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Prices And Consumer Protection

Volume 891: debated on Monday 28 April 1975

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Price Code


asked the Secretary of State for Prices and Consumer Protection when she next intends to review the Price Code.

I have no plans for a general review of the stage 4 Price Code. I am consulting appropriate representative organisations on the proposals announced in the Budget Statement for amendments to two paragraphs of the code.

In the light of the proposed improvements in the investment relief, and given the increase in the rate of inflation, surely this is merely running hard to stay in the same place and will make little practical difference. Given the time needed for investment decisions and given that the power of the legislation expires next spring, surely this will not influence anyone to take any new decisions about investment, although it will be of help to people who have already made those decisions. Surely the right hon. Lady must give some indication of the Government's intention next spring.

The hon. Gentleman must appreciate that it would be rather foolish for me to say a year ahead what the Government's intention can be next spring, because none of us can be sufficiently clear about the circumstances that can arise. Because investment relief is stated in percentage terms and in terms of categories, it is true that inflation is not affected, and this will bring fresh relief of the kind we want to those who are genuinely engaging in investment, growth and jobs.

Would not the right hon. Lady agree that the Chancellor's measures added 2.75 per cent. to the price index and that as the CBI estimates that the total removal of price restraints under the code would add another 1 to½per cent. it will not be worth while?

I am not at all sure that I accept the CBI's estimate. It should be pointed out that the CBI's estimate of the effect if the Price Code restraints were removed would apply to the prices of all sorts of goods, essential and less essential, whereas the Chancellor's measures applied above all to the less essential goods.


asked the Secretary of State for Prices and Consumer Protection what recent consultations she has had with the food industry with regard to the operation of the Price Code.


asked the Secretary of State for Prices and Consumer Protection what progress has been made in the consultations between the Department and the food industry with regard to amendment of the Price Code.

Following the statement on the Budget made by my right hon. Friend the Chancellor of the Exchequer on 16th April, I have circulated to interested parties a consultative document, which is available in the Vote Office, setting out the changes I propose to make to the Price Code. Among other changes, I propose to extend investment relief to commercial vehicles. This measure will, I believe, be of particular benefit to the food manufacturers as well as to distributors. My proposals take account of recent discussions between my Department and representatives of the food manufacturing industry.

Is the right hon. Lady aware that the Budget did nothing of any significance or relevance and that this absurd bureaucracy is strangling the profitability of the industry? Why not take some direct measures to ease the code in its operation? Why is the Department being so rigid over the discounts which bakers are prepared to offer to wholesalers—I put a case to the right hon. Lady recently—so that a supermarket chain can reduce the price of a loaf by 2p or 3p?

The hon. Member is on very weak ground. In the first place, the Government introduced a specific tied investment relief because we were concerned about growth. If the hon. Gentleman's own administration had done this earlier, we might have had more growth this year. [Interruption.] All I can say is that the industry itself very much welcomed this, and it will not do for hon. Members opposite to fool about in a situation in which the industry itself has pressed for investment relief of this kind.

With regard to the point about the use of the Price Code and bureaucracy, in my view it would be irresponsible in a situation of rapid inflation not to recogise that sacrifices have to be made by all sections of the community, including industry.

While accepting that any relief, be it in investment on vehicles or in any other way, is acceptable in relation to the profitability of food manufacturing companies, may I ask why it is that in the last week we have seen a report from the Spillers Group indicating a loss of £7 million on the baking side of which it attributes £6 million to the restraint of the Price Code?

There is a very difficult technical position in respect of the baking industry. The hon. Gentleman at least will recognise that it would have been irresponsible of me as Secretary of State for Prices and Consumer Protection to allow the subsidy to be used to widen discounts so that there would be no effective control over public expenditure. Of course, it is the case that we have introduced controls over discounts for the purpose of protecting the taxpayer.

Will the right hon. Lady recognise that, given that the reliefs which she has given are welcome, they have only marginally affected the food industry, which still has special problems? Does she not accept that it is in the interests neither of consumers nor of the people employed in the industry for such companies to go bankrupt? With regard to the meeting she had in her Department and the information she has given that the Department would have new criteria in relation to the interpretation of those provisions of the Price Code that the food manufacturers were complaining about, her Department cannot do such a thing. Such an interpretation must be judicially recognisable. Will she issue orders?

