Skip to main content

Oral Answers To Questions

Volume 933: debated on Monday 20 June 1977

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Prices And Consumer Protection

Prices

1.

asked the Secretary of State for Prices and Consumer Protection what has been the year-on-year rate of inflation up to April 1977 and May 1977.

2.

asked the Secretary of State for Prices and Consumer Protection by what percentage prices have risen in the last 12 months.

4.

asked the Secretary of State for Prices and Consumer Protection what has been the percentage increase in the retail price index over the last six months, excluding seasonal foods.

5.

asked the Secretary of State for Prices and Consumer Protection what is the latest rise in the retail price index.

The year-on-year increase in the retail price index was 17·5 per cent. in April and 17·1 per cent. in May. This improvement results from the May increase of 0·8 per cent., less than one-third of the increase registered the previous month and the smallest monthly addition to the RPI for almost a year. Over the six months to May the RPI, excluding seasonal foods, has increased by 9·5 per cent.

I welcome the 0·4 per cent. reduction between April and May, but does the right hon. Gentleman acknowledge that an increase of 17·1 per cent. for the last year means that the cost of living has doubled in just over four years? Is that not a punishing rate of inflation? Will he also acknowledge that until we bring the inflation rate down to about 3 per cent. the situation will not be tolerable?

I agree that what has happened on inflation in the recent past is a record that needs substantial improvement. It is easier to describe what has happened in the past than to predict or to make sure that something better may happen in the future. I believe that something better will happen in the future because of the partnership between the unions and the Government. We will stay in office until we bring that situation about.

I recognise that the Government expect inflation from last November to next November to rise by no more than 14 per cent. If there is a significant rise over the 14 per cent. figure before next November, will the right hon. Gentleman think it right to press for an adjustment in retirement pensions and related benefits?

Part of the hon. Gentleman's supplementary question is not a matter for me, and the part which is a matter for me is wholly hypothetical. Therefore, for two reasons I should not answer it.

In view of the justifiable calls for stricter price controls by the TUC and the National Consumer Council, will my right hon. Friend condemn the impertinence of the Common Market Agriculture Commissioner, Mr. Gundelach, who is claiming that British Ministers are breaking the law by speaking out against the common agricultural policy—a policy which has been responsible for many of the food price increases, which can only be described as criminal?

The correspondence between Commissioner Gundelach and my right hon. Friend the Minister of Agriculture must be a matter for my right hon. Friend. On the concept of selective price freezes, I have no doubt that in future there needs to be a Government power to enable some prices to be frozen. Many of us will be sitting here tomorrow and probably until the day after to make sure that that power is obtained.

As the National Consumer Council has recommended an upper limit of 9 per cent. on price increases, will the right hon. Gentleman say what action he will take if this leads to the erosion of profit margins or to their elimination so that unemployment will increase still further?

I do not answer for the National Consumer Council, which expresses the views of the consumer, but I have a great deal of sympathy for its objectives as expressed in a draft paper last week. My only reservation is that a general and arbitrary price freeze could do the economy substantial damage. A selective price freeze is an advantage. That is why we are piloting a Bill that will bring about a selective freeze.

Does my right hon. Friend agree that the rate of inflation which he envisages will not happen of its own volition and that there will have to be interventionist policies by the Government? Will he stand by his statement last week that the £ sterling should be allowed to rise to its rightful level? Will he also stand by his statement that it is necessary for us to have a price strategy for the public sector, particularly for the energy industry?

Of course I stand by the speech I made last week, but my hon. Friend will understand that some parts of that speech were seeking to draw the attention of the wider public to the fact that decisions on inflation are difficult to take because they are sometimes in conflict with other economic objectives. I tried last week to set out the alternatives. We look forward to hearing from the House, the country and the party about the rival claims on economic resources.

Will the right hon. Gentleman go further than to express the hope that inflation will come down? Bearing in mind that it is almost midsummer and that we have been promised that inflation would be down to single figures, has the right hon. Gentleman had a midsummer dream about the time at which we might expect a drop to single-figure inflation?

I stand by the forecasts which I made during the last nine months. During the late summer and autumn there will be reductions in the year-on-year rate, and I believe that we shall be down to single-figure inflation as a real prospect in the second quarter of 1978.

