asked the Secretary of State for Prices and Consumer Protection what specific measures, if any, he proposes to bring forward in order to carry out the commitment in the Queen's Speech to attach high priority to safeguarding the interests of the consumer.

My Department safeguards the interests of consumers over a broad front. We shall continue to apply and develop policies on price control and on the maintenance of competition, as well as encouraging the adoption of other measures to assist consumers, such as the provision of consumer advice centres and local price surveys.

The whole House will be pleased that the Secretary of State protects the interests of consumers, but will he explain how he came to promise consumers an 8½p reduction in the price of a loaf of bread when it transpired that such a reduction, first, was untrue, second, would ruin all small bakers and, third, would accelerate a number of strikes which we could well do without?

Neither I nor any member of my Department ever promised an 8p or 8½p reduction. [Interruption.] If the hon. Gentleman who is making noises which I take to mean dissent has any evidence to the contrary, I hope that he will supply it. What my Department said, and what I stick to absolutely today, is that, as a result of the scheme I announced a week ago, in some shops after 3rd January bread will be cheaper than it would otherwise have been. If the hon. Member for Isle of Ely (Mr. Freud) or the hon. Lady the Member for Gloucester (Mrs. Oppenheim) and her hon. Friends believe that I should continue to keep bread prices artificially high, they had better say so.

Will my right hon. Friend take it that at a time of inflation the need for consumer protection is greater than ever and that the action already taken by the Government in protecting the consumer is well worth while? Will he encourage the advice centers which have been set up and which are giving very good advice to consumers in various parts of the country, and will he consider other legislative measures to ensure that the housewife gets full value for what she spends?

I am grateful for what my hon. Friend says, and I shall certainly do my best to respond to his suggestion. As he knows, despite the financial stringency of the period ahead, I have told local authorities that money will be available next year for the continuation of consumer advice and consumer surveys. I believe that they are of vital importance to consumer protection work, but, unfortunately, we see that some Conservative-controlled local authorities do not intend to pursue that sort of protection. Again, I offer the hon. Lady the Member for Gloucester the opportunity to tell us whether she believes that Conservative local authorities should do that or whether they should abandon that attitude.

Perhaps the right hon. Gentleman could tell us where the idea of 8½p off a large loaf came from, in view of his reply to the hon. Member for Isle of Ely (Mr. Freud). Is the right hon. Gentleman aware that this has given a lot of concern to a great many people and that only today, I believe, Sainsbury's unofficially announced that the most that anyone could expect off the price of a loaf of bread will be 1p, and this only in some shops and only for some consumers?

If that is what Sainsbury's has announced, it is something of an achievement that since we have removed ½p subsidy the bread price has come down. Secondly, it is exactly consistent with what I said a week ago and what I said a few moments ago. As for where the idea of the 8½p came from, I think that I can help the hon. Gentleman. He will see that the table is a sliding scale. Clearly, therefore, as the table must be boundless at either end, it has to include that figure. But the idea that I said it, that any of my Ministers said it or that any member of the staff of my Department said it is quite wrong. Indeed, if the hon. Gentleman, who, I know, is assiduous in these matters, had been listening to the radio on Monday afternoon when I was asked about the size of reductions, he would know—I have the transcript—that I said, as I said also in my Press conference in the morning, that I could not possibly put figures on it. It was the market operating; I believe that the market had to operate and had to determine what the price would be.

Is it not an extraordinary coincidence that every news commentator came forward with the figure of 8½p? Does not the right hon. Gentleman have the unique distinction of having alienated both the baking and the retailing sides of the industry, having caused a major confrontation between two unions, having deceived consumers as to what the reduction was likely to be, and having disguised from consumers the fact that some of them will be paying more for their bread as a result of his manipulation? Finally, is he aware that as a result of his high-handed and arrogant way of dealing with this matter he will go into the next round of pay negotiations as a Minister who is not trusted by industry, not trusted by the unions and not trusted by consumers?

I hope the hon. Lady feels that that was worth all the preparation. I have told her categorically that I did not say, and neither did anyone else in my Department say, that there would be a specific reduction in the price of bread. Since she has continued to assert the contrary, since she has my assurance about it, and since I can provide her with a great deal of evidence to substantiate what I say, if she did the proper thing she would withdraw the allegation, although I have no doubt that she will not do so. I assure the hon. Lady that I have some pleasure in knowing that, even according to the evidence supplied by her hon. Friend the Member for Altrincham and Sale (Mr. Montgomery), what I said last Monday is true. As a result of decisions which the Government took, in some shops bread will be cheaper than it would otherwise be. That seems to be absolutely my duty, and I am glad that I have continued to perform it. [AN HON. MEMBER: "How much?"] The hon. Gentleman, who obviously has not listened to anything I said, asks "How much?" Let me tell him again. It will be cheaper according to the way the market operates. As he and, no doubt, Professor Milton Friedman understand, one cannot predict the operation of the market.

asked the Secretary of State for Prices and Consumer Protection if he is saisfied with the operation of the Price Code.