We are very happy to discuss at any stage with the food industry any ways in which we can assist in making orders as clear as possible. I accept what the hon. Lady says. It is fair to say from the point of view of the general public that there has been a fairly dramatic fall in the margins of retail food and drink prices from 2·8 per cent. in the third quarter of 1973 to 1·9 per cent. in the third quarter of 1974. It is worth pointing out to the public that there is no profiteering in the retail margins of food at the present time.

European Community


asked the Secretary of State for Prices and Consumer Protection if she will list the ways in which British consumers will continue to be protected from price rises whilst the United Kingdom remains a member of the European Community.

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

As members of the European Economic Community we are free to act on prices as we think best and my right hon. Friend will continue to implement the Counter-Inflation and Prices Acts in the interests of the British consumer.

While I thank the Minister for that statement, I wonder whether he can give the House an idea of what little effect our membership of the European Community has had directly on prices generally in this country.

It is true that at present the effect is broadly neutral. It should be emphasised that British consumers are major beneficiaries of the tariff cuts which have already been made between the United Kingdom and our Community partners in respect of nonfood items—for example clothing, on which tariffs have come down from 20 per cent. to 8 per cent.; furniture, from 10 per cent. to 4 per cent.; carpets, from 25 per cent. to 10 per cent., and radios, from 15 per cent. to 6 per cent. Taking food and other goods together, broadly the effect of our membership of the Community on the level of prices has been to restrain it. The effect has not been very great, but every help in dealing with inflation is good to have.

I think my hon. Friend will accept that I doubt almost all he has just said. Would he not agree that far from our having power to deal with our own prices, especially of food, we are compelled to put an import levy on them if they fall below Common Market prices? Therefore, we are on a compulsory ladder in which every rung is pushing up our prices whether we wish them to go up or not.

I hope that my hon. Friend is not doubting the accuracy of the tariff cuts to which I have referred. As a former Agriculture Minister he will know that we had levies and import quotas under our agricultural system even before entry into the Community and that the Community export levies have positively held down the price of cereals during the past year and have enabled us to keep the price of bread lower than it might otherwise have been.

Is not the whole system based upon keeping prices of food up in the Common Market? Would it not be more sensible if the money that we have to pay to the Community for keeping prices up could be spent on keeping food prices down in this country?

No, the hon. Gentleman is quite wrong. The objective is to keep prices stable.

The hon. Gentleman will know, for example, that by a direct Community subsidy worth £40 million in recent months we have been able to keep down the price of sugar to the British consumer.


asked the Secretary of State for Prices and Consumer Protection what she estimates will be the effect on the average family's weekly food bill of Great Britain leaving the EEC.


asked the Secretary of State for Prices and Consumer Protection what effect she estimates withdrawal from the EEC would have on the housewife's weekly budget.

Membership of the Community is at present having no significant effect on food prices overall.

Does the right hon. Lady share my concern that the price of food as measured by The Guardian shopping basket went up by 5 per cent. in March alone? Bearing in mind that the official Labour Party propaganda machine will be using that fact, what opportunities will she have in the coming weeks to point out that only a small part of that rise was due to our membership of the EEC?

One of the main effects on the increase in the food index arose from the decision taken in our own Annual Farm Price Review with respect to the price to be paid to dairy farmers in the light of their soaring costs. One must therefore make clear the reasons for this increase in the index, which had virtually nothing to do with the EEC, although I must repeat that there was some effect on butter and cheese prices in consequence of the April transitional step.

Is it not the case that the EEC has decided to apply value added tax to food prices next year? In view of the policy of harmonising these taxes as a result of our membership, will that not also mean that VAT will be applied to food prices in the United Kingdom?

No, there is no question of this country having to accept VAT on food or on children's clothing unless we decided as a national Government to do so.

Would the right hon. Lady agree that the ultimate harmonisation of food prices within the EEC could mean ultimately that food costs could take as much as one-half or two-thirds of the average weekly family income in the United Kingdom?

If so, it would be different from the experience of all other countries in the Common Market, some of which have been members for almost 16 years and in none of which is anything like that proportion of income spent on food. Such a situation would require a number of circumstances which seem to me to be extremely improbable.

Would the right hon. Lady be concerned about the future supplies of food if we were to withdraw from the EEC?

