Prices And Consumer Protection
asked the Secretary of State for Prices and Consumer Protection when he intends next to meet the chairman of the Price Commission.
asked the Secretary of State for Prices and Consumer Protection when he expects to meet the chairman of the Price Commission.
The chairman of the Price Commission and I meet frequently. I shall be having an informal meeting with the Commission on Wednesday.
When the Secretary of State next meets the chairman, will he let him into the secret that the proposed new powers for the Commission are intended to control the unions by bankrupting companies and causing men to be laid off?
I do not think that I could offer that opinion with any degree of credibility. The chairman, unlike the hon. Gentleman, knows what the Price Commission Act says. It does not allow the situation that the hon. Gentleman has described.
Is it not a piece of sheer hypocrisy for the Tories and the nationalists to shed crocodile tears about rising prices when they voted against increased powers for the Price Commission and in favour of a further devaluation of the green pound? Can my right hon. Friend confirm reports that the Government are ready to introduce a Bill to freeze prices? We shall then see whether the Opposition parties support us in the battle against inflation or are more concerned with supporting their friends in big business who are exploiting the present legislation by raising prices to safeguard their profits.
My hon. Friend is right in both particulars. Not only are the Opposition trying to justify their past errors, but they are trying to prepare themselves for voting against tougher prices legislation in the weeks that lie ahead. We propose to press on with that legislation and to see how the various Opposition parties react.
Does not the Secretary of State think it a trifle absurd that he will soon be asking for new powers for the Price Commission, bearing in mind that he is not prepared to use his existing powers on prices in regard to the road hauliers? When he is prepared to discriminate in that way, would it not be more frank and honest simply to hand over management of the Price Commission to the picket lines?
I think that the House, and I hope the country, will note that the only occasion when the Opposition have managed to say something in support of the Price Commission was when they thought that by doing so they would embarrass the Government and damage the trade union movement. However, if the hon. Gentleman believes that we should have made the order concerning road haulage, I hope that he will support us in the Lobby over the Bill concerning safeguards. One of the reasons why it was not practical to make the order was that the road haulage industry was safeguarded. I propose to remove the safeguards.
Is the right hon. Gentleman aware that he does not need much help in attempts to embarrass the Government? He is doing a pretty good job himself. Is he also aware that he may be sure that the Conservative Opposition will not behave as his party behaved in 1974?
I have never expected or wanted the Opposition to behave as the Labour Party does. The Labour Party will continue to improve the existing processes for holding down prices and, sooner or later, the Opposition have to decide whether they will help us with that or hinder us in it.
asked the Secretary of State for Prices and Consumer Protection what is the cumulative increase in the rate of inflation since February 1974.
asked the Secretary of State for Prices and Consumer Protection what is the cumulative increase in inflation since February 1974.
asked the Secretary of State for Prices and Consumer Protection what is the cumulative increase in inflation since February 1974.
asked the Secretary of State for Prices and Consumer Protection what is the cumulative increase in inflation since February 1974.
asked the Secretary of State for Prices and Consumer Protection what has been the cumulative increase in inflation since February 1974.
asked the Secretary of State for Prices and Consumer Protection what has been the cumulative rate of inflation since February 1974.
There has been no cumulative increase in the rate of inflation since February 1974. In that period the rate of inflation fell from 13·2 per cent. to 8·4 per cent.
Order. I propose to call first the hon. Members whose Questions are being answered together and then to give a run to hon. Members on the Government side.
Will the right hon. Gentleman tell us how he intends to explain away to the nation's housewives the fact that the value of their 1974 pound is now less than 50p?
I am delighted to say that the Opposition are giving the Government an opportunity to discuss that on Thursday. One of the things concerning inflation over the past five years that I shall then describe is our inheritance of February 1974 and the fact that in the past five years we have brought inflation down to 5 per cent. lower than the figure we inherited when we came to power. I propose to suggest on Thursday ways in which the Opposition can help us in our continuing campaign and to see whether they respond to those suggestions.
Does not this doubling of prices indicate that the effect of the Price Commission on prices has been minimal, and would it not be more honest, and, perhaps, more helpful to the country, to abandon the Price Commission now and, if there is a role for investigating monopolies, to strengthen the Monopolies Commission as a quid pro quo?
As the hon. Gentleman implies, the Price Commission has two functions. One concerns the sectors where there is less than perfect competition; the other is to hold down specific price increases. I share his view that the Price Commission does not possess sufficient powers to enable it to hold down prices where that is justified, which is why I propose to bring in a Bill to make that possible.