The Price Code has now been in operation for nearly four years. Despite amendment and revision, it grows increasingly difficult to judge commercial performance against the criteria stipulated in the code. However, I am broadly satisfied with the operation of the code as part of the current prices policy.

Still on the question of bread prices, does not the right hon. Gentleman concede that to have created such confusion in the minds of housewives and to have succeeded in interrupting supplies of bread over the weekend indicates the difficulty involved in any ministerial intervention in the operation of prices? Will he now make absolutely clear at what price the housewife can expect to purchase a large loaf in supermarkets in 1977?

Time does not allow me to explain the bread scheme to the hon. Gentleman, but let me at least tell him that what I decided last Monday was not further Government intervention in the bread market but a withdrawal of Government intervention. The complaint of many of the people who are complaining—notably the trade union, which I am sure will be grateful for the support of the hon. Gentleman and the hon. Member for Gloucester (Mrs. Oppenheim)—is that I am not intervening sufficiently. I have made it perfectly clear to the bread industry that if the industry as a whole wants it, nothing would give me greater pleasure than to withdraw altogether. The industry tells me that it does not want such a policy. As it is, I have improved the aspects of competition within the industry. I can only repeat that, as it is competition that will determine the price, it is not possible for me to predict what the price will be.

Will my right hon. Friend bear in mind that in no circumstances should he accept advice from the Conservative Front Bench on possible future negotiations with the TUC on such questions, because when the Conservatives were in office their negotiations led to the three-day working week and the chaos that followed? If he took their advice, their next achievement would be to see that the nation was put on black bread. Will my right hon. Friend assure us that that will not happen?

I told the TUC, as I told other interested parties, what I proposed to do over bread prices. They agree with me—though the hon. Member for Gloucester does not, and is now on record that she does not—that it was intolerable for the Government to keep the price of bread artificially high. I am sure that I was right to stop doing that.

May I ask the right hon. Gentleman another question about the Price Code, concerning the announcement by the Chancellor of the Exchequer last week of a gas price increase from April 1977? I believe that that increase includes a repayment of capital, which is not allowable under the code. Does the Secretary of State intend to amend the code? If not, how else will he approve the increase?

I do not propose to amend the code. When the increase comes forward from the Gas Council on behalf of the boards, it will be submitted in the proper way to the Price Commission. If the Commission believes that the increase is not acceptable under the code, it will say so publicly. There is provision for the Government to proceed notwithstanding that decision, if necessary. But there will be no revision of the code, nor any subterfuge. The Commission will behave in the normal way.

asked the Secretary of State for Prices and Consumer Protection when he next expects to meet the EEC Commissioner with special responsibility for the protection of consumer interests.

asked the Secretary of State for Prices and Consumer Protection what recent discussions he has had with his EEC colleagues about proposals for increasing protection for the consumer.

I have recently met Commissioner Gundelach, who has responsibility for the internal market and as such is closely involved with many issues affecting consumers. The present Commissioner responsible for consumer affairs will be leaving shortly and my right hon. Friend and I would welcome the opportunity to meet his successor. I met Madame Scrivener, the French Minister for Consumer Affairs, when she visited London earlier this year at the invitation of the British Government, and my hon. Friend the Under-Secretary of State regularly attends Agriculture Council meetings.

Will the Minister confirm that our friends in Europe appear to be protecting British consumers' interests by subsidising our food prices to the tune of about £1 2/4 million a day? Does he think that that is a good thing? If so, how does he reconcile that with the Government's accelerated phasing out of our own food subsidies?

One welcomes the fact that we receive a subsidy of those dimensions under the European arrangements. I do not think that there is anything inconsistent between the receipt of those moneys from Europe and the phasing out of food subsidies on a domestic basis as part of an economic strategy.

Is my hon. Friend aware that the EEC and its Commission have a very biased policy in favour of the producer? Will he take advantage of the change in Commissioners to see that the voice of the producer is heard and that there is a proper balance for the first time on behalf of the consumer, changing the EEC's present bias in favour of the producer?

I think that my hon. Friend means that he wants to change the bias in favour of the consumer rather than the producer. It is clear that the common agricultural policy has very much favoured the producer and has paid insufficient regard to the views of the consumers of food. The Government have never disguised the fact that they are dissatisfied with the way in which that policy has worked. I hope that the House will be reassured by the fact that my hon. Friend the Under-Secretary attends Council meetings to put forward the consumer point of view.

Does not the Minister agree that, far from the Common Market's subsidising British consumers, the argument is the other way round? Is he aware that in 1975 we could have purchased the same volume of food on the world market for £800 million less than we paid because we are a member of the Common Market? Therefore, in spite of the so-called subsidy of £350 million that we receive from the EEC, surely we are subsidising the Common Market at the end of the day.

It would be dangerous to try to draw conclusions at the end of 1976 from the situation in 1975. Whilst cheaper food might be available without tariffs if we were not members of the Common Market, that fact is probably balanced by the amount of subsidy we receive from Brussels. That does not mean that one is complacent about the present situation.

asked the Secretary of State for Prices and Consumer Protection if he will make a statement on the practice of credit card companies preventing garages from giving discounts to cash customers.

