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Prices And Consumer Protection

Volume 928: debated on Monday 14 March 1977

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Prices Policy


asked the Secretary of State for Prices and Consumer Protection which Minister in his Department is responsible for handling consultations on the proposed new prices policy.

I am primarily responsible. I have already had discussions with the CBI and the Retail Consortium and am meeting the Food and Drink Industry Council later this afternoon.

Will the Secretary of State accept that the reason why the prices policy is in tatters is that he applies different criteria to private industry and the nationalised industries? What assurances can he give the House that, under the new prices policy, there will not now be a repetition of the squalid ignoring of the prices policy on gas prices by the Secretary of State for Energy?

I do not accept for a moment that the present prices policy is in tatters. As to the future prices policy, which was the subject of the hon. Gentleman's Question, it is clear in the consultative document that the provisions of that policy will apply to nationalised industries as they apply to the private sector.

As the right hon. Gentleman has stated that workers who voluntarily take on austerity must be satisfied that the prices they pay are justified, in view of his right hon. Friend's decision to override the veto of the Price Commission on gas prices does he think that the increase in gas prices is what he would call socially accountable?

The increase in gas prices was part of a decision taken in December concerning the economy as a whole, which has clearly made the economy a good deal more stable than it was. Many of the decisions within that policy were regrettable although necessary. I think that the gas price increase comes into that category.

Would not my right hon. Friend agree that an increase in prices of this kind will affect working people in particular very badly? Will not the Cabinet reconsider this matter? This is something which working people obviously are not prepared to accept much longer, which means that it will have a very bad effect on phase 3 of the incomes policy.

I note what my hon. Friend says. Specific questions about specific details of the gas price proposal, to which I think he was referring, are not for me but for the Secretary of State for Energy. [HON. MEMBERS: "Oh! "] However, I also understand the point that my hon. Friend makes about the Cabinet in general having to investigate and inquire into these matters, and I am sure that my colleagues will note what he has said.

Industrial Clothing


asked the Secretary of State for Prices and Consumer Protection if he has received representations concerning increases in the price charged for the cleaning or rental of industrial clothing during the last two years; and how many such cases he has referred to the Price Commission.

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

I have received the representations of my hon. Friend on this subject and I referred them to the Chairman of the Price Commission.

Does my hon. Friend agree that pricing policy in this area should receive special and sensitive consideration? Is he aware that the Price Commission is suspected of too easily rubber-stamping substantial price increases, including the case to which I have drawn his attention, in which two price increases were allowed in one year, bringing the charge for one garment from 28p to 38p? Does he not think that that is excessive?

The Price Commission is empowered to investigate such increases and only to permit those which can be justified by allowable cost increases. I have no means of knowing, but I must assume, that the Commission satisfied itself that the allowable cost increases made a rise of this order inevitable.

Nationalised Industries


asked the Secretary of State for Prices and Consumer Protection what steps he will take to encourage the reductions of costs by better use of resources in the nationalised industries; and how he will ensure consumers share the benefits.

My proposals for prices policy after 31st July will apply to nationalised industry prices in broadly the same way as they would to other sectors. The new criteria will focus attention on cost reductions and better use of resources.

Will the Secretary of State please give some encouragement to the consumer in regard to the nationalised industries? How can the consumer believe that she will get a better share of the benefits of nationalised industries when, as in the case of gas, she is being forced to pay a price which is clearly not allowed by the Price Commission? Will the right hon. Gentleman recognise that that decision runs quite counter to what is allowed in the private sector?

No, I do not accept the hon. Member's judgment about that at all. As for comforts to the consumers, the position is very clear. We have now largely corrected the errors made in nationalised industry prices by the previous Government, and we can look forward in future to increases in nationalised industries' prices, which cannot altogether be avoided, being at a much slower rate than in the recent past.

Why are there three Ministers, one Whip, one Parliamentary Private Secretary and only six Labour Back Benchers in the Chamber for Questions on prices and consumer protection? Have the right hon. Gentlemen's Back Benchers despaired of ever having their Questions answered?

Is it not clear that the impending increase in the price of gas is no more and no less than a tax on the consumer? If the costs of production are less, why should the consumer have to pay because the Government have failed to reduce their extravagant spending programmes?

The hon. Gentleman cannot have it both ways. He is implying that the gas price increase is intended to help deal with some of the economic problems, such as the reduction of the public sector borrowing requirement, that we successfully faced in December, when his party proposed more savage cuts. If we followed any of the suggestions that the hon. Gentleman and his colleagues have made, that would affect the consumer a great deal more.

Price Controls (Categorisation Limits)


asked the Secretary of State for Prices and Consumer Protection whether the present categorisation of firms in the Price Code will remain the same under the new prices policy.

The present intention is that the categorisation limits in the present price controls should not be substantially changed when the new policy comes into operation. This question will, however, fall within the consultations on the new policy proposals.

In view of the continuing high level of inflation, does not the Minister agree that the qualifying level for category 1 firms should be raised a great deal, thus lifting a small part of the increasingly heavy burden that the Government have placed on small businesses and small business men?

The category limits were last raised in August to take account of inflation. Too frequent changes would be unjustifiable.



asked the Secretary of State for Prices and Consumer Protection what is the latest figure for the rate of inflation over the last three months expressed at an annual rate.


asked the Secretary of State for Prices and Consumer Protection what is the latest monthly increase in the retail price index, calculated on a year on-year basis; and by how much the index has increased since February 1974.


asked the Secretary of State for Prices and Consumer Protection what is the latest three-monthly rate of price inflation.

