is important. Although it is the responsibility of the Department of Energy, I have no doubt that the Workers' Educational Association and, perhaps, the resuscitation of the National Council of Labour Colleges will make the contribution of which my hon. Friend is thinking.

Does the Minister accept that the increasing price of energy is due largely to Government misjudgment over a period of years, in that they have sought to produce electricity from expensive coal instead of by cheap, humane and clean nuclear means, which Governments persistently neglect?

I cannot agree with the hon. Gentleman. The biggest factor in relation to the steep increase in electricity is facts. We were talking about facts. The facts are that we are now paying £3,500 million from our balance of payments for very expensive oil. If, in the past, the Opposition had given us some support for a proper energy policy, giving coal and all the other indigenous sources of energy their proper bias, today's problem might not have been as large as it is now.

Perhaps we can save a little energy by not having the blinds drawn when the sun is not shining.