Over the past few months, credit card companies have been taking action against traders who are not prepared to abide by the terms of their agreement with the credit card companies and sell petrol on credit cards on the same terms as sales for cash. However, I understand that the Director General of Fair Trading is considering a number of subjects for possible references to the Monopolies and Mergers Commission, amongst which are the services provided to credit card franchise holders, including garages. I have drawn my hon. Friend's interest to his attention.

I thank my hon. Friend for that reply. Will he ask the Office of Fair Trading to take urgent action on the matter? Does he realise that there is a jungle in garage forecourts, where different customers are charged different prices, varying from one garage to another? Will he ensure that the consumer is protected in this regard and that he buys petrol at the lowest possible price, without all the variations in price and trading stamps, without credit card holders being denied concessions and without the other present differentials?

I am most anxious that the information available to motorists when they buy petrol should be the maximum possible. I do not think that one can regulate by law, or should try to do so, all the offers made by garages. I hope, however, that the offers will be made in a much simpler way so that customers can receive the most benefit from competition.

Should not the Minister tell his hon. Friend that he had his Question entirely the wrong way round? The credit companies insist that a fair discount should be given to those who buy by cash or credit.

I am not taking a view on the matter, although I welcome the fact that the Director General of Fair Trading will examine the matter. The credit card companies will not allow a discount to be given only to the cash customer, and threaten to withdraw the franchise if this happens. I think that the views of both cash customers and credit card holders need to be looked at.

asked the Secretary of State for Prices and Consumer Protection whether he will seek powers to require petrol stations to display the actual price at which they are offering petrol. instead of advertising reductions per gallon without showing the maximum price.

asked the Secretary of State for Prices and Consumer Protection if he will seek powers to compel petrol stations clearly to advertise the full price of petrol on their forecourts.

asked the Secretary of State for Prices and Consumer Protection what action he proposes to take to improve the display of prices of petrol.

If the voluntary agreement on the display of petrol prices does not become more widely observed, we shall have to take further action. I am considering carefully whether the statutory powers to improve price display under the Prices Act 1974 ought now to be used.

Does the hon. Gentleman realise that that is quite unsatisfactory? Surely he is not satisfied with the present situation, where we are told that we get 8p, 9p, 10p or 11p off but probably pay the same price in the end. Surely he will take action to put the matter right. The present situation is misleading to say the least.

I agree wholeheartedly with the hon. Gentleman that it is misleading and requires action to be taken. The only reason for delay is that a voluntary agreement was reached between the oil companies, the petrol retailers and the Director General of Fair Trading. We thought it right to give the agreement a chance and to see whether it would work. From the volume of complaints from members of the public and the correspondence received, it can be seen that the agreement is not thought to be working properly. That is why I shall take further action.

Will my hon. Friend accept that I take some encouragement from his reply? Bearing in mind the report of the trading officer in Enfield, does he accept that the voluntary agreement is worthless in terms of tackling this problem? Does he not now have sufficient evidence to propose the legislation which is quite clearly necessary?

Yes, I have had reports from trading standards officers throughout the country, including Enfield. I am awaiting further reports. As soon as I have been able to consider all the evidence, I shall put proposals before the House.

Is the hon. Gentleman aware that it is very nearly two years since he or his predecessors gave exactly the same evasive answers to very similar questions? All that the general public want from a filling station is to know the price of petrol and, if necessary, what added incentive there is to that price. Surely that cannot be difficult.

I very much welcome the support that is coming from all parts of the House for taking statutory action.

asked the Secretary of State for Prices and Consumer Protection what is his latest estimate of the rate of inflation during the year ending 5th April 1978.

I refer the hon. Gentleman to the answer my right hon. Friend the Chancellor of the Exchequer gave to the hon. Member for Romford (Mr. Neubert) and my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) on 16th December.

Does the right hon. Gentleman recall the letter of 18th December 1975 written by his right hon. Friend to the Chairman of the IMF, in which he said that by the end of this year inflation would be down to below 10 per cent.? Will he tell the House when the Government expect that that aim will be achieved?

I told the House a month or five weeks ago of the factors that had prevented that from coming about. What I am sure of is that the more patriotic Members will attempt to secure that end rather than carping about it.

Is it the policy of Her Majesty's Government this year, or even next year, to stop inflation or merely to diminish the rate of inflation, an ambition that is scarcely comprehensible?

I think they would be a very ambitious Government and a very ambitious Minister who thought that inflation could be stopped over a period of years or months without any increases. What the Government intend to do and will do is substantially to diminish the rate and eventually to bring it down to the rate which has been suffered or enjoyed by our industrial competitors.

Does the right hon. Gentleman recall and, indeed, support the claim made by his right hon. Friend the Chancellor of the Exchequer that between February 1974 and October 1974 the then. Labour Government had reduced inflation to 8·4 per cent.? If he supports that, why is it that the capitalist countries of West Germany and America, from which the Government are trying to borrow money, have decreasing rates of inflation while the Socialist Government with whom we are lumbered are still creating rising inflation?

