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Nationalised Industry Prices

Volume 933: debated on Monday 20 June 1977

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17.

asked the Secretary of State for Prices and Consumer Protection what representations have been made to him regarding taking powers to impose a price freeze on nationalised industry prices.

9.

asked the Secretary of State for Prices and Consumer Protection if he will seek powers to impose a price freeze on nationalised industry prices.

24.

asked the Secretary of State for Prices and Consumer Protection if he will seek powers to introduce a price freeze relating to products and services supplied by nationalised industries.

I have had no recent representations about introducing a general freeze on nationalised industry prices. Powers are not required to impose a freeze, but would be required to compensate the industries for any overall loss.

I do not wish to return to the policies of the Conservative Party, which tried systematically to bankrupt the nationalised industries, but does my right hon. Friend agree that nationalised industry prices are of great importance, particularly to the low paid or those living on pensions or benefits? Would he accept that there is a danger of some of the industries making entirely unacceptable profits for no good reason? Does he accept that restraint on their prices would be a valuable example for the rest of the business community?

Nationalised industries have to set a good example, and that is why I was anxious that the Price Commission Bill should apply to them just as much as to private enterprise, and it will do so. The nationalised industries are moving towards the viability that was denied them by the previous Government and they can have a much more gradual pattern of price increases when such increases are essential. The industries will be controlled by the same Commission and legislation as private industry. That gives me the opportunity to correct an answer I gave in reply to an earlier question. The new Commission will be chaired by Mr. Williams, but his initial term of contract is two years and not, as I said earlier, three years.

Does the right hon. Gentleman agree that, with the cost of fuel and light having nearly doubled in the past three years, this is no time to be imposing another tax on North Sea gas? Is he with the Chairman of the British Gas Corporation or the Secretary of State for Energy on this issue?

I am with the Government—according to the rules of collective responsibility.

Will my right hon. Friend again confirm that the new Price Commission will be responsible for intervention in and supervision of the pricing strategies pursued by the nationalised industries? Does he recognise that, if the Government are to realise their ambition to get down to single-figure increases in the retail price index within the time stated by them, there will have to be some drastic changes in what are now envisaged as price rises in the whole area of rents, rates and public sector expenditure, as well as nationalised industries, together with other items such as transport which go to make up a significant part of the index? Will he assure the House that the Commission will have the right to intervene in the pricing strategies of all the areas that I have mentioned and will be encouraged to do so?

My hon. Friend has asked two important questions. I believe that the pattern of increases that we have prescribed and predicted will be achieved according basically to our present economic strategy. There may be some adjustments from time to time, but the basic strategy should remain and, I believe, will remain. I believe that it will produce the prices pattern that I have described.

As for the Price Commission and the nationalised industries, the position is that the Commission will act generally on its own initiative. It will choose the investigations that it wishes to make when it is notified of a price increase. The initiative that is exercised by the Commission will apply to the nationalised industries exactly as it will apply to private enterprise, which I believe is wholly right.

Will the right hon. Gentleman accept the congratulations of this side of the House, and no doubt the congratulations, too, of the Managing Director of the International Monetary Fund, for the courage that the Government have shown in insisting that there should be a sensible economic pricing policy for the nationalised industries?

I am always prepared to accept congratulations, no matter how bizarre the quarter from which they come.