Over the three and 12 months to January 1977, the retail price index increased by 5·4 per cent. and 16·6 per cent. respectively. This brings the increase since February 1974 to 69·5 per cent. For what it is worth, the three-month annualised figure is 21·8 per cent.

Does not the right hon. Gentleman feel a sense of shame at that last figure as it has risen so much from the vaunted 8·4 per cent. of the Chancellor of the Exchequer at the last General Election?

I do not feel very much about that last figure, except what I tried to imply in my answer, that it does not have much statistical validity.

As the Government's new anti-inflation policy appears to be to overrule their own independent Price Commission, would it not be better to scrap it?

In overruling the Price Commission, the Government would apply a provision in the Act for which the hon. Gentleman voted. He must make up his mind whether he was wrong in voting for that overruling provision. I think that it was right and necessary, and it can occasionally be applied properly.

Does my right hon. Friend understand fully that the £6 pay policy and its successor have not resulted in the dramatic fall in price increases and inflation that he and his fellow Ministers in the Cabinet supposed? What with unemployment almost doubling in that period, prices rising, the social wage being cut and there being no further investment, is there any reason to carry on with another round of pay policy?

I think that there is every reason to carry on. [Interruption.] Unlike some Conservative Members, my hon. Friend has asked a question believing, as I do, that it is a serious issue. My hon. Friend knows very well that the increase in the retail price index over the past six months has been largely the result of sterling depreciation. I have no doubt that, if we did not reach agreement on another wages round, sterling would again be in jeopardy and inflation would be a great deal worse.

The right hon. Gentleman cannot have it all ways. Does he not agree that inflation figures of 69·5 per cent. are a tremendous condemnation of what the Government have done in the past three years? Will he use this opportunity of expressing his abhorrence of total price freezes, which can do nothing more nor less than to increase unemployment from its present hideous level?

I have already made it clear that in my view a total price freeze would be injurious to our industrial prospects and bad for the economy in general and working people in particular. As for the overall rate of inflation. I have no doubt that, if we remain resolutely committed to the policies we announced in December, the rate of inflation will begin to reduce in the summer and thereafter. I am sure that that is a right thing for us to do.

Does my right hon. Friend agree that the high rate of inflation has been partly due to the common agricultural policy and to the fact that we are members of the Common Market, where food prices are much higher than anywhere else in the world? Is it not about time the Government renegotiated the CAP and stopped talking about renegotiation?

I think that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) will agree that the position being taken by my right hon. Friend the Minister of Agriculture, Fisheries and Food in the negotiations in Brussels, which are concerned with prices next year, reflects our intention of being very tough during the discussions and having no price increases which would be injurious to our general economic policy. But I am sure that he also accepts that what has really affected inflation in this country over the past year is the sterling rate of exchange. I do not care to contemplate how sterling would have deteriorated in October and November of last year had we not been members of the Commons Market.

Does the right hon. Gentleman think that an inflation rate of 16·6 per cent., if he wants the year-on-year figure, or nearly 20 per cent., if he wants the three-month figure, marks a successful Government policy?

I believe that it marks a policy which will improve with the summer. [HON. MEMBERS: "Which Summer?"] The Opposition must decide whether they want to support us in policies that will result in a gradual but continual improvement in the inflation figure. The effects of the December measures will soon work themselves through and there will soon be another wages round. When that is debated, the Opposition will have to decide which side they are on.


asked the Secretary of State for Prices and Consumer Protection if there has been a rise or fall in the rate of inflation in the United Kingdom in the last six months; and how this compares with the trend in the other EEC countries.

Over the six months to January 1977, the year-on-year rate of inflation in the United Kingdom has increased from 12·9 per cent. to 16·6 per cent. Exactly comparable information for other member States is not available, but to December the average rate of inflation for these countries was similarly on an upward trend.

Is the right hon. Gentleman aware that, according to statistics from his own Department, inflation has risen every month in Britain for the past six months, a very different pattern from that in Belgium, Denmark, France, West Germany, Luxembourg and the Netherlands, to name but six? Apart from the fact that we are unfortunate in having an ineffective Government, what is so special about Britain compared with the other countries of Western Europe?

I am simply relying on the information that the Treasury gave the hon. Gentleman on 3rd March. One of the things that is special about us is that on the December figures our rate of acceleration is a good deal less than that of many of our partners.

Will my right hon. Friend confirm that what the other Common Market countries did when they participated in the recent IMF loan was to lend us the money in order for us to continue to buy their goods?

I think my hon. Friend will agree that that is somewhat of an over-simplification of what the loan provided. It also provided us with the wherewithal to go on selling our goods to Europe and to keep the British economy afloat. Without the IMF loan, the country would have been in a very difficult situation.

Does the right hon. Gentleman recall that in a speech at Blackpool last April the Prime Minister boasted that on the previous six months' figures the rate of inflation had halved? Is the Secretary of State aware that if one takes precisely the same yardstick as the Prime Minister took then the rate of inflation has not halved or doubled but has trebled? Will the right hon. Gentleman say how long he expects that this country can go on with rates of inflation which are double and treble those of our main competitors?

That extraordinarily selective use of figures does not excite me half as much as it clearly excites the hon. Lady. The figure is the year-on-year rate. The increase in the year-on-year rate has decelerated, and the hon. Lady will find that if she asks me or someone else that sort of question towards the end of the year the position will be appreciably improved.