I can recall that claim because the hon. Gentleman refers me to it at almost every Question Time. It was a reasonable prognosis to make on the evidence available at the time, but there have been a number of factors—I for my part am prepared to take responsibility for some of them—that have prevented us from achieving that aim. However, our intention is to achieve it, and the painful measures that we announced six days ago are one of the steps towards that achievement.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I give notice that I shall raise the matter on the Adjournment.

asked the Secretary of State for Prices and Consumer Protection how much the retail price index has risen since February 1974.

asked the Secretary of State for Prices and Consumer Protection what is the latest year-on-year figure for the percentage increase in the retail price index.

The retail price index rose by 63 per cent. Between February 1974 and November 1976 and the year-on-year increase recorded in the November index is 15 per cent.

Will the right hon. Gentleman tell the House whether that answer is more unpatriotic than the Chancellor's claim in October 1974? Will he tell the House when the country can expect the Government to accept that their policies from February and October 1974 have failed? Will they take the credit for admitting that as a Christmas present to the nation?

I do not think that facts are unpatriotic. My answer was devoted to facts. It is a certain attitude that is unpatriotic, and a good example was the attitude adopted by the Opposition last Wednesday.

Is my right hon. Friend aware that his answer is extremely depressing? Is he also aware that many of us believe that the situation might have been different if we were not in the Common Market, since food prices on a world scale have fallen and we are paying artificially high prices for food in the Common Market? Is it not time that we did something about renegotiating the common agricultural policy?

There are essentially three elements in my hon. Friend's question. I agree that the figures I have given are depressing. They are as depressing to me as they are to him. I talked a moment ago about blame and responsibility. I hope that I implied by those remarks that I understand very well that we have an obligation to get the economy into such shape that such figures do not continue into next year and the year after. My hon. Friend and I have no disagreement about the depressing nature of the figures I have given.

Will the right hon. Gentleman tell us what assessment his Department has made of the extent to which the present excessively high interest rates are contributing towards inflation? Will he tell the consumer what he is having to pay as a consequence of the need to finance the Government's excessive borrowing requirement?

It is impossible to make that sort of statistical assessment. We do not know for how long the high interest rates will continue. I am sure that the hon. Gentleman, like me, welcomed the sign of their reduction last week, but, putting statistics aside, he and I are agreed that the industrial as well as the consumer interests of Britain need lower basic interest rates. The Chancellor made this point explicitly last Wednesday. He made it clear that one of the purposes of his measures was to avoid having so high a minimum rate. I hope that it can be reduced in the not-too-distant future.

How much weight is given to petrol prices in the retail price index in view of the fact that the Department is still collecting reports on petrol prices throughout the country? How can the Department arrive at an accurate figure for the effect of petrol prices on the retail price index?

My hon. Friend has asked a complicated statistical question and I hope that he will accept a rather crude statistical answer. My right hon. Friend the Secretary of State for Employment has statisticians within his Department who are considering a number of typical shopping baskets which, despite the mixed metaphor, contain petrol. From those shopping baskets he is able to conclude what changes have taken place in the retail price index.

May I put a simple statistical question to the right hon. Gentleman to make him even more depressed? Will he confirm that in only one month out of 33, despite the boasts of himself and the Chancellor, have the Government managed to halve the rate of inflation, and that in only one month out of 33 have they managed to bring down the rate of inflation to the rate that was inherited from the previous Conservative Government? Will he confirm that inflation has risen in each of the past four months and that it is not on a plateau, as he and the Chancellor have claimed, but is rising again sharply and disastrously?

The hon. Lady depresses me, but not for quite the reasons she imagines. She is right that the reduction in the inflation rate is not what we would hope. I do not balk at that fact, but it is substantially lower than it was last year. When my right hon. Friend the Chancellor of the Exchequer and I talked about a plateau, we were careful to say that the figure would hover around 15 per cent. That seems to be right. We are hovering at that figure, and I believe that we shall begin to see a reduction some time next year.

asked the Secretary of State for Prices and Consumer Protection when he next plans to discuss prices with the TUC.

I intend to meet TUC representatives again shortly as part of my continuing discussions with them about prices policy.

Is the abolition of the Price Code an option that the Government are retaining in any discussions they may have about a possible further stage in wages policy in the summer?

It is an option we can hardly avoid. Most of the legislative powers under the Price Code run out in the summer, and the three options we possess are to offer legislation to the House to renew it, to abandon a prices policy or to have a different one. Since the Prime Minister and others, including myself, have ruled out the second option—namely, that of having no price policy at all—we are left with the choice between a Price Code to be offered again to the House and a new prices policy. I hope to make an announcement on that subject in the new year.

