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Fuel Prices

Volume 928: debated on Monday 14 March 1977

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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.