Does the right hon. Gentleman agree that the cumulative increase since February 1974 now totals 100·8 per cent.? Will he now accept that figure? Does he realise the effect that that disgraceful rise has had on groups like the disabled, in particular the blind, whose fixed allowances have been eroded seriously, causing misery and hardship to many?
The figure that the hon. Gentleman hoped to elicit from my answer is the appropriate figure for giving in answer to a later question by the hon. Member for Leek (Mr. Knox). Since the hon. Member for Leek put down the right question, I prefer to give him the right answer rather than answer the question that the hon. Gentleman thought he was asking.
Will the right hon. Gentleman tell me, with his usual refreshing candour, where in the Labour Party's manifesto of February 1974 a pledge to the British people that a Labour Government would more than double prices in five years?
That is a typical question from the hon. Gentleman. What we promised to do in that manifesto was to bring inflation under control, and that we have clearly done. I repeat, and propose to go on repeating in the next three, six or nine months, that we have done it with very little help from the Opposition.
Is the right hon. Gentleman aware that food prices have gone up by 108 per cent. since the Government came to power? What percentage is due to the common agricultural policy, and what to the devaluation of the pound?
I think that the increase in prices would have been about 10 per cent. less had it not been for the CAP. While I do not regard that as massive, it is clearly a figure that we could well have done without. It is because of the inadequacy of the CAP that my right hon. Friend the Minister of Agriculture, Fisheries and Food is making successful attempts to limit price increases on commodities in surplus. Again, he has done that with no assistance from the Opposition. An example on which the hon. Member for Gloucester (Mrs. Oppenheim) might comment when she has recovered from her snort was the damage which the Opposition parties inflicted on the Government in respect of the green pound. By their behaviour on that occasion, as on others, the Opposition have rendered the situation more difficult rather than better.
Does my right hon. Friend agree that the important thing about inflation is the rate at which it is changing? Does he agree that in February 1974 the trend of inflation was upwards? It was high and positive, whereas at the present time the trend is fairly horizontal, and therefore the situation has improved enormously compared with February 1974.
I should have thought that even the less numerate members of the Opposition would have acknowledged the statistics, because in February 1974 inflation was over 13 per cent., and rising, whereas now it is 8 per cent. and more or less static. Not only does my hon. Friend make the point that the important thing is the trend, but so did the Opposition a year and a half ago. When the retail price index was rising month by month, that was an important indication to the Opposition. Now that it has become stable in the last nine months, it has ceased to mean anything to them.
Will my right hon. Friend confirm that if wages rise by 15 per cent. it does not follow that prices will rise by 15 per cent. as well? Perhaps he could convey that to some of his Cabinet colleagues. Will he also accept that other factors go into the making up of the rate of inflation, such as the terms of trade, the state of our currency reserves, and so on? Does he accept that more emphasis must be placed on controlling prices and, if necessary, if we cannot transform the Common Market, on getting out of it?
I do not agree with that final suggestion, but I agree with almost everything else that my hon. Friend has said. Many factors determine prices. Wages alone are not the only determinant, although they may well be the major one. If we had overall earnings increases of 15 per cent., the prospects of further improving the inflation rate would be very severely handicapped, and while I share my hon. Friend's view that wages are not the only cause, I hope that he shares mine that they are an important cause and have to be planned in the way that the other elements in prices are planned.
Whilst any other accusations made against the right hon. Gentleman and the Government about inflation may be correct, one accusation that is incorrect is that the right hon. Gentleman has never made an accurate forecast. Does he remember forecasting with absolute accuracy in Cambridge, on 27th May 1972, that
Do not the people now know exactly what he meant, as they have seen prices double and the purchasing power of the pound cut to below half? The only forecast—"We shall be an expensive Government"?
Order. We must not develop arguments now. We must confine ourselves to questions.
Will the Secretary of State accept that the only forecast that will put people out of their misery is when we can expect a General Election?
I plead guilty to the hon. Lady's initial charge. I regularly make speeches in which I say that our public expenditure plans—for housing, hospitals, education, and so on—cost more than Conservative plans, so that in that sense we are an expensive Government. I shall send her some of the texts in which I have made that point, which is always preceded by the phrase
"Let weak-minded Conservatives make what they want of that point."