Price Commission

3.

asked the Secretary of State for Prices and Consumer Protection whether he will report to the House on the progress made in the appointment of the new Price Commission.

Subject to the Price Commission Bill becoming law, I propose to appoint Mr. Charles Williams, at present a managing director of Baring Brothers, as full-time Chairman of the Price Commission. There will be three part-time deputy-chairmen. I propose to appoint Dr. Gordon Hobday, Chairman of Boots, Mr. John Hughes, Vice-Principal of Ruskin College, Oxford, and Mr. Seamus Sweetman, Vice-Chairman of Unilever. I shall announce names of the other members of the new Commission as soon as possible.

Is the Secretary of State aware that the House is grateful to him for reporting today on the progress of appointment of Commissioners and that the names that he has announced will be widely welcomed in all parts of the House and the country?

I am grateful. I have said from the beginning that the Price Commission Bill and the Commission need the respect of industry and a policy which is well and appropriately applied by people who believe in it. I believe that both the chairman and the deputy-chairmen will fulfil that criteria.

Does my right hon. Friend recall that last year there were seasonal variations in two quarters of the year when price increases were reasonably favourable? Will he give power to the new Commission to give central directions to freeze prices on a wide range of goods? Does he not agree that that would be electorally sensible, that it would cause the Opposition to squeal blue murder and that it could also result in the survival of the Labour Government?

My hon. Friend will discover, once he has survived tomorrow night, that the Price Commission Bill includes substantial price freeze powers over increased prices notified to the Commission and which the Commission believes ought not to be allowed and ought to be frozen. If my hon. Friend wants opposition from the Conservative Party, he is likely to get it for most of tomorrow evening and possibly the day after.

Yes, he will be full-time. I am not sure whether it is appropriate to describe his relationship with the Government as a contract, but we have told him that we expect and hope that he will serve for three years.

Profit Safeguard Regulations

8.

asked the Secretary of State for Prices and Consumer Protection whether he will make a statement on the proposals he has made with respect to the profit safeguard regulations under Clause 9 of the Price Commission Bill.

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

On 15th June my right hon. Friend published a consultative document setting out proposals for safeguard regulations under Clause 9 of the Price Commission Bill. Hon. Members will have an opportunity to discuss the proposals during Report stage and Third Reading of the Bill this week.

I thank the Minister for that statement. Is he aware that the estimates of the CBI and of other bodies show that the safeguard levels are substantially worse than those which previously obtained? Why have the Government made the changes in that way and ignored all the consultations on the matter?

The consultations have not been ignored and we have taken full account of the representations that have been made by the CBI and the Retail Consortium. As for the difference in the safeguards, the Price Code safeguards have served a different purpose. They have protected the generality of industry from overall price control which otherwise would have operated automatically. Under the new investigatory powers, there is no such threat of automatic and general erosion of margins. It is there that the difference lies.

Is my hon. Friend aware that it would be wrong for us to make reference to the Price Commission Bill and to the Price Commission without this side of the House welcoming the appointment of Charles Williams, who shares the Government's view on intervention in industry and who has wide experience? He will be welcomed on this side of the House as well as by those on other Benches.

Is my hon. Friend aware that the only interest that the CBI seems to have is that there should be no control over profits but considerable control over wages? If he has a chance to talk with the CBI about its representations, will he ask the CBI to play the game and to see what influence it could have by controlling prices as avidly as it wishes to see wages controlled?

I am sure that the CBI and the whole country have interest in seeing price restraint. The CBI would do great damage if it saw safeguards as being a profit norm. The CBI ought not to try to undermine confidence in British industry. There is a great danger if the trapeze artist thinks about the safety net all the time, because he then starts to get dizzy.

Trade And Commercial Practices

11.

asked the Secretary of State for Prices and Consumer Protection if he plans to introduce legislation giving general powers to regulate trade and commercial practices.

Not in the immediate future. But I do think that there is a case for taking general enabling powers to require registration or similar arrangements to cover individual sectors where this seems necessary to protect the interests of consumers.

Does that mean that the Government will seek powers to regulate trade and commercial practices generally under one Act of Parliament rather than, as recently, by introducing separate Bills? For example, there have been the Farriers (Registration) (Amendment) Bill and the Insurance Brokers (Registration) Bill—although one of those was a Private Member's Bill. Does not the hon. Gentleman feel that this is a departure from the Government's previous policy and that it indicates dissatisfaction with the Fair Trading Act?

