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Prices Act(Continuation Order)

Volume 888: debated on Tuesday 18 March 1975

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9.40 p.m.

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

I beg to move,

That the Prices Act 1974 (Continuation of Section 2) Order 1975, a draft of which was laid before this House on 4th March, be approved.
In asking the House tonight to approve this draft order continuing Section 2 of the Prices Act 1974 in operation for a further year, I am doing no more than seeking confirmation of the decision we have already taken in principle during our discussions on the Prices Bill which received its Third Reading on 12th March. Hon. Members will recall that Clause 2 of the Bill enables the price regulation and display powers of Section 2 of the 1974 Act to remain in operation without time limit after the original expiry date of 31st March 1975.

It may well be asked why, in view of our previous debates on this subject, it is necessary for us to discuss the issue again this evening. The reason is this! Since Section 2 of the 1974 Act is due to expire at the end of this month, early action would in any case have been necessary to ensure its continued availability. It was clearly sensible to take the opportunity of the current prices legislation to achieve this. The Bill was introduced as soon in the present parliamentary Session as was possible.

We had hoped that, with the Second Reading on 30th January and given the necessary co-operation in the House, the Bill would have received the Royal Assent before the Easter Recess, so obviating the need for a separate continuation order for Section 2. In the event, the pressures on parliamentary time have been such that this goal will clearly not now be attained. In order to avoid any lapse of the prices orders which have been made under Section 2, it was accordingly necessary for the Government to seek parliamentary approval for the present order. The House will understand that the order will inevitably have a very short life since, once Clause 2(1)(c) of the Prices Bill has been passed, it will automatically supersede this order which is being made under the provisions of Section 2 of the 1974 Act which the Bill repeals.

Section 2, as the hon. Gentleman knows, provides powers to regulate by order the prices and margins of subsidised and fresh foods and, at retail level, those of other articles which may be regarded as essential parts of the regular expenditure of low income households. This is backed up by a power to require details of the regulated prices to be displayed in shops where the goods are sold. After extensive consultations with interested bodies, we have used these powers to set maximum retail prices for bread, butter and cheese and to control distributors' margins.

These orders ensure that the requirement to pass through to consumers the full amount of the subsidy on these foods has a statutory basis. The prices of the other two subsidised foods—tea and household flour—will be similarly regulated as soon as our consultations are completed.

Section 2(5) of the 1974 Act provides that these orders shall apply only to sales during the period up to 31st March 1975 but gives the Secretary of State power, by order, to extend the period for up to a further 12 months. Since the orders which have been made are necessary to ensure that the benefit of the subsidies is passed through into retail prices, they will clearly be required for so long as any food on which subsidy has been paid is available for retail sale.

The Opposition have somewhat exaggerated the probems which might arise either with regard to the enforcement of the orders or as a result of the display requirements. However, this is not the occasion for a detailed discussion of these matters, which we have debated at length on other occasions.

I should, however, like to read a letter which my right hon. Friend recently received about the enforcement of the food prices orders from the County Consumer Protection Officer of the West Sussex County Council. I am sure the hon. Gentleman will agree that this is an authoritative source. After reporting the results of nearly 3,000 inspections his staff had carried out, his letter goes on to say,
"All of these have been dealt with by means of written warnings and follow-up visits have been made to ensure that compliance has been achieved. In addition to direct enforcement, Press releases have been issued as each order has been received, and talks have been given to local chambers of trade and individual companies, in an effort to achieve a high level of compliance with a minimum of disruption of retail trade. You may be interested to know that this work fits very well with our other statutory duties and has given no great difficulty so far."
This makes it clear that the existing orders are perfectly capable of effective enforcement. But, in the light of experience we have taken steps to facilitate their enforcement still further by providing in the current Bill for orders to be made, subject to prior consultation with representative organisations, requiring traders to keep records of information relating to regulated prices which are needed for the efficient enforcement of price regulation orders.

The second aspect of these orders which the Opposition have criticised is the requirement for information about controlled prices to be displayed in retail shops. The Government have to maintain a balance between the legitimate interests of the consumer or the housewife in knowing about the top prices she can be asked to pay for subsidised food and the natural desire of shopkeepers to have the task put upon them made as easy and straightforward as possible. We have already considerably simplified the display requirements with the convenience of both shoppers and shopkeepers in mind, and we have provided in the Prices Bill for the information to be kept for production on request as an alternative to public display. This will enable the display notices in future to be limited to a few best selling lines in which consumers are particularly interested and accordingly minimise retailers' additional obligations under the Act.