None of us, whatever our views on the EEC, can make any final statement about supplies outside the Community. What we can say is that the degree of self-sufficiency in temperate products in the Community offers some stability which we cannot be equally sure would be paralleled in the outside world. The recent experience over sugar and even more the experience of New Zealand, which was unable to meet its own quotas of butter and cheese permitted in 1974, suggest that there is some uncertainty about supplies in the world outside.

My right hon. Friend said that the present net effect of our membership of the EEC on food prices was zero. Can she say how much the net effect has varied since we became a member?

First, I should not like my hon. Friend to assume that the effect has been zero. I cannot say that it has been. I can say that there is no significant effect, the problem being quite simply that no one can precisely ascribe the sugar subsidy, amounting to over £40 million, to any particular person's purchases of sugar. If people buy EEC or world sugar, that sugar is subsidised to the extent of 20p on a 2-lb. bag. If they buy Caribbean sugar under the CSA, it is not subsidised to the same extent. I hope the House appreciates that we are trying to give the clearest picture we can and that there is some difficulty about presenting precise figures. Broadly speaking, there is no significant effect; if we include sugar, there is a mildly favourable effect; if we exclude it, there is a mildly unfavourable effect.

Secondly, in 1974 as a year there is no doubt that there was a favourable net effect in terms of food prices. My hon. Friend will appreciate that we are having to give from week to week the most up-to-date figure we can.

Food Subsidies


asked the Secretary of State for Prices and Consumer Protection what is her latest estimate of the total cost of food subsidies for the financial year ending 5th April 1976.

Is it the case that more than half of that £550 million will go in the current year to families with an income of more than £50 a week? Secondly, does the right hon. Lady agree with the Chancellor's policy of reducing food subsidies by £150 million next year? If she does, why can the reduction be right next year but not right this year?

On the second part of that question, the hon. Gentleman will recall that as long ago as the Prices Act 1974 I made it clear that the food subsidy was a response to the high level of raw material food costs which we were facing at the time. For evidence of that statement, I refer the hon. Member to Hansard, 10th February 1975, col. 24–25. As for his perpetual view that the subsidies largely benefit the better off, recent research has indicated, taking into account the expenditure on food as a proportion of household budgets and the expenditure on subsidised foods within the amounts spent on food overall, that the broad benefit to families with under £20 a week income is nearly four times as great proportionately as to families with incomes of £80 or over.

Would my right hon. Friend agree that, as we have moved forward from the cheap food policy that we have had under successive Governments since the end of the war to the dear food policy that we might have to pursue as a member of the EEC, food subsidies have kept prices down, that housewives in Britain can buy German butter far cheaper than it can be bought in Germany and that a housewife in Northern Ireland can buy Kerrygold butter cheaper than it can be bought in Southern Ireland? Have not food subsidies helped a great deal, transitionally at any rate, to keep down prices?

I welcome my hon. Friend's support for the food subsidy policy. I hope he will take heart from the fact that, judging from the most recent statement by the Commissioner for Agriculture, M. Lardinois, it appears that we are beginning to persuade the Community of the benefits of a food subsidy policy. Perhaps the Opposition will notice that already it seems that, if we remain in the Community, it will adopt the system of food subsidies, as I hope it will.

Despite the fact that she seems to be taking heart, is the Secretary of State aware that the difference in the increase in food prices under the Conservative administration and under the present Government is startling, even allowing for transport costs and the other factors that she quoted? During the last three months under this Government food prices have risen by 10 per cent. In our last three months they rose by 5 per cent. This is a basis of comparison which both the Secretary of State and the Minister of State are fond of using. Taking the comparison on a six-monthly basis, under this Government food prices have risen by 17 per cent. compared with 11 per cent. under the previous Conservative Government. Is it not therefore nonsense to claim any noticeable significance for food subsidies?

It all depends what months one chooses. I was not going to pursue this question, but if I were asked to do so I would point out that, on the basis of a three-months average, the highest increase in food prices that we have ever had was in the period immediately at the time that the last administration left office.

On a point or order. I beg to give notice that, in view of the right hon. Lady's unsatisfactory reply, I shall seek to raise the matter as soon as possible on the Adjournment.