In a way it does, but it also recognises that the powers of the Fair Trading Act to deal with a number of commercial practices are not as satisfactory as they were intended to be. I have put forward only a tentative proposal upon which I invite discussion, but there are a good many professions and trades that would prefer to have a regulatory system, to protect the vast majority of reputable traders, introduced rapidly.

Prices

12.

asked the Secretary of State for Prices and Consumer Protection what is the increase in the retail price index, excluding seasonal food, over the last three months, expressed at an annual rate.

7.

asked the Secretary of State for Prices and Consumer Protection what is the current rate of inflation.

14.

asked the Secretary of State for Prices and Consumer Protection what is the latest year-on-year percentage increase in the retail price index, all items.

The current rate of inflation is, as I stated in my reply to the hon. Members for Eastleigh (Mr. Price), Banbury (Mr. Marten), Reading, North (Mr. Durant) and West Stirlingshire (Mr. Canavan), 17·1 per cent. For what it is worth, the increase in the RPI, excluding seasonal food, over the last three months expressed at an annual rate is 19·9 per cent. However, I do not regard the three-monthly annualised figure as a statistically valid indicator of trends.

Will the right hon. Gentleman make clear to the House, and especially to his hon. Friends below the Gangway, that the appalling increase in the retail price index during the past three months has not been a consequence of Britain's membership of the EEC?

I tried to make that point clear not only to the House but to a wider audience a week ago. The effect of the common agricultural policy, about which there have been many legitimate criticisms, is negligible compared with other factors affecting the increase in the cost of living. Its effect has been about 05 per cent.

I hope that the hon. Gentleman will not talk about annualised figures in that florid fashion. The annualised rate, based on May figures, shows that inflation is now running at less than 10 per cent., but I do not believe that that is a statistically valid thing to deduce.

Does the right hon. Gentleman realise that the figures, annualised or financialised, are in horrible contrast to the expressed intentions of the Government? Will he explain—as he has said that foreign confidence in Britain is very much dependent upon certain aspects of the Government's war on inflation—how that can be squared with the requirements of the Price Commission Bill for permanent powers of investigation, intervention and price control?

I must first explain that the figures that I have just announced are in no way in conflict with the Government's previous estimates. The 19·9 per cent. is in conflict with good statistical practice and the other figure of 17·1 per cent. is the sort of figure that we predicted throughout the spring as the level that we expected in the summer. We shall begin to reduce it month by month in the late summer and early autumn.

As for the Price Commission, I have no doubt that it will play a substantial part in bringing inflation under control. The general need to keep inflation under control must be reflected in our national economic policies, but a part of those policies must be an effective Price Commission, and that is something that we shall create.

Does my right hon. Friend agree that the common agricultural policy has had an effect and that so also has the harmonisation of prices in this country with European prices, especially for farm produce? Does he not agree that this has had an effect on the RPI? Does he not realise that working people are now saying that we were promised Common Market wages but that all that we have had has been Common Market prices without the wages to go with them?

I can give only the statistical facts as calculated in my Department a week ago. Of the 17·5 per cent. inflation over the last year, about 1 per cent. was calculated as being caused by the CAP.

Since that time, as I am sure my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) will be gratified to know, I have thought it necessary to revise that figure. It is not 1 per cent. It is 0·5 per cent.

Wholesale Prices

15.

asked the Secretary of State for Prices and Consumer Protection whether he will give the latest year-on-year percentage increase in wholesale prices (all items).

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

The wholesale output price index has increased by 20¾ per cent. year on year since May 1976, showing no change since April. The wholesale input price index has increased by 19¼ per cent. year on year—a fall from the April figure of 22¼ per cent.

As the Minister recognises and admits that the rate of wholesale price inflation is now 20 per cent., can he give us one good reason why the public should believe this desperate and discredited Government when they hold out the mirage that inflation will fall, at some distant date, to single figures?

I should have thought that the hon. Gentleman would take some comfort from the fall in the input index which reflects the stability of sterling that has been brought about by Government measures and some stabilisation of world commodity prices. These are reasons for believing that the Government are on target.