Is my right hon. Friend aware that the Financial Times has conducted a comparative survey in 60 capital cities and found that prices in London compare very favourably with those abroad? Can he explain how the Opposition, if they believe in no Government interference in wages and prices, can blame the Government on these matters?
I have seen many indications of price prospects and price achievements and have been heartened by most of them. The Government have brought inflaton down to the level of about 8 per cent., and I think there is a general acknowledgement that we have made progress along the lines that we hoped. Proof of that he in The Daily Telegraph, which, in the end, had to publish its shopping clock, even though it showed an improvement in the price level, and even more in The Sun, which gave up its shopping clock altogether.
asked the Secretary of State for Prices and Consumer Protection what is the current year-on-year rate of inflation.
asked the Secretary of State for Prices and Consumer Protection by how much the retail price index has risen since February 1974.
The retail price index rose by 8·4 per cent. in the 12 months to December 1978, and by 100·8 per cent. between February 1974 and December 1978.
As, unfortunately, it appears that the rate of inflation is now starting to rise again—
Is the hon. Gentleman pleased?
I said "unfortunately". The housewives in my constituency have to pay the bills, like everyone else. As, unfortunately, it appears that the rate of inflation is now starting to rise again, can the Secretary of State tell us what the Treasury estimates are for the rate by the end of this year?
The Treasury estimates were published in the document known as "the Bray forecast", which was submitted to the House in November last year. I tried to give a rather more accurate forecast, which is possible over a shorter period, when I said that for the next three or four months there would be a slight, though not substantial, increase in the inflation rate. Instead of it fluctuating around 8 per cent., I thought that it would probably fluctuate around 9 per cent.
The right hon. Gentleman usually blames this 100 per cent. inflation on the increase in the money supply. Is he seriously suggesting that the abandonment of the Conservative Government's incomes policy and the consequent wage and salary explosion during the first 16 months of this Government had nothing to do with inflation? If so, why did the Government introduce an incomes policy in 1975?
I am not suggesting that for a moment, and I am glad that the hon. Gentleman, unlike his less objective colleagues, refers to the difficulties during the first year or 18 months of the Labour Government. Those were difficulties which we inherited. I do not believe that the Conservative Party's incomes policy—which has been disowned not only by me but by the Conservative Party—was a help in these matters. It contained the threshold agreements, and threshold agreements are institutionalised inflation in pay bargaining. I therefore think that the Conservatives handicapped the Government rather than helping them during their first year.
Will my hon. Friend give an indication of the implications for inflation if the going rate in the present wage round were to become 15, 20 or 25 per cent. respectively? Will the Secretary of State publish in the Official Report some calculations based on the same assumptions as those of the public expenditure White Paper and can he say whether, at the end of such a free-for-all, anyone will be better off respective to anyone else?
I very much agree with the implication of my hon. Friend's question, which is that if we had a wages round which produced increased earnings of 20 or 25 per cent., that would not result in people having more purchasing power, but rather in their having less. On the other hand, I do not want to produce the figures that he suggests, even though his general thesis is right. I do not believe that we shall get a 15 or 20 per cent. earnings round, nor do I believe that producing figures based on those percentages would encourage people to understand that the interests of this country are in getting a wages round substantially lower than that, thus improving their purchasing power in real terms.
Does the Secretary of State agree that the current rising rate of inflation is still too high by comparison with our major trading competitors? It is three times as high as that of Germany and twice as high as that of Japan. Can he say what the prospects are for an improvement on that situation?
Of course I agree, and the Government have always said that our objective has to be to get our rate of inflation down to the level of our most successful competitors. We have a long way to go before we achieve that—a very long way indeed. The prospects depend on a number of elements. One is that the Government maintain their present financial policies of stringency in the money supply and the public sector borrowing requirement. It also depends, as my hon. Friend has mentioned, on a reasonable pay round. Nobody can be sure about the outcome of that second factor. What we can be sure of is that the whole country has a vested interest in producing that result, and the Government will go on working very hard for that result.
Will the Minister tell the House how much of the Government's gross overspending during the past five years—as reflected by the public sector borrowing requirement which has been financed by printing the money—has been responsible for the doubling of prices during that period?
I am sure the hon. Gentleman will be amused when I tell him—though he ought to know—that that sort of calculation is not possible. What I hope will amuse him less is that the Government's record of financial stringency is a great deal more respectable than that of the Government that he supported. I am always astonished to discover how Conservative Members can advocate one policy in Opposition and carry out another when they are in Government.
asked the Secretary of State for Prices and Consumer Protection whether he has received the report from the Price Commission on the price of motor spares.
