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Price Increases

Volume 928: debated on Monday 14 March 1977

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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.