Does my hon. Friend agree with the Secretary of State that the Common Market is to blame for hardly any of the price increases? If so, is not his Department really saying that the Government are to blame for all the price increases? Is the Secretary of State also saying that the transitional arrangements arising from Common Market membership have had little or nothing to do with price increases over the past three or four years?

If I accepted my hon. Friend's extension of the responsibility, I could include him and his hon. Friends in that responsibility because of their support for our measures. This is an illogical approach. There are a number of other Questions on the Order Paper concerning the common agricultural policy.

Does the hon. Gentleman know whether the Secretary of State believes that, given the surplus on the balance of trade over the last three months, it is relatively more important that prices in the shops should be allowed to benefit from the rise in the value of the pound? If so, is the right hon. Gentleman urging that view on his Cabinet colleagues?

Did the extraordinary figure just given by the Secretary of State include a calculation of world food prices which are much lower than those in the Common Market and which could have benefited greatly the British consumer? Is the hon. Gentleman aware that there is a plentiful supply of food in the world at much lower prices than in the Common Market?

I do not see the relationship between that and the percentage increase in wholesale prices with which I have been dealing. But, of course, the factors to which the hon. Gentleman referred were taken into consideration.

Prices

16.

asked the Secretary of State for Prices and Consumer Protection what has been the percentage increase in the retail price index since February 1974.

18.

asked the Secretary of State for Prices and Consumer Protection what is the latest annual increase in the retail price index.

As my right hon. Friend has informed the House, the latest increase in the retail price index is 17·1 per cent. The index has increased by 78·7 per cent. since February 1974.

Is the hon. Gentleman proud, satisfied, disturbed or merely complacent about that reply?

The Government have made plain the priority they attach to reducing the rate of inflation and have given a firm indication of how that end will be achieved. It is not sensible to be complacent or as extreme as some Opposition Members are about the prospects. If the Government persist in their relationship with the trade unions, whose restraint on wage policy has contributed substantially to the improvement in the situation, we shall succeed in conquering the difficulties that we have been faced with as a result of trends many of which are beyond the Government's control.

Can the hon. Gentleman say how many of our competitors in OECD countries have rates of inflation exceeding or anywhere approaching the annual figure that he has announced? To what does he attribute the consistent disparity between their levels of inflation and ours? In view of that disparity, does he think that the Government's target is really adequate?

Part of the difference can be attributed to policies pursued by the previous Government including, for example, subsidising and forcing into deficit the nationalised industries, the results of which are still with us, though I am glad to say that the current trend of nationalised industry price increases is substantially reduced.

Is my hon. Friend aware that many people inside and outside the House believe that there have been dramatic increases in prices which have hit the housewife hard and do not contribute to the possibility of a third phase of the pay policy? Is he aware that, when the Secretary of State says that he does not believe that the Common Market and the common agricultural policy have had an effect on price increases, this may be the reason why many people believe that his Department is not doing a good job? Will he, therefore, take on board the possibility that the CAP and other activities of the Common Market have contributed to increased prices and also work to make his Department more efficient?

The prime responsibility for negotiation of the CAP lies with the Ministry of Agriculture, which has been extremely effective in reducing the rate of price increases proposed by the Community to one-quarter of what was originally intended. That is a substantial achievement.

The Price Commission Bill, which has its Report stage in the House tomorrow, will enable us to freeze prices selectively for up to 12 months and will be a substantial contribution to reassuring the housewives with whom my hon. Friend is so rightly concerned, as are we all.

As the internal purchasing power of the pound has fallen to 55p since the Government came to power, would the hon. Gentleman care to predict how long it will be before it falls to 50p? Does he agree that that would be a highly appropriate date for the Government to go to the country for the "fair test" that the Prime Minister has been talking about?

I see that the hon. Lady also reads the Daily Express. She will have seen that paper's predictions. I propose not to comment on them but to treat them with the seriousness they deserve.

Nationalised Industry Prices

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.

European Community (Council Of Ministers)

19.

asked the Secretary of State for Prices and Consumer Protection what plans he has to attend future meetings of the European Communities Council of Ministers.

Is the hon. Gentleman aware that the proposal to require ice cream to be designated as edible ice is bizarre and fatuous even by the generous standards of the European Commission? Will he indicate by what means he intends that those in Brussels should be made aware of this view?

