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Household Articles

Volume 893: debated on Monday 16 June 1975

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asked the Secretary of State for Prices and Consumer Protection if she will make a statement about the results of her voluntary agreement with retailers and manufacturers to restrain the prices of certain essential household items.

The voluntary agreement covers two lists of goods: one of items which retailers keep on continuous offer, and the other of items on which manufacturers concentrate their promotional price-cuts. The combined price of the retailers' items increased by 19·6 per cent. between May 1974 and April 1975, and that of the manufacturers' items by 22·4 per cent.; together they rose by 20·1 per cent. In the same period the retail food index rose by 25·1 per cent., and the index for manufactured foods by 34·6 per cent.

I am glad to hear of that progress, but does my hon. Friend agree that this is an area of price restraint in which the housewife does not understand the system, and that on occasion it can be counter-productive, because she soon forgets the cut in prices at the beginning of the special offer period but remembers the often steep rise in prices at the end? Therefore, could any indication be given of total savings to the consumer as a result of the agreement? In any renegotiation of the agreement, will my hon. Friend try to improve the public's understanding of the system?

The saving is between 5p and 6p in the pound. I fully appreciate the point that my hon. Friend makes. It is difficult for consumers to appreciate that they are continually receiving this marginal benefit from the existence of the voluntary agreement. We are discussing what price control, and so on, is to follow at the end of the voluntary agreement, or whether the voluntary agreement is to continue.

Will the Minister give an assurance that in his efforts to continue voluntary agreements with retailers he will explore all possible means of ensuring that small self-employed shopkeepers are fully represented in the negotiations?

We shall do what we can to ensure that that is done. We fully appreciate the importance of the small shopkeeper, particularly to those confined to shopping in a limited locality, such as the elderly.

When the Department has this relative success with private industry, why is it so clearly unable to have any success with the publicly-owned industries, particularly electricity and gas, in keeping down the cost of their products to small consumers—for example, the cost of consuming electricity through a prepayment meter and the cost of consuming small amounts of electricity and gas? When the Department is having this success with the private sector, why cannot it achieve the same success with the industries owned by us and controlled by my right hon. Friends and the House?

I congratulate my hon. Friend in getting his speech in early. There is a subsequent Question on this subject on the Order Paper.

Reverting to the question asked earlier by the hon. Member for Liverpool, Walton (Mr. Heffer), does the Minister agree that even if the voluntary agreement is not renewed there is no point in using Section 2 of the Prices Act for a total freeze? To do that when underlying costs are rising would simply be further to lower investment and increase unemployment. Will the hon. Gentleman give an assurance that the Government will not impose a total freeze?

The Opposition call on us to take action to curb prices and then spell out their opposition to every option. We are willing to consider all options constructively.