No, Sir. My right hon. Friend's direction does not require the Commission to present its report to him before 31 March 1979.
Can the hon. Gentleman confirm that many motor manufacturers as well as component makers make spare parts? Can he confirm that they will be equally consulted with the other manufacturers in this inquiry?
The Price Commission was required by the direction issued on 10 August to examine the prices, costs and margins in the manufacture and distribution of parts for motor cars. I can therefore answer the hon. Gentleman's supplementary question in the affirmative.
asked the Secretary of State for Prices and Consumer Protection what guidance he has given the Price Commission on the use of criteria for investigating pay settlements.
Will the Secretary of State confirm that his attempts to use the Price Commission as a way of exercising pay restraint are really very hard to bear when we find that the salaries and wages of Price Commission part-time members have doubled from £1,716 in 1976 to £3,600 today?
I do not know whether the hon. Gentleman heard, but during supplementary questions on an earlier Question I was blamed for using—or was it not using?—the Price Commission as an instrument of wage restraint. The Price Commission is not, and cannot be, an instrument of wage restraint. The measure which incorporated it does not allow it and the present membership of the Price Commission would not be prepared to act in that way.
Will my right hon. Friend expand on the answer that he gave earlier to show why he did not use his existing powers in the road haulage dispute? Will he explain why he did not use them, because this is widely taken to mean that the Government are giving the green light to a large settlement?
The report on the road haulage industry was prepared and submitted to me long before the present dispute—indeed before the present claim—and was unrelated to it. There were two things that convinced me that the report could not be implemented. One was that it could concern only a small sector of the industry—about 10 per cent. The second was that a substantial number of companies, even within that 10 per cent., would not have been affected by the order because they were protected by safeguards. Therefore I decided on Thursday not to make the order. My intention was to announce that this morning. When ACAS announced that it was calling the parties to the dispute together on Sunday morning I thought it right to give them that information before the meeting.
Further to the Minister's recent answer, surely he is aware that that report had been published for some time. Why did he allow the road haulage employers to have their hands tied behind their backs for so many weeks, with a threat of a freeze in prices, thus causing the present dispute? They could not fairly negotiate, or open negotiations. Why did he wait until the strike had started before he made his declaration?
There are some Opposition Members who say that I gave in too early and some who say that I should have given in earlier. The Government did not give in at all. The Government have a statutory duty to consult the parties which a report of that sort covers. Those consultations were going on into last week. Had I made a decision on the order without consulting the Transport and General Workers' Union, or the Road Haulage Association, the House would have complained that I had rushed into it, and it would have been right to complain. As it is, I acted towards that report as I act towards every other, and my decision was based on the same sort of criteria as influence me on other occasions.
Will the Secretary of State confirm that both he and the Government had every kind of power that they required over the prices of the BBC and of the road haulage industry, and that they did not lack any powers to use price controls in those two instances? Why have the Government failed to control the wage settlement in both those cases? Why does the Secretary of State think that further powers for the Price Commission, and for the Government in the matter of price controls, will have any more effect than those powers have had?
Before the road haulage dispute began I was advised that any order I made limiting prices in the road haulage industry could apply to only 10 per cent. of the industry because of the industry's nature. Most of the companies were too small and too diverse for an order to be appropriate. Therefore, to say that we have power to influence prices in the industry, let alone wages, is, I think, a travesty.With regard to the BBC, I think that, technically, having put down an order to increase the licence fee, the Government could have reversed or revoked that order. But I have no doubt that the House would rightly have complained that this was a case of politicans trying to control the policies of the BBC—some-thing that we have tried to avoid since the BBC was incorporated. The hon. Gentleman has to do better than that to explain why he signed an early-day motion calling for the abolition of safeguards and now announces that he will vote in the other direction.
Is my right hon. Friend aware that ad hoc decisions of this kind in individual cases have a damaging effect in the pay round? If it were thought that the implementation of any new prices legislation would be subject to ad hoc pressure, would not that be profoundly damaging to the net result? Is that not itself a case for the establishment of a relativities board?