The answer to the first part of the hon. Gentleman's question is "Yes". That view has already been made plain to the Commission. I have accompanied my right hon. Friend the Minister of Agriculture, Fisheries and Food to Council meetings of the Agriculture Ministers and there is no doubt in the minds of members of the Council as to where the British Government stand on this issue.

As the Minister has attended Council meetings with the Minister of Agriculture, Fisheries and Food, will he explain why the Government agreed to a tax on isoglucose when, in the week before, the House had voted against precisely that thing?

The package as a whole must be considered, and major changes—most notably the payment by the Community of a subsidy on butter worth 10p per pound—were agreed as a result of the strong representations that were made about the importance of bearing in mind the consumer interest in the price settlement. The isoglucose levy was unwelcome, but it must be judged as part of an overall package.

Will my hon. Friend confirm whether it is in the interests of the policy of detente that the EEC is flogging mountains of beef and other foodstuffs and lakes of wine to the Soviet Union at knock-down prices at the expense of the British consumer?

Detente is not a consideration in the minds of Agriculture Ministers attending the Council.

Consumer Protection

20.

asked the Secretary of State for Prices and Consumer protection what further measures are proposed to improve the protection of the consumer.

Good progress is being made on a number of important measures. For example, the Unfair Contract Terms Bill, sponsored by my hon. Friend the Member for Peterborough (Mr. Ward), is well advanced in its passage through Parliament and the Price Commission Bill is before the House. A number of further measures to protect consumers are under consideration, including a new consumer protection Bill on which I am currently having consultations.

As this Parliament may well go on for another year or two years, and as it is unlikely to get controversial legislation through the House in view of the Government's majority, will my hon. Friend and his Department seriously consider bringing forward important consumer protection measures and putting them in the next Queen's Speech so that Parliament may occupy its time dealing with consumer protection matters?

I have already said that I hope that in the next Session there will be a consumer protection Bill dealing mainly with consumer safety. I appreciate that it is felt on both sides of the House and by outside bodies that urgency should be given to dealing with other measures of consumer protection.

Does the hon. Gentleman agree that so far the best method that has been found of protecting the consumer is by ensuring that there is genuine competition in each product and service sector, and that the greatest problem is where there is not, for various reasons, genuine competition?

Yes, but we are trying to encourage genuine competition and the Price Commission Bill, when enacted, will add bite to the competitive edge. As the right hon. Member for Down, South (Mr. Powell) said in the House recently, no market is perfect and most markets are far from perfect. We also need consumer protection measures embodied in legislation.

Does my hon. Friend agree that a valuable general protection would be afforded to the consumer if there were a rigorous investigation of the retail price mark-ups in the footwear industry, which a recent footwear study report shows to be unacceptably high?

The Price Commission will investigate those prices where notifications are given under the present system. It will be free to select for investigation that sort of sector under the new régime under the Price Commission Bill.

As it is a fact that Government legislation on employment protection has produced a vast increase in unemployment, and as their legislation on rent controls has produced a vast increase in homelessness, what guarantee is there that legislation on consumer protection will have anything other than the contrary effect?

First, I do not accept the hon. Gentleman's premises based on the legislation that he has mentioned. Secondly, we are usually supported by the mass of consumer organisations and the mass of reputable traders and manufacturers when we bring considered consumer protection legislation before the House.

Will my hon. Friend give as much attention to the protection of consumer services as the Department gives to goods? Is he aware that the National Car Parks car park at Euston has been giving no information of the amount that the parker will be asked to pay as he or she drives into the car park? If a car is parked for three hours the charge is £1, but if a car is parked for three hours and five minutes the charge is £5. The parker is not made aware of that fact until he or she is about to leave.

The Unfair Contract Terms Bill is one example of the priority that is being given to consumer protection in the provision of services. That aspect is being given as much priority as the provision of goods and the provision of information about services. It is as much in our minds as is consumer protection against shoddy goods.

Food Subsidies

21.

asked the Secretary of State for Prices and Consumer Protection what assessment his Department has made of the contribution of subsidies towards the stabilisation of prices to the domestic consumer.

Over the last three years the effect of food subsidies on the cost of living has varied. At their peak early in 1975 food subsidies were estimated to be saving 1·6 points on the retail price index.

Does my hon. Friend agree that the maintenance and even the extension of food subsidies would have a useful stabilising effect on the cost of living and would improve the chances of getting a reasonable incomes policy in the third stage?

