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Price Increases (Prevention)

Volume 961: debated on Monday 22 January 1979

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asked the Secretary of State for Prices and Consumer Protection in how many cases his Department or the Price Commission has intervened to prevent or to reduce price increases during the last 12 months.

Of the 30 investigation reports published in the last 12 months, eight have resulted in price restrictions either through voluntary undertakings given to my right hon. Friend or in one case by order. In a further nine cases, companies informed the Price Commission during the investigations that certain prices would be held.

In the same period, 12 examination reports were published, four of which recommended restrictions on charges or margins. In two of these cases the companies concerned gave undertakings that they would hold their charges for varying periods. In one case my right hon. Friend made an order imposing margin controls.

One is pleased that those cases occurred, but does my hon. Friend agree that an expansion in the scale and intensity of investigation is extremely desirable? Can we expect that expansion to take place now, even though the Opposition will be flatly opposed to it?

I think that there is no doubt that the existence of the safeguards, which it is the Government's announced intention to remove, has acted as a disincentive to the Commission to investigate certain cases in which it knew that it would be impossible for it to follow up the investigation by any recommended action. In that respect I believe that what it is proposed to do will widen the effectiveness of the Commission's powers.

When pursuing these investigations, will the Government take account of the fact that jobs depend on profitable companies, that investment depends on profitable companies, and that by destroying such companies and asking taxpayers to subsidise the companies that lose money the Government are destroying the economy of the country?

I note that the hon. Gentleman and his colleagues are expressing opposition to a further tightening of price control. The country will notice that.

In regard to the Price Commission's capacity to take profitability into account I remind the House that it is specifically spelt out in section 2 of the Price Commission Act that profitability is one of the factors which the Price Commission must bear in mind. Even in the present situation, with its existing somewhat restricted powers, the Commission has acted responsibly in the last 18 months. The Commission, with its wider powers, may be relied upon to act equally responsibly.