In view of the fact that the trade union movement has given tremendous co-operation to the Government in respect of the social contract in restraining personal incomes, which has assisted a great deal in preventing inflation going higher than it is, will my right hon. Friend examine the TUC's proposals in respect of economic and industrial strategy, since co-operation is essential if we are to prevent prices going higher and if we are to have a more constructive approach to the problem than we now obtain from the Opposition?

The TUC and trade union members throughout the country have made an enormous contribution by accepting the pay policy, which means that they have made personal sacrifices. I hope that we can continue to rely on that support during the coming year. We must convince them that we are operating relevant and realistic economic policies on a wide variety of subjects. I shall try to convince the TUC of that fact in initiating my new prices policy.

As the right hon. Gentleman has announced that the rate of inflation will fall to 15 per cent. in the last quarter of next year, will he say how prices will hover in the meantime?

It is never wise to make predictions round about or within 1 or 2 per cent. I stick by what I have said in the last three months. We are on a plateau, and prices will hover around 15 per cent. and there will be a reduction some time next year. It would be foolish to attempt to be more precise than that.

When the right hon. Gentleman next meets the TUC and discusses prices, will he bear in mind that a large number of trade unionists do not like price freezes, particularly in the nationalised industries? Will he confirm that it is no part of his intention to reintroduce a price freeze in those industries?

The problem in terms of nationalised industry prices which the consumer has suffered in the last two and a half years flows from the fact that the freeze was applied by the Conservative Government. We have had to negotiate ourselves out of that difficulty. Two things must happen with regard to nationalised industry prices. First, they must be realistic in terms of the efficiency of the industry, and, secondly, they have to pay proper respect to the other needs of the economy with an adequate prices policy in the general fight against inflation. I think that on balance we are coping with those considerations much better than did our predecessors.

asked the Secretary of State for Prices and Consumer Protection when he next plans to discuss prices with the Food and Drink Industries Council.

I last met the FDIC for this purpose on 10th December. I shall no doubt be doing so again from time to time in the future, though at the moment there are no firm appointments.

I thank the right hon. Gentleman for that reply. Will he confirm that it is no part of his intention to treat the food industry separately from any other industry and will treat it as another most important consumer industry? Is he aware that interference in the baking industry has had a profound effect on morale in the food manufacturing industries as a whole? Will he please take note that this kind of manipulation of his powers, with maximum price orders and discount structures, tends to worry those who operate in a very competitive industry?

On the general question, the food industry is as much a part of the British economy as is any other sector. On the high level of employment and in respect of the need for high levels of investment, I must emphasise that the industry is not being picked on. As regards bread, when I met the representatives of the Food and Drink Industries Council, among their number was Mr. Theo Curtis, Chairman of the Federation of Bakers. If Mr. Curtis asks me to remove all controls from the bread industry I shall do so. My difficulty is that some authorities which have been quoted against me have been the most vocal in the industry with demands that I should continue to participate in the industry. They have been urging me to extend controls over the industry rather than to withdraw them.

If the Minister did not suggest that the price of bread should be reduced by 4p a loaf, why did he not deny that suggestion immediately?

I do not believe that it is my job to deny something I have never said. If the hon. Gentleman does not believe what I told the House, I shall not condescend to contradict him yet again.

asked the Secretary of State for Prices and Consumer Protection if he will list the percentage increases in average retail forecourt petrol prices in 1974, 1975 and to the latest available date in 1976.

The approximate increases were 75 per cent. in 1974, 5 per cent. in 1975 and 2 per cent. in the first nine months of 1976.

Does the right hon. Gentleman agree that the average trend will be £1 per gallon in a year's time? What will the Government do to prevent that or to delay it?

I do not agree with the hon. Gentleman. The increase in the price of petrol has been substantially below that of inflation generally.

asked the Secretary of State for Prices and Consumer Protection what foodstuffs are at present covered by food subsidies; and if he will make a statement about future arrangements.

The foods currently subsidised are milk, butter, cheese, bread and flour. As announced last week, the butter subsidy will be abolished, the cheese subsidy will be reduced on 28th December and the remaining subsidies will be phased out over the coming months.

Will my right hon. Friend say what representations he has received to date from the TUC about accelerating the phasing out of food subsidies? Will he also say what will be the effect on the RPI of the phasing out of such subsidies, particularly in respect of elderly people, bearing in mind that the fundamental shortcomings of the CAP are having a distinctly adverse effect on such people who, as a result of that policy, face mounting food bills?

I have had no direct meetings with the TUC, although in its statement last Wednesday it showed a general understanding of the Government's overall economic position. The statement said that the TUC would regret the phasing out of food subsidies. I knew that and I understood it well. At a time when there needed to be substantial reductions in public expenditure, I took the view that there were many other candidates for cuts which I could justify much less easily than I could reduce in subsidy terms.

Order. Christmas comes at the end of this week, and there is no sense in the right hon. Gentleman giving such long answers.

On the subject of food and drink, and slightly switching the subject, will the right hon. Gentleman explain why the commodity of coffee is being referred to the Price Commission? Is he aware that 90 per cent. of the cost of manufacturing instant coffee relates to coffee beans, purchased on world markets? Will the inquiry have more to do with retail margins? I have one coffee manufacturer in my constituency, and I would only add that I certainly do not want any more unemployment in my area.