Food subsidies are being maintained, although at a lower level than they were earlier. I have already drawn attention to the particular importance of the butter subsidy.

Does the hon. Gentleman agree that stabilisation of consumer prices will be effected by the success of the incomer policy? Having made an assessment on the basis of the Question, will he spell out what level of pay increases generally is consistent with a retail price index increase over the next year of 10 per cent., 5 per cent., or 17 per cent.?

Not without notice. That does not relate directly to the contribution of food subsidies towards stabilising the cost of living.

Will my hon. Friend indicate what level of subsidy would have been required of the Government had they tried to protect consumers against increases in food prices since the sterling crisis of last autumn?

It would have required a level of subsidy quite inconsistent with maintaining confidence in the £ sterling.

How much will food subsidies introduced by the Government have cost in total by the time they have been phased out, and what proportion of the total food subsidy has gone to poorer families?

As no decision has been taken finally to phase out food subsidies, that answer cannot be given. I can tell the hon. Lady that food subsidies are less regressive than the subsidies that her party when in power gave to the railways.

Commodity Marketing

22.

asked the Secretary of State for Prices and Consumer Protection what plans he has to control the forward marketing in commodities.

None, Sir. I remain quite satisfied that the existing surveillance arrangements are adequate.

Is my hon. Friend aware of the great increases in the prices of tea and coffee? How far are these the result of genuinely increased costs—[HON. MEMBERS: "The Common Market."] Even I would leave out the Common Market—and how much is due to speculation?

Yes, I am aware of the concern about tea price increases. There is a Question on the Order Paper about this matter, which is being considered by the Price Commission. The ingredients or the causes of the increase will be and are being carefully analysed by the Price Commission. When it publishes its report, my hon. Friend will be able to read it.

Has the Minister made any estimate of the likely cost of the common fund on the basic costs of a number of commodities in this country? If the Department has not yet made such an estimate, will it do so over the coming months while the common fund is under detailed discussion?

A curious practice seems to be developing of asking ques- tions about almost anything under the sun whether or not it relates to the Question on the Order Paper, which on this occasion concerns forward marketing in commodities. That is a matter for my right hon. Friend the Secretary of State for Trade.

Price Increase Regulation

23.

asked the Secretary of State for Prices and Consumer Protection whether he will make a statement on his further specific proposals for transitional arrangements under Clause 21 of the Price Commission Bill.

My right hon. Friend intends that the provisions in the present Price Code which regulate price increases by reference to increases in costs should come to an end by 1st August 1977 or as soon as administratively possible thereafter. My right hon. Friend has therefore tabled an amendment to the transitional provisions set out in Clause 21 of the Price Commission Bill to ensure that this has to be done by 1st October 1977 at the latest.

Does not the Minister feel that he is getting dangerously close to the deadline of 1st October? Does he not realise that we may have a new Government by October? Should he not therefore make his proposals clearer much earlier than that time?

I do not think that we shall have a new Government by that time. The date 1st October is the latest date. Of course, in normal circumstances we would expect to have our proposals ready long before that time.

Fares (London Underground)

25.

asked the Secretary of State for Prices and Consumer Protection when he expects to receive the report of the Price Commission on Underground fare increases in Hertfordshire.

The Price Commission considers applications to increase fares from London Transport Executive against the rules set out in the Price Code and does not report to my right hon. Friend or any other Minister the outcome of that consideration.

Will the Minister in future consider the wisdom of matters of this kind being exempt from any veto of investigation? These increases—40 per cent. and 50 per cent. in this case—represent a substantial rise in the cost of living to the individuals concerned. They reflect not only on Hertfordshire but on Essex and Buckinghamshire. Surely this is the kind of matter with which the Department should be intimately concerned.

My Department is concerned about these matters, as the hon. Gentleman will know from the debate which he initiated on this subject last week, which, I think, answered his question fairly extensively.

Is my hon. Friend aware that almost all Conservative Members want some form of price control on services and goods in their constituencies and no such control in other constituencies? Does he agree that if there were no price control whatsoever we should be running into one of the greatest confrontations ever with organised labour and that that would do no good to this House, the nation or, indeed, Europe as a whole?