Is my right hon. Friend aware that the real thing that could damage this country would be if the prices of food, clothing and footwear which obtain in Common Market countries were applied here? We would be in a very serious situation indeed. That is why so many people from the other eight Community countries are prepared to come over here at the weekends in order to stock up and go back home because, despite our so-called inflation, the price of the goods that I have mentioned is much cheaper in the United Kingdom than in the EEC countries.

Of course they are, and many of them are so kept by the green pound, which is something that we have to maintain and preserve. My hon. Friend well knows that all those people who come here are earning EEC wages and paying United Kingdom prices. I hope that we can get to the day when we, too, will be earning EEC wages in this country.

May 1, unusually, come to the help of the right hon. Gentleman in his answer to the question of my hon. Friend the Member for Christchurch and Lymington (Mr. Adley)? Is not one of the reasons why our inflation has gone up more than that of our Common Market partners, certainly the old Six, that the CAP and the transitional stages have forced up the price of food?

That is certainly a factor, but statistically it is a small factor indeed compared with the major reason, which is the depreciation of sterling.

Price Commission Reports (Sales)


asked the Secretary of State for Prices and Consumer Protection how many copies of the Price Commission's quarterly reports for the periods 1st June to 31st August 1976, and 1st September to 30th November 1976, were sold to the general public.

Separate figures for sales to the general public are not available. The latest figures available show total bookshop sales as 1,192 and 1,078 respectively.

Are not those sales rather meagre? Incidentally, the report now costs £1·65 compared with the original £1. Was the Minister surprised that the Commission said that new code changes had made it impossible to draw up comparative profit figures, so that it was no longer making judgments about the future movement of profit margins? Is not that an astonishing assertion from a Commission that is supposed to bear in mind all factors when drawing up its price control policy?

The Price Commission's general conclusions, reported in its quarterly reports, are given widespread currency by the Press and other media following publication of the reports. The increased price of the second report reflects increased costs of production, which I understand have been considered most carefully by the Commission.

Fuel Prices


asked the Secretary of State for Prices and Consumer Protection whether his new proposals for monitoring and control of prices will be applicable to fuel; and, if so, how they will operate.

My right hon. Friend's proposals for prices policy after 31st July would apply to fuel prices in broadly the same way as they would to other products, with such modifications as are necessary to reflect our Community obligations in respect of coal prices and the Government's special responsibilities for the nationalised industries.

I am not quite sure how to interpret that somewhat obscure and ambiguous answer. Is my hon. Friend aware that if, under the new system, we have a repetition of what we have at present in respect of gas prices, the whole system of price control, such as it is, will be brought into total disrepute?

One of the principal aspects of the new prices policy, which is an improvement and a more effective method of price control, is that it will enable us to launch investigations to cover pricing practices and levels in all industries, including the nationalised industries. They will simply be judged against the provisions under the Price Code which enable the Commission to look behind the Price Code to the whole circumstances of the industry. I think that this will enable a more realistic check to be taken.

Is not the simple truth behind that bureaucratic answer the fact that the Government will monitor and control such energy prices as it is politically convenient to do so?

If political convenience were the sole consideration, perhaps the hon. Gentleman would concede that it might not have been the Government's desire to increase the price of gas. But the economic justifications for having done so have already been spelt out by my right hon. Friend.

Cutting through some of the waffle in the answer that we have just heard, may I ask my hon. Friend to state categorically that the new prices policy will not be subvented to the Treasury in the same way as with the present prices policy in regard to fuel?

—within the Government for the overall view of the management of the economy. My right hon. Friend the Secretary of State for Prices and Consumer Protection will, within the collective governmental framework, ensure that the consumers' interests are taken fully into account when arriving at a collective position. My hon. Friend and Conservative Members who complain of bureaucratic answers ought to accept and understand that the principal interest of the consumer at this time is in obtaining a stabilised rate of sterling, because it is the decline in the parity of sterling which is directly responsible for the price increases which are being complained of today. My hon. Friend will acknowledge that the measures taken in December have strongly contributed towards establishing the stability of sterling. The package must be judged as a whole by that test.

Is the Minister aware that it really does not make sense for the Government to increase fuel charges across the board while at the same time subsidising a lot of people because they have put up prices too much at the same time as the nationalised fuel industries are not only making a profit but also profiteering at the general expense of the consumer?

I assure the hon. Gentleman that this Government have no intention of returning to the policies of the Conservative Opposition in subsidising the nationalised industries at tax-payers' expense and thus distorting their financial control.

Food Prices


asked the Secretary of State for Prices and Consumer Protection how long he expects the present rising trend in food prices to continue.


asked the Secretary of State for Prices and Consumer Protection what he expects the rise in food prices will have been from July 1976 to July 1977.

The food index rose by 81·5 per cent. between February 1974 and January 1977. I am not prepared to forecast the rate of increase for the year to July 1977 or to guess how present trends may change.

Those statistics are worrying enough, as are the statistics which the Secretary of State gave me recently in reply to another Question. Can he reassure the country in any small way at all that the rate of increase of previous months and years will be decreasing during the coming year? Does he not appreciate that it is confidence in the present Government which is at the root of the price of sterling, and that the price of sterling is at the root of the price of food?

Certainly the price of sterling is the main determinant in the price of food. Of course, the price and the value of sterling have appreciated considerably between December and now. The hon. Gentleman must himself interpret whether that is the result of improved reputations abroad of the present Government. The comfort I offer the consumer is that, if we can hold sterling at or about the present level, the adverse effects of October, November and December of last year will not reappear and food price changes will not be as bad as they were during that period.