The inquiry will be into all the reasons for the increase and it will take place because consumers have shown great concern on this issue. One of my duties is to demonstrate why prices are going up as well as to demonstrate sometimes that they should not.

asked the Secretary of State for Prices and Consumer Protection what is his most recent estimate of the effect of the devaluation of sterling during 1976 on retail prices in 1976 and the first six months of 1977.

asked the Secretary of State for Prices and Consumer Protection by how much the devaluation of the £ sterling, since October 1974, has affected food prices.

Estimates of this kind are always subject to considerable uncertainty. But depreciation over the 11 months to November 1976 might be expected to have increased the retail price index by about 3 per cent. by the end of this year and by a total of about 5 per cent. by the second quarter of 1977.

Does not the right hon. Gentleman think it tragic that the international loss of confidence in this Government has led to such a decline during 1976 in the value of sterling, which in turn has led to a further rise in the retail price index? To what extent does the right hon. Gentleman expect the trend to continue next year?

Of course I think that the sterling depreciation, which has had the results that the hon. Gentleman describes, is tragic. I doubt whether I would quote the same causes for that depreciation as would the hon. Gentleman. As to the future, the Chancellor of the Exchequer made clear a week ago that we believe that the measures we then took have halted the depreciation of sterling, which was one of their principal intentions. I am sure that it will succeed.

Since all three major postwar devaluations have taken place under Labour Governments, and since the Secretary of State admits that devaluation of the £ sterling increases food prices, does he not agree that the obvious and logical corollary is that Labour Governments result in higher food prices?

The hon. Gentleman is making a well-known philosophical error, which I would explain to him were Mr. Speaker to allow me to give longer answers.

Does my right hon. Friend remember that during and before the referendum debate many of us on the Labour side of the House argued that prices would rise substantially if we remained in the Common Market and that the pound would suffer as a result? Does he also recall that he was one of those who went round the country, with others from the Opposition, and said on public platforms that we would benefit as a result of remaining in the Common Market? Will my right hon. Friend, as shortly as possible, apologise from the Dispatch Box?

I would do so, perhaps not shortly, if I thought an apology were necessary. I stick by my original contention that the economic difficulties that this country has faced since June 1974 would have been substantially greater had we been outside the Common Market.

asked the Secretary of State for Prices and Consumer Protection whether he now has a firm date for the target for reaching single-figure inflation; and if he will make a statement.

I cannot add to what my right hon. Friend the Chancellor of the Exchequer said in reply to the hon. Member for Romford (Mr. Neubert) and my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) on 16th December, when he made it clear that, given the continuing moderation in the increase in wage costs, the rate of price inflation should start falling again next summer.

Does the right hon. Gentleman admit that that answer shows the massive failure of earlier Government policies to achieve their objectives? Is he also aware that an earlier answer he gave about prices hovering around 15 per cent. and then coming down next year below the level of this year contradicts what the Chancellor said in last week's statement, when he said that the RPI would rise above 15 per cent. next year before it came down to that level at the end of the year? Bearing in mind past errors, can the right hon. Gentleman say whether his forecasts now take into account the probable increase in VAT in April, having regard to the Chancellor's declared objective of getting direct taxation down without any increases in expenditure?

Order. My remarks earlier about long answers apply also to long questions.

I do not think that there is any inconsistency in what the Chancellor and I said. "Hovering" means hovering up occasionally as well as hovering down. Of course, no one has ever tried to deny that the progress of our economic policy has had some difficulties.

That will be in "Quotes of the Week" in the Observer.

We are doing things now which are painful but necessary. The hon. Gentleman will understand that, whatever the Chancellor has decided for the Budget of next April, he has not told me, and even if he had I would not tell the House.

May I congratulate the Secretary of State on his command of the euphemism? May I ask him to confirm or deny that, on the basis of the Chancellor's latest figures, prices will have risen by the end of 1977, since the Government came into power, by 86 per cent., of which 30 per cent. is due to the slippages in forecasts that have taken place since the Government embarked upon their attack on inflation? Is it not correct to say that this will cost the average family an extra £16 a year by the end of next year? If the right hon. Gentleman cannot confirm this, will he give the alternative figures?

The hon. Lady told the anxious world through the Daily Mail this morning what question she was to ask this afternoon. I had my Department look at it. It thought that it was unwise to make such arithmetical progressions, but as regards whether there was any wisdom in such a method it tells me that the hon. Lady was arithmetically wrong. As for her second question, I do not think prices can have gone up because of slippages in forecasts. Slippages in forecasts do not change anything. They are simply what is written on a piece of paper.

asked the Secretary of State for Prices and Consumer Protection what proposals he has for implementing the remainder of the Consumer Credit Act.

asked the Secretary of State for Prices and Consumer Protection when he proposes to make regulations to enable consumers to ask the courts to reopen cases of unreasonable credit bargains.

asked the Secretary of State for Prices and Consumer Protection whether he will now make a statement on the right of access by consumers to credit reference agency files on themselves.

