asked the Secretary of State for Prices and Consumer Protection if he will ensure that after 31st July 1977 any price control policy recognises that where the historic reference level for price control is unrealistic to the continuing viability of the enterprise, a flexible approach can be taken by the Price Commission towards implementing controls on such prices.
Under the present Price Code firms may apply to the Price Commission for a modification of their net profit margin reference level or their permitted gross margin ceiling. My right hon. Friend is considering how, under the margin controls which he proposes to continue after 31st July, the Commission can be given more explicit guidance on the factors to be taken into account in the exercise of its discretion. The Price Commission Bill, under which the Commission will be empowered to investigate price increases, prices and margins, was introduced today. In carrying out such investigations the Commission will be guided by criteria set out in the Bill, which make clear that efficient firms are not to be prevented from earning adequate profits.