Does my right hon. Friend agree that food prices within the Common Market are on average considerably higher than world prices? Does he not find it remarkable, in view of the rather hypothetical concern expressed by the Opposition about prices, that the only idea of policy that the Leader of the Opposition has made herself clear about is opposition to any idea of a price freeze?

That is very true. My hon. Friend will have noticed, as the whole country has noticed, that while the Opposition have a great deal of criticism to offer about prices and prices policy they have nothing constructive to say about what they would do in its place. The Leader of the Opposition has said nothing positive during the six months that I have been in this job. If she has said it, it has been my misfortune to miss it. I hope that in the coming months we shall have a debate about prices and prices policy, if only to discover whether the Opposition have any policy at all.

Is the right hon. Gentleman aware that many people will hardly believe that the figure which he has given of 81·4 per cent. is the true figure for the rise in prices? Is not that an appalling indictment of what the Government have done and what the British housewife has had to suffer? When will prices stop rising?

The answer to the hon. Gentleman's question of when food prices will stop rising covers a spectrum of facts from when there ceases to be a shortage of coffee as a result of frost in Africa to when there ceases to be drought in England and when the pound continues on its stabilised path. My view is that all these things are a great deal more complicated than any Opposition Member ever pretends he understands or is prepared to make out.

In view of the stress which my right hon. Friend has rightly put on the fall in the value of sterling accounting for price increases, may I ask whether he is satisfied that the public are aware of the impact of the sterling crisis upon prices? When there are major price increases in areas which directly affect the public most, will my right hon. Friend issue information explaining the extent to which that is the result of a fall in the value of sterling?

I shall try to do that, but it is sufficiently difficult to educate the Opposition on these matters and I think that educating a wider public, albeit a less biased one, might be very much more difficult.

If the purpose of consumer advice centres is realistically rather than, cosmetically to help to bring down prices, will the right hon. Gentleman consider extending these to rural areas, or possibly having mobile advice centres, so that people living outside cities may have the benefit of them?

I am not sure that the object of these centres is to bring down prices. Rather is it to provide information which is necessary and appropriate. The hon. Gentleman is right. One of the things that I have tried to do over the past year is to extend mobile centres that can go for a time each month to rural areas. The more we can do that, the better. We have extended the grant for a year, and I hope that local authorities which feel that they want to abandon the centres will think again, because I agree that they perform a valuable service.

Would the right hon. Gentleman care to comment, if not on food in general, on bread, which once again, according to TheTimes, has raised its head? Will the right hon. Gentleman comment on the resolution of the Price Commission that only a portion of the price discount is an allowable cost? Will he comment on whether that is a change from previous practice? Is it not a fact that manufacturers may recover cost of production globally and not just line by line, as appears to be the case for bakers?

As I understand it, the Price Commission made clear to the bakers its position on recoverable costs. I discovered that the Price Commission made the position clear before the bakers adjusted prices after Christmas. That seems to be a decision for the Price Commission, and for it alone.

Household Prices


asked the Secretary of State for Prices and Consumer Protection what further measures he plans to take to keep down household prices.

My right hon. Friend has published proposals for a more effective prices policy to succeed the present control powers when they expire on 31st July.

As the Government have not had much success in keeping down prices, can the hon. Gentleman say whether it is his intention to allow the Post Office to go ahead with its proposal to increase the letter and parcels rates? Can he say how much traffic the Post Office expects to lose by increasing these charges?

The Price Commission has vetted these proposals, and I understand that they are not out of line with the Price Code. Therefore, there is no case for the Secretary of State to intervene.

With regard to the household price of food, may I ask my hon. Friend whether he has seen the figures produced by the National Consumer Council, in association with the Consumers' Association, which reveal that, leaving aside inflation, the Commission's proposals for this year—the last stage of the transition—will increase farm prices by 3 per cent. and that other measures that it is taking will lift the food bill for a family in this country by £600 million a year—that is, by 4 per cent. per household, or 70p on the average household? Ought we not to get out of the CAP, because those are the increases that we shall face, leaving aside inflation?

My right hon. Friend the Minister of Agriculture, Fisheries and Food is this afternoon engaged in negotiations on the Commission's proposals to which my hon. Friend has referred, and I shall be joining him there later. I think my right hon. Friend will understand that the proposals are still very much a matter for negotiation, and my right hon. Friend has made it clear that he believes that price increases for commodities which are in structural surplus are unacceptable to this Government.

Will the hon. Gentleman, on this one, deliberately eschew longwinded, bureaucratic and incomprehensible answers and say whether the new controls after July will be mild or severe?

If the hon. Gentleman fails to understand my answers, I am afraid that I am not wholly to blame.

Accidents In The Home


asked the Secretary of State for Prices and Consumer Protection what are the latest figures available for the number of accidents in the home; and if he will break these down according to age and type of accident.

The Minister of State, Department of Prices and Consumer Protection
(Mr. John Fraser)

Statistics provided by the Office of Population Censuses and Surveys show that, in 1975, 5,081 persons died as a result of accidents in the home in England and Wales and 1,094 in residential institutions. I will, with permission, circulate details in the Official Report.

Fuller statistical information about home accidents will be provided in future by the Accident Surveillance System recently set up by my Department.