I expect to make regulations and an order early in 1977 which will prescribe the content and method of calculation of the rate of total charge for credit and which will determine which agreements are to be regulated by the Consumer Credit Act 1974. At the same time, I intend to make an order and regulations which will bring into operation the provisions relating to credit reference agencies and extortionate credit bargains and which will start the second tranche of licensing. I hope to make the regulations relating to advertising and seeking business later in 1977. Other provisions will be made effective after this.

While I warmly welcome such progress as has already been made, may I ask whether my hon. Friend does not agree that the time will soon be opportune to activate those parts of the Act dealing with misleading advertisements in connection with credit bureaux and agencies? Is it not of great importance to many people that the true rates of interest which are being charged should be made patently clear to all? Does my hon. Friend realise that we are anxiously waiting for something to be done?

It will not be possible to deal with the "truth in lending" regulations for advertising in the context of agreements until we have the second round of licensing under way. While I agree with my hon. Friend in principle, I can tell him that it is much more difficult in practice to devise simple regulations aimed at providing simple information. There are difficulties about specifying an effective rate of credit in regulations.

Will my hon. Friend confirm that after he has made the new regulations, which will be greatly welcomed, it will be possible for individuals to get all the information held on files which concerns themselves? Will they also be able to get information about companies from those files?

Broadly speaking, they will be able to get information about themselves except where access to a file might reveal confidential information about other people.

asked the Secretary of State for Prices and Consumer Protection what is the increase in the retail price index over the last three months, expressed at an annual rate.

The RPI has increased by 19·7 per cent. over the past three months, expressed at an annual rate.

After giving those rather depressing figures, does the Minister think it makes any sense to force up the price of gas, as the Chancellor announced in his recent statement?

The extent to which the price of gas might rise following my right hon. Friend's statement is not known at this stage.

asked the Secretary of State for Prices and Consumer Protection what measures he proposes to introduce to safeguard the interests of consumers, in implementation of the undertaking given in the Gracious Speech.

I would refer the hon. Member to the reply I gave earlier today to the hon. Member for Isle of Ely (Mr. Freud).

asked the Secretary of State for Prices and Consumer Protection what is the effect of food subsidies on the retail price index at present.

The estimated saving on the RPI is 0·7 points or 0·4 per cent.

Is the Minister aware that last week food subsidies were reduced by almost exactly the amount which the Opposition urged they should be cut in July, when the Government voted in favour of keeping them at a higher level? Is there, perhaps, a ray of hope in that it has taken the Government only five months to recognise their mistake in this case?

Those have been five important months, and I have no doubt that the continuance of subsidies during them will have helped a number of people on low incomes.

Will the Minister tell the House the date on which the Government intend to discontinue food subsidies entirely?

Not this afternoon.

asked the Secretary of State for Prices and Consumer Protection how many consumer advice centres have been opened and price survey schemes have now been commenced.

To date, 113 consumer advice centres have been opened and 290 price survey schemes are in operation.

I thank my hon. Friend for that answer, but 1 ask him to suggest what advice the consumer advice centres can give to consumers in view of the rise in food prices as a result of action by the European Economic Community and the withdrawal of food subsidies.

There are things which price surveys can do. They can give information to consumers about where the cheapest goods within a range are available.

What are they costing?

The cost altogether is about £3 million in a full year for consumer advice centres and price surveys. I was saying that price surveys can indicate to consumers where the cheapest goods are available in a range. The surveys show that there are considerable variations. They enable competitors to fight harder in favour of the consumer.

asked the Chancellor of the Duchy of Lancaster whether he will make a statement on his recent visit to Washington and on the discussions that he had there.

asked the Chancellor of the Duchy of Lancaster if he will make a statement on his recent conversations in Washington with representatives of the United States Administration.

I visited Washington from 13th to 17th November. While there, I discussed general economic and financial questions with leading members of the United States Administration. Our talks were wide-ranging, open and friendly and were marked by a spirit of warmth, understanding and good will.

Although I am delighted that the Chancellor's talks were marked by a spirit of warmth and understanding. may I ask him whether he was not very disappointed that the new swap facilities with the United States are in the amount of only $500 million? Is not this a sign of a total lack of faith on the part of the United States in this Government? To what extent does he believe that all the swaps and standbys announced last week will be able to see us through several months of balance of payments deficits at the rate of £500 million a month?

I was not in the least disappointed. No requests of ours have been refused. The consoling hallucinations of the hon. Gentleman and many of his hon. Friends about the unwillingness of the international authorities and of other Governments to trust the credit of this Government have no basis in fact. As for the future, the massive act of international financial co-operation of which this forms—we hope—a part will be quite ample to see this country through its financial needs in the year ahead.

Did my right hon. Friend's conversations include any long-range proposals on the part of the United States Administration for a more general reform of the international monetary system, which clearly is not operating now that we have fluctuating exchange rates as opposed to the fixed system which operated so successfully for 25 years in the post-war period?