With the improvements we have made, the future operation of the prices orders under Section 2 of the 1974 Act will be very much more convenient and effective for traders, enforcement authorities and consumers alike. But quite apart from this, public expenditure considerations alone require that the orders on subsidised foods should continue in force, and the Government are therefore fully justified in asking the House to approve the extension of the Section 2 powers. As I have explained, the particular vehicle for their extension represented by this draft order will be short-lived, given the provisions in the Prices Bill, but it is necessary to ensure the continued safeguard of money spent on the subsidy, and I ask the House to approve the order accordingly.

9.47 p.m.

I am grateful to the Under-Secretary for explaning why this order is necessary and for outlining the provisions which flow from Section 2 of the 1974 Act. Our view, which was expressed in our previous discussions on the legislation, was that the orders which flowed under this Section were of dubious relevance and were defective in certain respects. We still take the view that there was no overwhelming need for these orders to be reintroduced pending the order under the Prices Act when it receives the Royal Assent.

Since the Prayer on the butter order in January, there have been a number of changes which have affected these orders, There have been changes in prices and, secondly, there have been concessions on the display notices, to which the hon. Gentleman referred again tonight. We accept fully that these concessions will improve the situation considerably.

Our view on this order, however, was that it would have been far better simply to wait until we had the new orders and that there was no good reason why they should not lapse until the Bill now going through the House of Lords had become law, with the changes, which both sides of the House agreed would result in considerable improvements.

We regarded the original orders as defective, bureaucratic and ineffectual. We regarded the maximum prices as not being of very great use to the consumer when in many cases shops were displaying notices of prices well above those actually being paid in the shops. We felt that that was likely to be of questionable usefulness to the consumer.

There was also the question of the burden being placed on the small shopkeeper. The Minister referred to the changes and the improvements, which again I welcome. But the existing orders, as was pointed out in the debate, resulted in two prominent notices for bread prices, eight categories of bread and perhaps three prices for each, and two small notices for butter prices.

The Minister will recall that it was said in the debate how The Grocer magazine estimated that there could be as many as 200 notices required in a small shop—a truly staggering figure—and that, even if the Minister thought that that was exaggerated, in itself it indicated some of the muddle and confusion caused by thee regulations. Incidentally, I understood that there was to be exemption for the smaller shops of 250 ft., but the Minister did not say anything about that matter tonight. We hope to hear something about that matter in the near future.

This is not the occasion to go into the reasons why we regard many of the provisions as complicated and, for that reason, difficult for the small business man and shopkeeper to understand. Some of the provisions on margins and base periods are very complicated. It is unlikely that many small traders will have kept records of the quantities of goods that they purchased which would be necessary to comply with the order.

Another point which I will not go into concerns special offers being excluded. We argued that if special offers were excluded from the regulations it would become difficult to calculate the base periods and the base prices under the order. I do not want to go into that matter in detail as that was done in the previous debate. The fact that those arguments were advanced seems a good reason for not renewing the order for such a short period.

These are bad days for small business men and shopkeepers. I am particularly pleased that the Daily Express has recently given a lot of coverage to the problems of small shopkeepers and business men who now feel that they are being covered by a tangled web of red tape, bureaucracy and regulations of a pettifogging and petty-minded nature.

We encroach more and more on the time of the business man. We ask him to give up his time to act as the Government's agent. We ask him to give up space in his shop to display the Government's notices. There are all the troubles from the threat of multiple rates of VAT, the increase in national insurance contributions, the administrative problems of butter and beef coupons where again the small business man has to act as the Government's agent. Not least, there are the problems of rates and capital transfer tax.

One point to which the Daily Express recently drew attention concerned the tremendous number of small businesses which have gone out of operation in the last 10 years. Apparently one-third of our newsagents, grocers and tobacconists, one-quarter of our greengrocers, fishmongers and chemists and one-half of our shoe repairers have gone out of business since the 1960s. We believe that small businesses of that kind fulfil a vital need in our community. They offer services which are in great demand and provide good value for money.

Many small business men wonder whether their efforts have been worth while and feel very bitter about the whole situation. We read with interest some Press reports about the Secretary of State for Industry wanting to tax small business men even more.

This order will pile more administrative burdens on the small business man. That is why we have criticised such orders so much in the past. This order is to come in for only a short period and other improvements will be made. Therefore, although we wish to express our reservations about the order, we do not intend to divide the House upon it.

Question put and agreed to.

Resolved.

That the Prices Act 1974 (Continuation of Section 2) Order 1975, a draft of which was laid before this House on 4th March, be approved.