Unit Pricing


asked the Secretary of State for Prices and Consumer Protection what action she is taking to encourage a wider use of unit pricing in shops and supermarkets.


asked the Secretary of State for Prices and Consumer Protection what progress has been made towards the introducing of mandatory unit pricing.

Following the favourable reception to our initial price marking orders we are pressing on with our plans for extending mandatory unit pricing to other fresh and frozen foods. In particular we are holding discussions with the interests concerned on meat, poultry, fish, fruit and vegetables to consider the most suitable methods of so doing. My right hon. Friend hopes to be able to make a further batch of orders before the Summer Recess.

I am grateful to hear of the progress that is being made. Would not my hon. Friend agree that the bewildering array of prices, sizes and brands on supermarket shelves makes it virtually impossible for the housewife to exercise intelligent value-for-money choice unless she carries a slide rule or a pocket calculator? Does not my hon. Friend agree that the introduction of unit pricing is the best way of enabling the housewife to make intelligent choices? Will he therefore press on firmly with this policy?

I am grateful to my hon. Friend for his support. We attach considerable importance to making as rapid progress as possible in this rather difficult area. There are very complicated problems which my hon. Friend will understand, particularly in respect of unit pricing of meat. There are other areas in which we hope to be able to provide better information—for example, by prescribed quantities.

Does not the hon. Gentleman agree that two of the problems involved here are, first, indecision about whether we are part of the Community —a definite decision on this point would help manufacturers to unit-price packages which are constant—and, secondly, the position with regard to metrication?

To be fair, we must proceed with unit pricing whether or not we decide to remain within the Common Market. We are bearing the metrication issue very much in mind.

Hearing Aids


asked the Secretary of State for Prices and Consumer Protection how many representations she has received on the sale by commercial firms of hearing aids.

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


Is the Minister aware that there appear to be some firms in Britain engaging in high-pressure sales techniques for hearing aids and directed principally at elderly people? Does he not think that, just as spectacles must be prescribed by an optician and dentures by a dentist, there is a strong argument for moving towards a situation in which those with some professional qualification are involved in the business of supplying hearing aids?

Indeed, I agree. I advise the hon. Gentleman to look at the work of the Hearing Aid Council and the code of practice which has been produced. We have received only three specific examples in the Department. If the hon. Gentleman has any which have been broueht to his attention, I shall be glad to ask the Hearing Aid Council Investigating Committee to look at them.

Fuel (Pricing)


asked the Secretary of State for Prices and Consumer Protection whether she is satisfied with the powers of her Department in controlling the pricing of fuel.

Yes. The Price Code applies to the production and sale of fuel in both the public and the private sectors. While we have no direct powers to control the price of fuel, the Government have asked the gas and electricity industry to restructure tariffs in favour of the smaller consumer and phase in increases with social security and pension upratings.

Is my hon. Friend able to do anything concerning complaints from consumers about coal merchants raising their prices by an unjustifiable amount? Does he not consider that it is rather unfair on consumers, particularly those with low incomes, that they have to bear the brunt of the withdrawal of subsidies from the nationalised industries and at the same time must suffer further increases imposed by coal merchants which appear to be out of proportion to the merchants' real increase in costs?

Yes, we share my hon. Friend's concern. We appreciate that all too often it is the poorest consumer who is the coal consumer. It is for that reason that only recently my right hon. Friend announced that the distributors' margins on coal are to be examined in one of the processes of special review undertaken by the Price Commission.

What part does my hon. Friend or his assistants and servants play in the committee which the Chancellor of the Exchequer told us just before the Easter Recess was to be set up to look after the interests of the poor in the matter of inflation? What representations did the Department make about the division in the electricity increases between the increase in the industrial tariff, which was very small, and the increase in the domestic tariff, which was very large?

We are represented on that committee and our aim has always been to protect the consumer as far as we can.

Petrol (Retail Margins)


asked the Secretary of State for Prices and Consumer Protection whether she will make a statement about her future intentions for legislation, following publication of the Price Commission's report on petrol retail margins.

I have not yet received the Price Commission's final report. The interim report published in March did not suggest grounds for legislation.

Does my right hon. Friend recollect that at the time of the November Budget garages and oil companies were saying that they had to have an increase on top of the VAT increase for their very survival? Has she noticed that we now have garages offering up to 6p a gallon discount and even sixfold stamps in some places?