Does my hon. Friend agree that home safety councils are operating on a shoestring, and that in view of the number of accidents there is an urgent need to provide greater resources here? Will he study the recent issue by the German Government of stamps dealing with home safety interests? Will he look at this proposal with a view to discussing with the Post Office the possbility of something similar in this country?

I shall look at that proposal, of which I have not heard before. We have recently increased the grant to RoSPA, and publicity on home safety is promoted by my Department, by local authorities and by many other bodies.

Can the hon. Gentleman give statistics of how many accidents have been caused by the linkage of cookery machinery, ovens and fires to North Sea gas? What steps is he taking to minimise these?

I am sorry, but I cannot give those figures because the accident figures so far have been analysed by injury and not by cause of accident. The new Accident Surveillance System will give not only the injury but the causes, and we hope to get meaningful information from the statistics towards the middle of this year.

Will the hon. Gentleman accept that his Department is already broken down by age and accident?

Following is the information:


All Ages



65 and over


Residential Institution


Residential Institution


Residential Institution


Residential Institution

Accidental poisoning by drugs and medicaments4841314237110991
Accidental poisoning by other solid and liquid substances68335738
Accidental poisoning by gases and vapours123116250
Scalds and accidents caused by corrosive liquids323102203
Inhalation and ingestion of food2059972192474151
Injury undetermined whether accidentally or purposely inflicted536261114001312512
Other accidents4564115311352563625

Consumer Credit Act


asked the Secretary of State for Prices and Consumer Protection if he is satisfied with the operation of the Consumer Credit Act.

I believe that, when fully effective, the Consumer Credit Act will provide the protection for the consumer in matters relating to credit and hire which was intended.

How soon will the Minister be introducing regulations requiring a full statement, when so-called 100 per cent. mortgages are being advertised, of the true rates of interest comprising such mortgage facilities? Is the hon. Gentleman aware that this is a source of great concern to young couples in particular?

I understand that, and I have recently made regulations to determine the effective rate of charge for credit. I expect the advertisement disclosure regulations to take effect towards the end of the year.

Distributors (Investment)


asked the Secretary of State for Prices and Consumer Protection in what way he intends to encourage investment among distributors.

The investment relief provisions of the present code already meet this need.

Is the hon. Gentleman aware that that is not entirely satisfactory? Will he take account of the fact that there are two aspects to this? There is investment, which improves shopping facilities both for customers and for the staff working in retail outlets, and, far more seriously, there is the problem of providing sufficient working capital to accommodate continual price rises in the costs of materials and food being bought by retailers. That has to be financed. The Price Code must accommodate it.

The Government recognise the force of some of the hon. Gentleman's comments. After changes were made to the Price Code in August, as a result of relief claimed under the investment relief provisions £355 million of investment expenditure was claimed. I think that the hon. Gentleman's point Consumer Credit Act has been met.

Is the hon. Gentleman aware that in the new prices policy consultative document it is clear that the distributors have been discriminated against in a big way? There is no relief for them of the same order as is given to manufacturing industries. As distributors have not been making excessive profits, and as they employ a high proportion of school leavers, is the hon. Gentleman satisfied with the amount of unemployment among school leavers that is likely to be created?

I am satisfied that the proposals for the distributive trades in the consultative document will not impose a discriminatory or unfair burden on that section. I am equally sure that it is necessary to retain control of gross and net profit margins in the distributive trades at a time when working people throughout the country are accepting universally the need for restraint in their incomes.

Does my hon. Friend agree that in the past 40 minutes we have been listening to a tirade from the Opposition about rising prices? Does he further agree that if the proposal of the hon. Member for Gloucester (Mrs. Oppenheim) is carried into effect it will push up prices even further?

Yes, and yes again. My hon. Friend has underlined the point made by my right hon. Friend that the Opposition's performance this afternoon has been wholly negative.

Price Increases


asked the Secretary of State for Prices and Consumer Protection if he will introduce a statutory price ceiling beyond which additional price increases will have to be separately agreed with the Price Commission.

Any uniform price ceiling might allow some companies higher price increases than would be justifiable under the investigatory system we have proposed, whilst it could prevent many other companies from fully recovering cost increases and from raising the funds needed to support investment and safeguard jobs.

Does my hon. Friend accept that that reply will be considered by the TUC to be totally evasive because, although some companies might benefit in the way suggested by him, they would be a very small minority? Is he aware that there is an overwhelming feeling within the TUC that there should be a return to free wage bargaining and that the only way in which that can be accomplished in an orderly fashion for phase 3 of wage policy is by having a fixed ceiling above which prices could rise only if the circumstances were considered by the Price Commission to be exceptional? Therefore, it would be possible to have a system of free wage bargaining against price ceilings which would bring about the distributive element in phase 3 for which we are looking.

My right hon. Friend the Secretary of State is looking forward to hearing the TUC's detailed response to his proposals. However, it has been made clear, and has been widely accepted, that the principal disadvantage of the Price Code as it stands is that it is not sufficiently selective, and it can enable companies which may comply with the provisions of the code to get away with exploiting consumers. The new policy will be much more effective in dealing with that situation.

Will the hon. Gentleman explain to a confused public why he does not propose to intervene to overrule the Price Commission in respect of the proposed increases in postal charges but has overruled it in respect of the proposed increase in gas prices?

I did not intervene to overrule the proposals in respect of gas prices, nor shall I in respect of the Post Office proposals.