My hon. Friend is right to draw attention to the discrepancies between the views of Conservative Back-Bench Members who call for selective price control when speaking for narrow constituency interests and those of Opposition Front Bench speakers who have opposed the Price Commission Bill, which will enable such powers to be taken. The Opposition must sort out that problem among themselves. They must also recognise that the country is increasingly mystified about their policy on prices.

Tea Prices

26.

asked the Secretary of State for Prices and Consumer Protection if he will refer to the Price Commission the increase in the price of tea.

6.

asked the Secretary of State for Prices and Consumer Protection if he will refer the price of tea for investigation by the Price Commission.

My right hon. Friend announced on 30th March 1977 that he had asked the Price Commission to examine and report on prices, costs and margins in the importation, blending, packaging and distribution of tea, including the causes and effects of movements in world prices of tea. The Price Commission has not yet completed its report.

Does my hon. Friend accept that many people, especially the retired, are angry at the way that tea prices have increased? Does he appreciate that they understand that increases in the pay of tea workers in no way account for the increases which have taken place and that their confusion is heightened when the May indices show that the food index increased primarily because of the increased cost of tea, whereas the index for materials purchased, including tea, shows that those prices went down? People believe that there is speculation and that middlemen are having a field day. What will my hon. Friend and his Department do to speed up the inquiry and tackle the problem?

We are anxious that the inquiry should be completed not only as soon but as authoritatively and thoroughly as possible. It takes time for forward prices to feed through into retail costs. That explains the discrepancy between the figures to which my hon. Friend drew attention and in particular the decline in the London tea auction prices from a peak in March of 270p per kilogram to 180p per kilogram. That latter figure is still more than twice what the figure was in December 1975. These are complex matters. I believe that in such instances it is right to have a thorough report from the Price Commission.

Is the Minister aware that, despite his statement, there is still a widely held misconception that there is some connection between the Common Market and increases in the prices of tea and coffee? Will he dispel that misconception? Will he also explain why the so-called world price of sugar is at present extremely low whereas, because of commodity agreements, the price that we pay remains static and is slightly rising?

No one in my hearing today has asserted that the increased price of tea had anything to do with the European Economic Community. Indeed, my hon. Friend the Member for Aberdeen, North (Mr. Hughes) specifically denied that, and he is entirely right.

Does my hon. Friend appreciate that it is entirely right for a Government who are supposed to be dedicated to the idea of planning and intervention, on occasions of astronomical price increases, for whatever reasons—whether commodity speculation or poor harvests overseas—to intervene and to do something to protect consumers, especially the low paid and those in the pension category? If they could do that for bread to a limited extent, why have they not done it for tea and coffee?

My hon. Friend has precisely enunciated my philosophy. [Interruption.] It is because the Government accept the force of his view that there should be the power of selective intervention to deal with unacceptable price increases that they have brought forward the Price Commission Bill, which will give that power, but it will do so on the basis of the evidence of lack of justification for a price increase. We are seeking that evidence in referring matters, such as the tea price increase, to the Commission. The new Bill will give us far greater power to act than we possess at present. We are seeking in that way to strengthen our price control policy to protect the less-well-off members of our society.

European Community (Economic Ministers)

asked the Chan cellor of the Duchy of Lancaster when, in his rôle of economic adviser to Her Majesty's Government, he was last inconsultation with the Economic Ministersof the EEC.

asked the Chancellor of the Duchy of Lancaster when, in his capacity as the Government's chief economic adviser, he next intends to meet his EEC colleagues.

I meet Economic Ministers from the Governments of other EEC countries from time to time. I hope that I shall have the opportunity to meet informally any who are visiting London for the European Council at the end of this month.

What are the right hon. Gentleman's views about the EEC's reported intention to raise large sums of money on its own account in international markets? If the Government remain openly and bitterly divided on the question of continuing EEC membership, to what extent will that damage Britain's chances of sharing in the disbursement of the moneys raised by the EEC?

I welcome the constructive achievements of the EEC, including the particular financial one to which the hon. Member referred. My Government are certainly not—[HON. MEMBERS: "My Government?"] The Government of which I have the privilege of being a member are certainly not divided on the question of retaining membership of the European Community. The expressions "bitterly" and "openly" are not apposite to the position of my Government in relation to the EEC. We shall continue as we have done throughout the period of this Government in encouraging all positive achievement that is for the advantage of this country and members of the Community.