Is my right hon. Friend aware that I am told by garages that they have been pressurised by oil companies to give these discounts? As they were very loud in asking for the last increase and as they can now afford to give large discounts, should not the Price Commission be asked to re-examine this whole question?

The Price Commission's interim report suggests that one of the reasons for price cutting and for the offer of stamps many times over —I take note of what my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Thomas) said—is mainly that a price war is going on in garages against a situation of falling demand. However, I add that in so far as this price cutting may be due to pressure from oil companies on solus tied garages this is a matter that I have asked the Director General of Fair 'Trading to look at again in connection with the report of the Monopolies Commission which concerned itself with solus trading.

Will the Secretary of State give an assurance that the Government will adopt no policies the object of which is to keep petroleum prices up?

The right hon Gentleman can accept our assurance on that. He will know that one of the reasons why my right hon. Friend withdrew the maximum prices order at the end of last year was that in the face of rising supplies there were indications that prices would fall rather than rise.

Food Prices


asked the Secretary of State for Prices and Consumer Protection what has been the change in the last three months in the price of imported foodstuffs; and what has been the change in the same period in the retail price of food in British shops.

Between December 1974 and March 1975 the unit value of imported food and feeding stuffs rose by 7 per cent. Over the same period the retail food index rose by 10·1 per cent.

Do not those figures show that the myth that inflation of food prices is caused either by overseas suppliers or by the Common Market can now be totally discarded and that indeed our inflation is entirely caused by the Government's own domestic economic policies and nobody else is to blame?

I am glad that the hon. Gentleman has recognised the minimal effect of the Common Market upon the direction of prices in this country. If what he is referring to is his traditional preoccupation with the money supply as a contributory factor to inflation, I would simply point out that on either definition the money supply is growing more slowly than the national income in money terms.

Is the hon. Gentleman satisfied with the sources of his statistics on retail prices? Is he aware that in my constituency of Romford a weekly shopping survey based on the local branch of the London Co-op and published in a local newspaper has shown that in the last three months a sample basket of 33 standard items has increased in price at an annual rate in excess of 50 per cent.?

I recognise that there are some variations, and it is partly with this in mind that my right hon. Friend has recently made a special reference to the Price Commission. Our own calculations are based upon figures provided by the Department of Employment which, I think, are highly reliable and are a better guide than selective localised information.

Has my hon. Friend seen the comments by Robin Pooley, the Vice-President of the EEC Beef Consultative Committee, that the cost of keeping the beef mountain is likely to be the

"biggest financial scandal of the century"?
If we want to try to keep down import prices, why cannot we do something about the ½million tons of beef which are now stored in the Common Market and are deteriorating rapidly?

My hon. Friend will know that one of the major successes by my right hon. Friend the Minister of Agriculture, Fisheries and Food in the renegotiations was in respect of the departure from the old system of intervention support to the new variable premium system. This is a most important return to the deficiency payment system which this country has operated effectively and which should preclude the likelihood of similar beef mountains being accumulated in the future. It is important to stress that the stocktaking of the common agricultural policy emphasises the Commission's view that these stockpiles in the future must be disposed of by means of selling in the Community and. if necessary, at subsidised prices for the benefit of consumers.

Consumer Affairs (Publicity)


asked the Secretary of State for Prices and Consumer Protection what information she provides in respect of the broadcasting of consumer matters.

My Department provides the fullest information to the broadcasting organisations and the programme companies as it does to all other communications media, and we arc grateful for the constructive use they make of it. We arc always glad to discuss with them any ideas for improvement.

Can the Minister say how he considers that our consumer programmes compare with the consumer programmes of the European Community and whether he thinks there is any help that his Department can give to increase the standard of our programmes to the standard of the best within the Community?

My impression is that the consumer programmes in this country are superior to those elsewhere, and we have sought to bring to the attention of the Commission recently the good work done in this country on this matter. The Consumer Information programme of the Community, however, has recently been approved by the Council of Ministers, and the Community is moving rapidly in the matter.

Will my hon. Friend look at the excellent consumer services provided by the London borough of Lambeth which makes it unnecessary for housewives to stay at home listening to the radio? All they have to do is to go to the appropriate department of the town hall where they can get all the information they want about everything.

