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Profit Safeguard Regulations

Volume 933: debated on Monday 20 June 1977

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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.