Prices Policy


asked the Secretary of State for Prices and Consumer Protection how many representations he has received about the consultative document on prices policy.


asked the Secretary of State for Prices and Consumer Protection what consultations have taken place in relation to the new Price Code announced recently.


asked the Secretary of State for Prices and Consumer Protection what consultations he has held on proposed legislation involved in enacting the new prices policy.

I have already held discussions with the CBI and the Retail Consortium and shall be meeting the Food and Drink Industries Council this afternoon. My Department has received representations from a large number of interested bodies. Discussions and correspondence on my proposals are continuing, and the outcome will be assessed at the end of the consultative period on 18th March.

In view of the justifiable demand of the trade union movement for tougher price controls, instead of just tinkering with net profit margins, why not try at least a temporary freeze on the retail prices of certain basic essentials, such as foodstuffs, fuel, rents and mortgage rates? Why on earth is coal specifically excluded from the mediocre proposals in the consultation document?

I believe that a general price freeze would be wrong because it would not be in the interests of the economy and any prospect for expansion would be inhibited. My hon. Friend should not talk about a general price freeze as if it were TUC policy. It is not. The TUC's economic statement called for the ability to hold down prices by freeze on selected occasions, and that is one of the proposals which appears in my consultative document.

How does the Minister intend to prevent the new investigatory powers which he proposes in his consultative document from having an arbitrary effect on the firms which he proposes to investigate?

First, if the legislation is passed there will be some general criteria which the Price Commission must observe; secondly, by the character and quality of the Price Commission; thirdly, by the necessity for the Secretary of State of the time to approve what the Commission does; and, fourthly, by applying a parliamentary check to the Secretary of State.

Is my right hon. Friend looking long and hard specifically at the blatant gambling which is going on in the tea market and making sure that the consumer is not being rooked in the same way as he is on coffee?

I shall examine the possibility of the Price Commission considering the tea situation. But I am sure my hon. Friend knows very well that the main cause of the increase in the price of tea—as may turn out to be the case with coffee—is the increase in import prices, and that is something we cannot avoid.

Does the Secretary of State appreciate that he may well get the worst of both worlds with his proposed new Price Code? It will have no significant effect on prices, but it will make industries think that it will be used in a purely arbitrary way and, therefore, will frighten off investment in them.

I do not believe that it will frighten off investment. With the right sort of Price Commission, which is something I want to create, industry will have confidence in the common sense and objectivity of the Commission.

On the other point, there is no possible statutory prices policy other than a general price freeze which can hold down all prices to a significant extent. As I do not believe that a general price freeze would be right, I do not even contemplate a prices policy which follows the rules that the hon. Gentleman has suggested. It is the general economic policy which must lower the inflation rate.

Does my right hon. Friend agree that many consumers believe that successive prices policies have generated more paper than benefits to them? Can he give those consumers a rough indication of the total benefits to them of successive pricing policies? Further, what steps is he taking to try to overcome speculation, in particular in the commodities market, which is in many respects undermining any hope there may be of getting popular support for prices policies?

The quarterly report of the Price Commission lists proposed price increases which the Commission prevented from going ahead. This, according to my hon. Friend's standards and mine, comes under the heading of benefits to the consumer which we could publicise. However, I emphasise that nobody should pretend or believe that a prices policy can reduce prices in the way that general economic strategy can do so. It must be the general economic policies which bring down inflation to tolerable levels.

Price Control Proposals


asked the Secretary of State for Prices and Consumer Protection if he will list in the Official Report those organisations which he has directly invited to comment on his new price control proposals.

I have written directly to the TUC, CBI, Retail Consortium, Food and Drink Industries Council, National Consumer Council and Price Commission seeking their views on my proposals. My Department has also written to over 250 representative organisations and individuals. With permission, I will circulate details of these in the Official Report. In addition, some 4,000 copies of the consultative document have been issued in response to inquiries.

Is my right hon. Friend aware that a number of hon. Members have been concerned that the representations made by consumer organisations as opposed to those made by producer organisations have not been weighed carefully enough in his Department? What steps is he taking to make sure that the views of, for example, the National Consumer Council are taken properly into account?

I shall be consulting the National Consumer Council tomorrow when its representatives come to see me. Their offerings and comments will be treated in exactly the same way as those made at meetings with the CBI and the Retail Consortium last week. The proper importance of the council will be accepted in the discussions and its views will be taken into account.

According to the Minister of Agriculture, the price of butter will increase this year to 72p to 75p a pound. Will not that offend against the prices policy? Can the right hon. Gentleman say whether British domestic policy or Community policy takes precedence?

I really cannot go on answering questions that are not for me. The hon. Member must put down that question to the Minister of Agriculture.

Following are the details:



By the Secretary of State

  • CBI
  • TUC
  • Retail Consortium
  • Price Commission
  • National Consumer Council
  • Food & Drink Industries Council