I very much welcome the local initiative of the London borough of Lambeth and, indeed, of a number of local authorities. We fully recognise that the most helpful information is that provided locally, close to where people actually shop.

Trade Descriptions Act


asked the Secretary of State for Prices and Consumer Protection when she expects the review of the Trade Descriptions Act to be completed.

The interdepartmental committee which is reviewing the working of the Trade Descriptions Act 1968, under the chairmanship of the Director General of Fair Trading, will shortly publish a consultative document. The committee's report, which will take account of the comments received from a wide range of industry, trade and consumer bodies, is expected by the end of this year.

Does the Minister agree that at a time of rapidly rising prices there is potentially more confusion in special offers? Does he further accept that one of the greatest sources of confusion is the combination of coupons with special prices? Can he assure the House that this aspect will be given special attention and, one hopes, early recommendations?

Yes, I fully understand the difficulties to which the hon. Gentleman refers. Indeed, probing the work of price comparison, which is what the hon. Gentleman is concerned with, will be more effectively dealt with under Part II of the Fair Trading Act than under a revision of the Trade Descriptions Act. It could certainly be dealt with more quickly. I believe that the Director General will be coming forward with a consultative document in this sector in the near future.

In view of the outrageous claims made by the various Common Market organisations, such as the claim that the EEC keeps down food prices, would it not be a good idea to refer the EEC for investigation under the Trade Descriptions Act?

I am hardly answerable for all the claims made by either side, but I detect occasionally certain touches of extravagance, particularly from those opposed to the Market.

Retail Price Index


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.


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


asked the Secretary of State for Prices and Consumer Protection, what is the current rate of inflation, based upon a grossing-up to an annual rate of the last three months increase in the Retail Price Index.

The increases in the retail price index over the 12 months to March 1975 was 21·2 per cent. The change over the three months to March 1975, expressed at an annual rate, was 25·6 per cent.

Does the right hon. Lady agree that those figures indicate that the only effect of the elaborate mechanism of price control is temporarily to suppress the symptoms of inflation? Does she not now openly agree with what her colleague the Chancellor of the Exchequer said in many passages of his Budget Statement that the only long-term and effective way of controlling inflation is by controlling the supply of money?

No, I do not agree with that. What we can say clearly is that the annual rate of increase, where there are neither food subsidies nor a Price Code, would be about four or five points higher. It would not be responsible to allow that situation to arise. The hon. Gentleman would make a mistake if he were to put too much reliance on a three months' figure. As I said earlier to the hon. Lady the Member for Gloucester (Mrs. Oppenheim), in the three months to April 1974 which were indexed in that period part of which came during the administration of the hon. Lady's party and part during ours, the annual rate on a three-month basis was 26·7 per cent. while in the summer it fell to 8.4 per cent. It is a great mistake to base too many assumptions on those three months' figures.

Does my right hon. Friend agree that even on the figures put forward by Opposition Members the end of the Price Code would mean an acceleration of the inflation rate? Does she further agree that it ill behoves hon. Members opposite, who belong to a party which has no economic policy to speak of, to abuse the efforts of the present Government who are trying to combat inflation?

Yes, I accept that. It is true. We are taking steps to modify inflation so far as we can. It would be fair to add that the reasons for British inflation lie very deep in other spheres as well as in the increase in raw material prices, which have markedly slowed down. One cause is an increase in incomes. Ours is a low wage economy basically, and one reason for this is the failure over many years to invest adequately.

Why is our rate of inflation so much higher than that among our European partners—indeed four times that of Germany? Could it be that our European partners have competent Ministers prepared to exercise firm policies against inflation whereas the right hon. Lady's Cabinet colleagues have surrendered responsibility, decision-taking and sovereignty to the TUC?

That is a good political remark from the hon. Gentleman but it is a long way from the truth. One element of the truth was expressed in Sir Don Ryder's report about British Leyland, when he pointed out that car workers in British Leyland were using machinery far older than that behind any of their competitive workers in the countries of Europe. That also has a great deal to do with the current situation.

As we have now crossed the hyper-inflation threshold under the present Government, and as our rate of inflation is nothing short of a national disaster, if the right hon. Lady does not approve of the taking of three-month inflation rates, as she says, why did she and her right hon. Friend the Chancellor of the Exchequer at the time of the last election take a three-month inflation rate of 8·4 per cent—it now being nearly 300 per cent. higher? As a consequence, will the right hon. Lady rename her department the Department of Higher Prices and Consumer Deception?