At such discussions with the Council of Ministers, what positive plans were brought forward to deal with the question of unemployment in view of the high level of unemployment in the Common Market? Does my right hon. Friend accept that that level is a basic fault of the capitalist system that operates in the Common Market? What plans do he and the Government have to deal with that problem?

Unemployment is a world problem. The question that all of us in Europe have to ask ourselves is whether we would be better off in a state of anarchic, unilateral rat-racing than in a co-operative attempt to solve these problems. I welcome my hon. Friend's concern that we should tackle these problems co-operatively as a responsible member of the European Community.

In the right hon. Gentleman's rôle of economic adviser to the Government, does he reflect that as Chancellor of the Duchy of Lancaster he represents a major agricultural, landowning interest? In that capacity, what advice has he offered the Government about the future of the Milk Marketing Board and the Potato Marketing Board within the European Community?

I was aware of the premise on which the hon. Member's question was based, but I had not, I confess, regarded these as areas of my specialist expertise on which to tender advice to the Government.

When my right hon. Friend meets the Economic Ministers of the EEC, will he tell them to proceed cautiously because of the massive groundswell of disillusionment which is spreading throughout Britain? Will he ask them to adjust their policies accordingly or allow us to get out?

My hon. Friend refers to a massive groundswell of disillusionment. That comes mainly from those who were never illusioned in the first place.

In that case, might I send to the right hon. Gentleman the results of the last few opinion polls, which show that opinion has reversed since the referendum? I turn to the Question on the Order Paper. One of the main aims of the Community surely must be convergence. Since we have joined, there has been nothing but economic divergence. What will be the right hon. Gentleman's advice to the Economic Ministers when he discusses this important question, if the Common Market is to succeed?

The hon. Member is right to say that we shall all benefit if we can increase the amount of economic and financial convergence in our activities. I should give the advice that they should learn from the past. It is no good setting unrealistic targets for advance. But I should tell them that they should not despair of advancing in a commonsense, constructive way. I should tell them that one of the advantages that they hope to get from our arrival is that good faith and common sense will be injected more strongly into the forces of the Community by reason of our arrival.

In these discussions, will my right hon. Friend tell his fellow Ministers about the importance of the stabilisation of international commodity prices and the value of the common fund as a mechanism to achieve this end?

I certainly take part in discussions about the way in which we can achieve greater security for the world on commodity prices. This question is being dealt with in many different places such as the United Nations, the CIEC and the Common Market. In so far as my hon. Friend is seeking to relate this matter to the Community, I believe that the Community has a constructive part to play in furthering the world judgments which would be useful in this area.

When the Chancellor of the Duchy of Lancaster next meets the EEC Economic Ministers, will he take the opportunity of reaffirming that it is an essential element of the Government's economic strategy that there should be a substantial and continuous reduction in the share of resources required for the public sector?

Does my right hon. Friend appreciate that while it is true to say, as he did, that there are those of us who will never be content while we are inside the Common Market, many millions of other people have changed their minds? Is he aware that there is no better illustration than that of Grimsby, where the people were told that they would benefit most from membership because their port faced Europe?

Will he tell the European Ministers that we are propping up private industry by £10 million a day, whereas before we joined we were spending only £2 million a day on it? Will he tell them that the dole queue has doubled and that inflation is raging at three times the rate it was before we joined? Will he also tell them that we have a trading deficit of £2,000 million a year, which we did not have when we went in? Will he tell them that those of us on these Benches who are campaigning——

I readily accept that my hon. Friend the Member for Bolsover (Mr. Skinner) will not be content as long as we remain inside the Common Market.

What is more open to discussion is whether he would be content even if we came out. In the long list of cumulative woe which my hon. Friend has enumerated, he has omitted the recent increase in wet weather and cold as late as mid-June. On a more cheerful note, my hon. Friend has also omitted the striking improvements in the balance of payments which have been occurring recently and the even greater ones which are now in prospect. None of these matters can be attributed exclusively to the Common Market. To those who are complaining, I can only say that all the more optimistic predictions made in relation to the Market have not been statistically justified and that for me the question is whether we would be better off out of the Market in the short or long term or better off in it. I have not the least doubt that we have been much better off in the short term through being in the Market and that our prospects of being better off in the future are immeasurably enhanced because of the new growing European unity cautiously advanced.