My hon. Friend's question goes very wide in several directions. I say to him at once that I see some virtues—and I tried to describe them last Friday—in some sort of body which makes judgments, at least about public sector pay, because I find it difficult to know how else public sector pay can be determined.On the new Price Commission powers, the position is that the Commission will continue to be governed by the criteria laid down in the Act. The only change in that procedure is that the Government can behave in a way which is less directly against the wishes of companies which intend to put up prices than is the Price Commission recommendation. The Government can be more tender towards companies than the Price Commission proposes. I believe, therefore, that the charge of ad hoc-ery with regard to industry is totally misconceived. The criteria still apply, and those criteria support and protect the industrial interests.
Competition And Restriction Of Charges
asked the Secretary of State for Prices and Consumer Protection if he is satisfied that the need to safeguard the interests of users of goods and services by promoting competition between suppliers or, where competition must be restricted or cannot be promoted (either because certain suppliers control a substantial share of the relevant market or for any other reason), by restricting prices and charges is being taken into due account by the Price Commission.
But is the Minister sure that the consumer is sufficiently safeguarded against price rises in the public monopoly sector? For example, can consumers face with equanimity the miners' pay claim of a 40 per cent. increase or must they resign themselves to sharp rises in electricity prices?
As the hon. Gentleman knows, the powers of the Price Commission relate to the public sector just as to the private sector. To the extent that the Commission is able to intervene to prevent unjustified price increases in the private sector, similar considerations apply in the public sector. It did so notably in the case of British Rail's application most recently, and in a previous case it particularly recommended that the fact that competition was lacking in the South-East in respect to commuters' fares should be taken into account in the next proposed fare increase. That recommendation by the Commission in the public sector was borne in mind by British Rail in making its proposals recently.
On the question of the interests of users, what is the Government's view on the EEC product liability proposals?
I fail to see what that has to do with this Question.
Price Commission (Powers)
asked the Secretary of State for Prices and Consumer Protection if, in the light of the latest figures available for the rate of inflation, he will take steps to increase the price control powers of the Price Commission.
Yes, Sir. As my right hon. Friend the Prime Minister announced on 16 January, we shall shortly introduce legislation to amend the Price Commission Act 1977 by abolishing the requirement for safeguard provisions except following sectoral examinations.
Does my right hon. Friend accept that any strengthening of the Commission's powers will be welcomed by millions of consumers? Does he agree that if the Opposition vote against these proposals they will once again be emphasising their completely hypocritical attitude? They weep tears about rising inflation, but vote against every proposal designed to curb inflation.
I very much agree. The House being of the composition that it is, I think that we shall have something of a battle before we manage to pass the Bill into law, but it is a battle well worth fighting and I believe that it is one that will find support from the people of this country, who want stronger price, legislation and will support a Government who introduce it.
As this is, according to the right hon. Gentleman, a battle well worth fighting, will he say what exactly will he the effect on the overall rate of inflation of the abolition of safeguards in the case of the Price Commission?
It was the hon. Gentleman who speaks for the Liberal Party on these matters who said on television that the Price Commission would have a significant effect on the retail price index. We have never contended that that was so. What we have said is that there are a number of sectors where price increases are not justified, and that where they are not justified they should not be allowed. What has happend over the past 18 months is that the Commission has not been able to use its discretion concerning unjustifiable price increases, and we propose to restore that discretion.
In strengthening the Price Commission's powers, will my right hon. Friend take into account that the amount of inflation generated by wage claims depends entirely on how much of those wage claims is passed on to the consumer? Will he make certain that those firms that give wage increases do not pass on in prices much more than the wage increases in order to increase their profits?
Yes, indeed. The criteria that govern the Commission's behaviour impose on it the principal duty of ensuring that companies at least attempt to meet increased costs by greater efficiency rather than automatically passing them on. To often over the past two years companies have believed that the only response to an increased cost was an increased price. I hope that we can persuade them, one way and another, that greater efficiency is one of the alternatives.
May we revert to the road haulage industry? Did the right hon. Gentleman suddenly discover yesterday that he had no power to interfere in connection with the employers, or did he know it for several weeks? If he did know it several weeks ago, my hon. Friend the Member for Wellingborough (Mr. Fry) is quite right: the Secretary of State is largely responsible for the present state of affairs.