The hon. Lady will recall, if she can remember that far back, that I based my remarks at the time of the election on the statement of the Price Commission, that statement being that in the summer the rate of inflation was running at approximately 12 per cent. I quoted that in my statement at Transport House, and it was absolutely accurate.

No responsible person on either side of the House, faced with the sort of inflation which we now have, should be unaware that this situation is to some extent within our control. I have already said that incomes, on the one side, and a failure to invest, on the other side, have a great deal to do with it, regardless of the Government's colour.

Will not falling bonus and overtime earnings and the rising level of unemployment mean that consumers' expenditure is likely to fall well behind the rate of increase in real earnings? Will my right hon. Friend therefore make sure that every pressure is maintained to keep down the cost of living so that there is not an undue deflationary effect?

What my hon. Friend says is well taken, but he will appreciate that it is important that the cost of living and the level of earnings should be kept broadly in line with one another in the situation which we as a country face, given our balance of payments difficulties. I assure my hon. Friend that it will be very much in our interests as a country to see the cost of living fall, and I have some reason to believe that that will happen towards the end of the year, assuming no increase in the rate of income supplements.

Price Commission Index


asked the Secretary of State for Prices and Consumer Protection what has been the increase in the Price Commission Index since November 1974.

The index for the period since November 1974 will not be available until the Price Commission's report covering 1st December 1974 to 28th February 1975 is published tomorrow.

As the Price Commission's last report confirmed that one man's pay rise is another man's price rise, and as wage rises over the past 12 months have averaged more than 30 per cent., how could the hon. Gentleman's right hon. Friend claim only six months ago, at the time of the election, that there was no evidence whatever of price increases stored up in the pipeline?

I think that the hon. Gentleman's supplementary question relates to a report not yet forthcoming. Therefore, it does not arise.

Director General Of Fair Trading


asked the Secretary of State for Prices and Consumer Protection if she will seek powers to alter the responsibilities of the Director General of Fair Trading in relation to his availability to the public.

No, Sir; but if the hon. Member has any particular problems in mind I shall be glad to consider them.

As it is important that the public should know that the Director General of Fair Trading has been appointed as the consumer's ombudsman, will the Minister ask him and his Office of Fair Trading to start a publicity campaign to encourage the public to approach him and his office direct if they feel that they have cause to complain in the matter of fair trading?

With respect, I think that that would be unhelpful, and I believe that the hon. Gentleman's own Front Bench would agree with the thinking here. Both Front Benches took the same view throughout the whole process of the fair trading legislation: that the räle of the Director General was to be at the top of a pyramid of a consumer advice service feeding processed information to the Government so that we could devise legislation. In other words, his is essentially a policy räle. Consumer protection for the individual should start at local level, and if we encouraged the public to do as the hon. Gentleman requests we should so flood the Director General with detailed cases that he would be unable to get on with his policy work.

Garages (Code Of Practice)


asked the Secretary of State for Prices and Consumer Protection what representations she made to the Office of Fair Trading regarding the discussions it is having with garages on a code of practice, following publication of evidence relating to malpractices in the trade.

I asked the Director General in August 1074 to take account, in his discussions with the motor industry on a code of practice, of the Automobile Association's findings that a high proportion of new cars are handed over to purchasers by motor dealers without adequate pre-delivery inspection.

I thank my hon. Friend for that reply. Did he see the report over the weekend that motorists are now spending more on their cars than the average owner-occupier spends in buying a house? In view of the increase in petrol and other motoring costs, is not the need for consumer protection for the motorist greater now than ever before? Did my hon. Friend see in the recent issue of the Consumers Association publication Motoring Which? that the person seeking service from a garage is not getting a fair deal—in fact, he is getting a raw deal—and that many cars are leaving garages in such a condition that they may well be involved in accidents because inadequate care is taken.

I saw those reports, and motor vehicles are among the goods about which we have most complaints in the Department, as I imagine my hon. Friend would expect. However, the Director General assures me that he is receiving co-operative assistance from this industry at present, and he has now issued a consultative document to the industry in the hope of establishing a code of practice. I hope that perhaps later in the year, or early next year, we may be able to produce something meaningful and helpful to the motorist.