I touched on wider issues of less immediate importance than those to which I have already referred, and I found widespread recognition of the fact that there were many aspects of the international monetary and financial system that were worthy of study and advance. I have no doubt at all that in the period ahead of us we—that is, the great trading nations of the world—shall have to make further advances in our international financial co-operation to sustain the progress in world prosperity that we are all seeking.

The Chancellor said that he had had discussions with the leading members of the United States Administration. Which Administration did he mean? Did he mean the Administration that is powerless before February, or did he mean the Administration that will be powerless after February?

There is only one Administration. Members of the British Government—at any rate, members of the Government now on this side of the House—when they have contact with foreign Governments, have contact with the existing Government who are in power and who will remain the Government in power until pretty well near the end of January. I had no contact with any notional Administration whose personnel could at that time be known.

Will my right hon. Friend tell me, as a business man who has made a few bob in his time—

Who—my hon. Friend?

I am referring to my right hon. Friend. Will he tell me whether he discussed the cock-eyed scheme to sell off £500 million worth of a nationalised industry—British Petroleum—to whoever the lucky bidder is, especially when he, in another capacity a short time ago, was chiefly responsible for assembling not all that much but as much as was possible for the State in respect of the oil profits and so on from the North Sea?

The question of British Petroleum did not form part of any discussions in the United States. I do not know whether my hon. Friend wants me to relate this sale and the reasons for it to the possibilities of his emulating in any way my own modest advance in preparing for my old age, but he has a long time ahead of him and I shall be very happy, in the gap between now and then, to assist him in that way too.

When the Chancellor was in Washington, did the American authorities give any indication whatsover that they favoured a return to a system of fixed exchange rates?

No, Sir.

asked the Chancellor of the Duchy of Lancaster when he last met the Chairman of the International Monetary Fund.

I cannot recall that I have ever met the present Chairman.

May the House take it from that answer that the right hon. Gentleman has not met the Chairman of the IMF? If he meets the Chairman of the IMF, will he ask him whether he thinks that it is sensible for this country to borrow £8,700 million next year?

I do not know whether the hon. Gentleman is confusing the role of Chairman of the IMF, which rotates among the members, with the Managing Director,,Dr. Witteveen. I suspect that he and perhaps many others are in that state of confusion. This is not the kind of general question that is addressed to the Managing Director or the Chairman of the International Monetary Fund, and I therefore do not propose to address it. Neither does it seem to me to be a question relevant to the Question tabled by the hon. Gentleman.

Are we to understand, therefore, that the IMF now issues its orders to the British Cabinet without ever even meeting its members?

I must do my best in the classical manner for my hon. Friend's understanding, but the IMF does not issue orders to the British Government. The British Government's policies derive from decisions of the British Cabinet as supported by Members of the House, and not from the IMF.

Did the Chancellor play any part at all in negotiating the IMF loan? If he did, will he tell us in what eventuality the full loan would not be forthcoming?

As the answer to the first part of the question is "No", nothing interesting can be given by way of answer to the second part.

When my right hon. Friend was in Washington, did he have the misfortune to meet Professor Milton Friedman? If so, did he explain to Professor Friedman that the advice that he gave to Chile to keep inflation and unemployment down has not worked, that under the so-called free enterprise system in that country inflation and unemployment have increased and Chile has got into a hell of a mess, and that we do not need advice from people like him?

In recent months the only contacts I have had with Professor Friedman have been televisual, and that did not give me the opportunity to make the comprehensive comment that my hon. Friend would have wished. When I meet Professor Friedman next, I could perhaps exchange many interesting views with him.

:Despite the initial answer, will the Chancellor say when he expects the draft articles and initial quotas to be ratified and whether the quotas will be substantially less than the $3·9 billion for which we originally applied?

The hon. Gentleman seems to have it in his mind that we applied for $6·9 billion—

:No,$3·9 billion.

Oh, $3·9 billion. The hon. Gentleman ought to read the Letter of Intent and the agreement that has been reached. I am not in a position, without notice, to give him the technical details for which the has asked about the dates of ratification and the like. I do not think he ought to worry about the IMF fulfilling its commitments to Her Majesty's Government in terms of the loan.

If the IMF trusts the Government as much as the right hon. Gentleman implied, why is the loan coming in such humiliating instalments, as though we were a fifth-rate banana republic?

That remark betrays an innocence on the part of the hon. Member which he displays over a wide range of topics. These are the usual terms of loan from the IMF, and they have been applied to Governments of the hon. Member's own political complexion. An IMF loan either is or is not a begging bowl operation. If it is a begging bowl operation, it applies to Conservative Governments as well as to Labour Governments.

No Conservative Government have applied for such a loan.

The hon. Gentleman who says that no Conservative Government have ever applied for a loan is also showing a degree of innocence on this subject. These are the normal terms of the IMF. They are not humiliating and have nothing to do with bankruptcy. They have a great deal to do with the organised institutional financial co-operation on which the future prosperity of the countries of the world will depend.