I discovered the situation that I have described during the consultative period. My last consultation with the parties took place last Tuesday. As I told the hon. Member for Welling-borough (Mr. Fry), my original intention was to do what I normally do, which is to announce my decision towards the end of the appropriate period. The appropriate period ends tomorrow, and I would have announced my decision today. But having taken the decision on Thursday I announced it earlier than I had intended in order to allow the parties to know of the situation facing the industry. I am sure that in this particular I was absolutely right to operate in the normal way. If I had treated this order differently from the way in which I have treated other orders, the hon. Gentleman and his party would have been the first to complain.
asked the Secretary of State for Prices and Consumer Protection whether he intends to take further steps to require the display of prices as an aid to consumers.
Yes, Sir. My right hon. Friend intends to develop and extend the present programme of price display to cover other goods and services. I believe that both consumers and retailers benefit from clear and unambiguous price display. I am considering what sectors we should tackle when our present work on cafes and restaurants and misleading bargain offers is completed.
Does my hon. Friend appreciate that there are very strong feelings about this matter and that there is a need for the programme to be carried out as soon as possible, because people will then see that the Government have a resolve to get the matter sorted out?
The Government attach considerable importance to ending some of the misleading practices that have exacerbated housewives' irritation in the shops.
As the Minister mentioned misleading bargain offers, would he like to explain to the House why an undertaking given by the Director General of Fair Trading in respect of mail order catalogues has now been dishonoured by his right hon. Friend, or is there perhaps a kinder explanation?
In respect of my right hon. Friend's proposals on bargain offers, the Government are moving directly in line with the recommendations of the Director General of Fair Trading. So far as the order affects the mail order section of the trade, consultations have been held with that section. It is conceivable that some changes may be made in the published proposals, but the process of consultation is not yet complete.
Does my hon. Friend remember the time when we subsidised basic foodstuffs to an important extent for many people? We then required retail outlets clearly to exhibit maximum prices at which basic foods could be sold. Does my hon. Friend think that that is a good idea for establishing uniformity to prevent exploitation and making sure that people understand that their retailer is not receiving too high a price?
Certain foodstuffs are at present subject to the requirement that the maximum price be displayed. The principal reason for that requirement is to ensure that the subsidy voted by the House was passed on to the consumer. The Government have also introduced requirements that the prices of all foodstuffs shall be displayed when they are sold over the counter for consumption elsewhere. The Government's policy on the display of prices in cafes and restaurants will help to complete that circle.With regard to my hon. Friend's suggestion that maximum prices should be more widely used than they are, there is a risk that maximum prices might be treated in some areas as minimum prices, and that would be most undesirable.
Price Increases (Prevention)
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.
asked the Secretary of State for Industry when he expects to meet the chairman of British Aerospace.
My right hon. Friend meets Lord Beswick frequently.
Does British Aerospace accept that its sale prospects both at home and for export would be much enhanced if it concentrated on the manufacture of quieter aircraft, which would also benefit those who live below the flight path? What is being done on this topic?
The British Aerospace Corporation takes such matters into account, and obviously must take into account the future impact of aircraft noise regulations in various parts of the world. However, I am sure the hon. Gentleman appreciates that the subject of noise is more appropriately one for my right hon. Friend the Secretary of State for Trade.
Has my hon. Friend had an opportunity of discussing with Lord Beswick the threats raised by some of our Community partners internationally against the HS146 aircraft? What action are the Government taking to counter those threats?
I appreciate that there is concern on this issue, and I assure my hon. Friend that all these matters are being kept constantly under review in partnership with British Aerospace.
What consultations has the Minister had with the chairman of British Aerospace about the future prospects of Concorde? Does he agree that the welcome findings in the United States to the effect that this aircraft is quieter than any comparable jet should encourage us to think about the future of Concorde? What is happening in this respect?
I note the hon. Gentleman's enthusiastic comments about Concorde. I only hope that his comments will be echoed by his Conservative colleagues. I assure the hon. Gentleman that the subjects of routes, purchasing and leasing are kept under constant review.
Will my hon. Friend ask the Secretary of State for Industry when he meets Lord Beswick to discuss future collaboration with the airbus consortium? Following that, will he make a statement about this matter before long because many people want to know the details of the programme of collaboration with Europe?
I note my hon. Friend's concern. He will be pleased to know that the proposal to inject £50 million into the airbus project will be discussed by the Standing Committee during the week after next.
Retail Price Index (Weighting)
asked the Secretary of State for Employment what representations he has received concerning the present system of weighting in the retail price index.
Representations have been received jointly from the Civil and Public Services Association and the Low Pay Unit asking for consideration to be given to the construction of a separate prices index for low income households for which a different system of weighting would need to be considered.