Is the Minister aware that the survey to which reference has been made showed that two-thirds of garages were doing inadequate maintenance and one-third were doing dangerously inadequate maintenance? Is not this a matter of some urgency? Apart from a code of practice, ought there not to be some inspections by trading standards officers?

One has to have proper follow-up procedures and enforcement procedures if a code is to operate. However, as I said, in the summer of last year I asked the Director General to undertake an investigation, and he has assured me that he is receiving no obstruction from the trade asociations involved and none of them is in any way blocking or opposing his investigation. We must now, I think, use the existing machinery under the Fair Trading Act to allow the Director General to fulfil his commission.

Will my hon. Friend make representations to the Director General about the service industry sector, since in the absence of legislation—he must be aware of this—many service industries provide contacts with wide-ranging exclusion clauses which are a detriment to any legal action which subsequently occurs, this applying in particular to organisations such as travel firms, Laker, Pontins and so on? Will my hon. Friend make representations to ensure adequate consumer protection until we have legislation?

I doubt that that would necessarily produce worthwhile results either. As my hon. Friend is aware, the Law Commissioners are now in the process of completing a rather long-drawn-out inquiry into exclusion clauses in the service sector. Legislation has already been implemented in regard to goods. We expect that when the Law Commissioners produce their recommendations some time this year, they will, as previously, produce a draft Bill, which in turn will be the subject of consultation and then legislation.

Reverting to the question of garages, is my hon. Friend aware that it is not just the garages themselves which need investigation but their relationship with the oil companies and with the motor manufacturers? Does not my hon. Friend consider that the time has come for further investigation of the sort of tripartite system which exists in Sweden, for example, between the garages, the insurance companies and the State?

I am quite willing to consider the point which my hon. Friend puts.



asked the Secretary of State for Prices and Consumer Protection when she hopes to make public the consultative document concerning fireworks; and if she will make a statement.

Copies of the consultative document on firework safety have today been sent to all the bodies whom we know to be interested. They have been invited to submit views to my Department on any aspect of the sale and use of fireworks and the possible need for altering or extending the existing controls. Copies of the document have been placed in the Libraries of both Houses of Parliament and are also available on request to any other bodies or persons who may wish to comment.

I have not yet had time to study the document. Is my hon. Friend aware that only a small minority of nations have passed any fireworks legislation in the past 20 years and that we are functioning under the fireworks legislation of 100 years ago? We of all the civilised nations do what the uncivilised nations do. Is my hon. Friend aware that we have more accidents during the Guy Fawkes period than are incurred by any other nation? In view of this, will he be kind enough to give an assurance that he will receive a deputation of hon. Members and interested parties?

I am grateful to my hon. Friend for imposing upon himself the unusual constraint in this House of saying that he wants to read the document before seeking to comment on it. I trust that other hon. Members will do the same. I accept his point and I am sure that he will take as an indication of our good faith the fact that I announced the intention of producing this consultative document literally within days of my Department's assuming responsibility for safety. I appreciate my hon. Friend's comments about the number of accidents and I would welcome deputations consisting of Members from either side or both sides of the House if hon. Members wish to discuss this matter with me.

Will the Minister confirm that there has been a welcome improvement in the accident record? Can he say whether the manufacturers would agree to an age limit on sales, and will he assure the House that there will be the fullest consultation before any changes in regulations or legislation are introduced?

There will certainly be the fullest consultation. I think the hon. Member will find that the document and the covering letter 1 have sent with it show that we are quite willing to look at any possibility which, if practical and sensible, will ease the situation and reduce the number of accidents. The decline in accidents is most encouraging. Last year the decline in total accidents and in serious accidents was approximately 25 per cent., but of course we should like the level to be even lower.

Will the Minister assure us that the time taken in consultations will not be simply an excuse for yet further delay before a decision is finally made?

The hon. Lady amazes me. In all the time that the Conservatives were in office, no meaningful moves were made on fireworks legislation. Within days of assuming responsibility I took action, and now she is accusing me of dilatoriness. I shall make sure that there is no unnecessary delay. We have put a time limit on the consultation and ask for all reports to be made to me by 16th June.