At Official Level

  • British Hotel Restaurant and Caterers Association
  • Motor Agents Association
  • National Association of Holiday Centres
  • Kinematograph Renters Society
  • Independent Film Distributors
  • Scottish Newspaper Proprietors
  • Retail Food Confederation
  • Consultative Committee of Accountancy Bodies
  • Cinematograph Exhibitors Association
  • Association of Independent Cinemas
  • Periodical Publishers Association Ltd
  • Association of British Launderers and Cleaners Ltd
  • Consumer Campaign Committee
  • Association of British Chambers of Commerce
  • British Importers Confederation
  • National Federation of Consumer Groups
  • Federation of Wholesale and Industrial Distributors
  • Food Manufacturers Federation
  • Equipment Leasing Association
  • Federation of Manufacturers of Construction Equipment
  • Electronic Engineering Association
  • Ford Motor Company
  • British Independent Steel Producers Association
  • National Federation of Builders and Plumbers Merchants
  • The Brewers Society
  • The Publishers Association
  • Cement Makers Federation
  • Council of Iron Foundry Association
  • Society of Motor Manufacturers and Traders
  • British Paper and Board Industry Federation ICI
  • Chemical Industries Association
  • The General Electric Co Ltd
  • Issuing Houses Association
  • Engineering Industries Council
  • Road Haulage Association
  • Multiple Food & Drink Retailers Association
  • The Hundred Group
  • Triplex Foundries Group Ltd
  • Guest Keen & Nettlefolds Ltd
  • British Aluminium Co Ltd
  • Bowater Scott Corporation Ltd
  • Kimberley Clark Ltd
  • National Consumer Protection Council
  • Women's National Commission
  • Association of Certified Accountants.
  • British Chemical Engineering Contractors.
  • The Scotch Whisky Association.
  • Law Society of Scotland.
  • Alcan Aluminium (UK) Ltd.
  • British Federation of Hotel, and Guest Houses Association.
  • Institute of Cost and Management Accountants.
  • Institute of Chartered Accountants in Scotland.
  • British Bankers Association.
  • British Plastics Federation.
  • British Electrical and Allied Manufacturers Association.
  • British Mechanical Engineering Confederation.
  • Courtaulds Ltd.
  • British Textile Employers Association.
  • The National Chamber of Trade.
  • Process Plant Association.
  • National Federation of Engineers and Tool Manufacturers.
  • Finance Houses Association.
  • Incorporated Association of Preparatory Schools.
  • National Association of Steel Stockholders.
  • Royal Institute of British Architects.
  • Royal Town Planning Institute.
  • Royal College of Veterinary Surgeons.
  • Bar Council.
  • Association of District Councils.
  • Scottish Courts Administration.
  • The Royal Institution of Chartered Surveyors.
  • The Senate of the Inns of Court and the Bar.
  • Faculty of Advocates.
  • Wholesale Grocers Association of Scotland.
  • Albright and Wilson Ltd.
  • The Timber Trade Federation.
  • Multiple Tobacconists, Confectioners and Newsagents Group.
  • Imperial Group Limited.
  • Wholesale Tobacco Trade Association.
  • Wine and Spirit Association of Great Britain.
  • Retail Confectioners Association Ltd.
  • Co-operative Union Ltd.
  • The Gin Rectifiers and Distillers Association.
  • Scottish Grocers Federation.
  • National Association of British Wine Producers.
  • The Vodka Trade Association.
  • Belfast and Ulster Licensed Vintners Association.
  • The Federation of Retail Tobacconists.
  • National Association of Cider Makers.
  • National Federation of Retail Newsagents.
  • The Wholesale Wine and Spirit Association of Scotland.
  • Independent Wine Merchants Association Ltd.
  • Scottish Licensed Trade Association.
  • Scottish Tobacco Trade Federation.
  • The Law Society.
  • British Veterinary Association.
  • Institute of Chartered Accountants in Ireland.
  • Royal Incorporation of Architects in Scotland.
  • The Association of Consulting Engineers.
  • The Faculty of Architects and Surveyors.
  • The Landscape Institute (Incorporating the Institute of Landscape Architects).
  • The National Association of Estate Agents.
  • Glasgow Property Owners and Factors Association Ltd.
  • Institute of Registered Architects.
  • The Association of Optical Practitioners.
  • Guild of British Dispensing Opticians.
  • The Pharmaceutical Society of Great Britain.
  • The British Medical Association.
  • The Institute of Chartered Shipbrokers.
  • The Incorporated Law Society of Ireland.
  • National Federation for the Self Employed.
  • Bank of England.
  • Society of Industrial Artists and Designers.
  • The Stock Exchange.
  • Chartered Institute of Patent Agents.
  • Institute of Actuaries.
  • Faculty of Actuaries.
  • Institute of Chartered Secretaries and Administrators.
  • Incorporated Society of Valuers and Auctioneers.
  • The General Council of British Shipping.
  • Federation of Bakers.
  • Leeds Chamber of Commerce and Industry.
  • Branded Furniture Society.
  • National Television Rental Association Ltd.
  • The British Precast Concrete Federation Ltd.
  • Bradford Chamber of Commerce Incorporated.
  • P & O.
  • Metal Box Ltd.
  • National Federation of Wholesale Grocers and Provision Merchants.
  • Federation of Optical Corporate Bodies.
  • Manbre Sugars Ltd.
  • Joint Committee of Opthalmic Opticians.
  • 1972 Industry Group.
  • National Association of British Market Authorities.
  • Pilkington Brothers Ltd.
  • Arthur Anderson and Co.
  • Deloitte and Co.
  • IBA.
  • Committee of London Clearing Banks.
  • Du Pont (UK) Ltd.
  • The Wholesale Floorcovering Distributors Association.
  • British Agrochemicals Association.
  • Hire Purchase Trades Association.
  • Committee of Scottish Clearing Banks.
  • Shipbuilders and Repairers National Association.
  • The Society of British Gas Industries.
  • British Ports Association.
  • National Ports Council.
  • British Steel Corporation.
  • Association of District Council Treasurers.
  • BP Oil Ltd.
  • Shell (UK) Ltd.
  • Esso Petroleum Co. Ltd.
  • Association of British Abattoir Owners.
  • Association of Cereals Food Manufacturers Ltd.
  • Association of Butter Blenders and Butter and Cheese Packers.
  • Association of Fish Meal Manufacturers.
  • Association of Malt Products.
  • Automatic Vending Association of Great Britain.
  • British Soft Drinks Council
  • British Sugar Corporation.
  • British Sugar Refiners Association.
  • British Association of Grain, Seed, Feed and Agricultural Merchants Ltd.
  • British Maize Refiners Association.
  • British Oatmeal Millers Association.
  • British Soluble Coffee Manufacturers Association.
  • British Association of Manufacturers of Bakers Yeast.
  • British Association of Plant Breeders.
  • The Cake and Biscuit Alliance Ltd.
  • Cocoa Chocolate and Confectionary Alliance.
  • Compound Animal Feedingstuffs Manufacturers National Association.
  • Coffee Trade Federation.
  • Confederation of Fried Fish Caterers Association.
  • Dairy Trade Federation.
  • Federation of Oil Seeds and Fats Association.
  • Fruit and Vegetable Canners Association.
  • Federation of UK Milk Marketing Boards.
  • The Grain and Feed Trade Association Ltd.
  • Health Food Manufacturers Association.
  • Ice Cream Alliance.
  • Ice Cream Federation.
  • Lard Association.
  • Bacon and Meat Manufacturers Association.
  • The Maltsters Association of Great Britain.
  • Margarine and Shortening Manufacturers Association.
  • National Association of Master Bakers Confectioners and Caterers.
  • National Association of British and Irish Millers Ltd.
  • National Association of Perrymakers.
  • National Federation of Fish Fryers Ltd.
  • National Council of Concentrate Manufacturers.
  • National Seed Development Organisation.
  • National Association of Creamery Proprietors.
  • The Pet Food Manufacturers Association.
  • Pre-Packed Flour Association.
  • The Raw Fat and Bone Processors.
  • Scottish Association of Master Bakers.
  • The Scottish Association of Soft Drinks Manufacturers.
  • Seed Crushers and Oil Processors Association.
  • Tate & Lyle Refiners Ltd.
  • Tea Buyers Association.
  • Tea Trade Committee.
  • The UK Association of Frozen Food Producers.
  • Ulster Curers Association.
  • Allied Grocery Distributors Ltd.
  • British Potato Traders Consortium.
  • British Poultry Federation Ltd.
  • Cocoa Association of London Ltd.
  • The Combined Edible Nut Trade Association.
  • Spice Trades Section of the Food Manufacturers Federation.
  • British Frozen Food Federation.
  • British Association of Canned Food Importers and Distributors.
  • Delicatessen and Fine Foods Association.
  • Federation of Agricultural Co-Ops UK Ltd.
  • Federation of British Port Wholesale Fish Merchants Association.
  • Fruit Importers Association.
  • Honey Importers and Packers Association.
  • Imported Meat Trade Association.
  • London Chamber of Commerce Inc.
  • Mace Marketing Services Ltd.
  • National Association of Health Stores.
  • National Dried Fruit Association.
  • National Edible Oil Distributors.
  • National Egg Packers Association Ltd.
  • National Egg Producers and Retailers
  • Association.
  • National Federation of Fruit and Potato
  • Trades Ltd.
  • National Union of Licensed Victuallers.
  • National Federation of Meat Traders.
  • National Food and Drink Federation.
  • National Union of Small Shopkeepers of Great Britain and Northern Ireland.
  • Retail Fruit Trade Federation Ltd.
  • Scottish Federation of Meat Traders Associations.
  • Spar (UK) Ltd.
  • National Joint Council of British Potato and Vegetable Merchants.
  • Wholesale Confectioners Alliance.
  • UK Provision Trade Federation.
  • National Federation of Fishmongers.
  • British Flower Industry Association.
  • British Grass Crop Dryers.
  • National Federation of Inland Wholesale Fish Merchants.
  • Herring Buyers Association Ltd.
  • Association of British Salted Fish Curers and Exporters.
  • Hotel, Catering & Institutional Management Association.
  • Industrial Catering Association.
  • Restaurateurs Association of Great Britain.
  • Rusk Manufacturers Association.
  • Scottish Trade Flour Association.
  • UK Flour Importers Trade Association Ltd.
  • United Kingdom Rice Millers Association.
  • The Bakers Allied Traders Association.
  • British Caramel Manufacturers Association.
  • British Glucose Manufacturers Association.
  • British Modified Starch Manufacturers Association.
  • British Starch Importers and Dealers Association.
  • British Pearl Barley Millers Association.
  • British Association of Feed Supplement Manufacturers Ltd.
  • Northern Ireland Grain Trade Association Ltd.
  • Ulster Sea Fishermans Association.
  • Fish Producers Organisation Ltd.
  • Ulster Wholesale Grocers Association.
  • Northern Ireland Fish Producers and Exporters Association.
  • Northern Ireland Master Butchers.
  • Northern Ireland Milk Alliance.
  • Northern Ireland Retail Fruit Trade.
  • Northern Ireland Retail Fish Trade.
  • Northern Ireland Bakers Employers Council.
  • Northern Ireland Hotels and Caterers Association.
  • Irish Wholesale Fruit Merchants Association.
  • North of Ireland Grocers Association Ltd.
  • North of Ireland Wholesale and Export Meat Association.
  • Northern Ireland Poultry Federation.
  • Total 278 organisations.