Has the Minister seen the findings of the Child Poverty Action Group showing that, as prices have more than doubled under the Labour Government, the hardship faced by the low income families has been severe? Does he agree that such families, who pay a higher than average proportion of their income on food, clothing and rent, have faced considerable hardship under a Labour Government?
I know an elephant when I see one, and it does not require a new set of statistics to prove that those on low pay and fixed incomes have suffered disproportionately, and always will, at a time of high inflation and a wages free-for-all. The sooner the Opposition recognise that fact, the better it will be for those on low incomes.
Does my hon. Friend agree that it is absurd to include two highly dangerous and socially destructive drugs, namely alcohol and tobacco, in calculating the retail price index? Since this has implications for taxation policy, will he consider removing those items from the calculation?
That is a matter which the Retail Price Index Advisory Committee might wish to examine. But those items form a considerable proportion of spending in many households, whether low income or otherwise.
Is the Minister aware that if the Labour Party had not destroyed the tax credit system, which was carefully planned by the Conservatives, those who are now enduring hardship, particularly old-age pensioners, would not now be suffering?
It is time that the Conservatives stopped shedding crocodile tears about those on low pay and pensioners. The Labour Government have taken a number of measures designed to help those on low incomes, and I think that they have been effective.
Given that the purpose of different forms of retail price index is to represent the actual spending of different groups, and in view of the use made of the index relating to pensioners, what response will my hon. Friend make to the representations rather than merely replying that he is receiving them?
No, I cannot say that at present, but those matters are receiving careful consideration. We shall be replying to those two organisations shortly.
Since in some areas of the country, such as Devon and Cornwall, average incomes are way below the national average and yet the cost of living on many items is higher, will the Minister use a tiny amount of computer time to arrange for cost-of-living indices to be prepared and published on a sub-regional basis?
That matter can be examined, but I wish to warn the hon. Gentleman that a further breakdown of that kind will use not merely more computer time but more Civil Service time. I hope the hon. Gentleman will bear that in mind.
asked the Secretary of State for Scotland if he will ensure that adequate reserves of equipment for dealing with oil pollution are immediately available in cases of spillage at Sullom Voe and Flotta.
Local and port authorities have accepted responsibility for oil pollution clean-up in the areas under their control so far as it lies within their capability, and I am satisfied that they have provided reasonable reserves. The Scottish Development Department is reviewing the oil spill contingency arrangements with representatives of regional and islands authorities this week and any lessons to be drawn from the recent Sullom Voe incident including the scale of provision for equipment will be discussed.
Is the Minister aware of the grave concern in Shetland over the failure of the equipment and over the time that it took to get any reserve equipment up to Shetland? Is he saying that there is still no reserve equipment available in Scotland? If so, is this not intolerable, considering the time that has elapsed since oil was first landed in Flotta and now Sullom? Will he give an undertaking that in case of oil spillage adequate reserve equipment will be available immediately in Shetland and in Orkney?
I cannot give the right hon. Gentleman a blanket assurance in those categorical terms. However, discussions have been arranged for this week. We have, in general, confidence in the ability of the Shetland Islands council and the industry to work in co-operation with all Government Departments to provide the cover that he seeks.
In a system by which the major oil companies are making many millions out of oil, why, when there is difficulty, is it always the Government who have to come forward to clean up the mess? What is he doing to ensure that the oil companies put money into cleaning up the pollution which they cause?
The original Question was about what steps were being taken to prevent such spillages and what action was taken in the unfortunate event of any spillages. I am satisfied that the industry is playing its part in taking the required steps.
Is the Minister aware that there will be widespread support for the view expressed by the hon. Member for Aberdeen, North (Mr. Hughes) that the polluter should pay? Will he bring the attention of the Sullom Voe authorities and everybody concerned in his Department to the existence of equipment manufactured by a company called Oil Recovery International in my constituency which has just been given an outstanding report by the Department of Industry's Warren Spring laboratory? Could this be brought into use very quickly, as requested by the right hon. Member for Orkney and Shetland (Mr. Grimond)?
This is not the commercial break in this programme. However, if there is a company which has equipment available and has a service to perform, it will be considered.
European Monetary System
asked the Chancellor of the Duchy of Lancaster whether he has received any representations from people in the Duchy of Lancaster about the European monetary system.
Is my right hon. Friend aware of the widespread relief that the Government have decided not to join the European monetary system at present? Is he also aware of the widespread suspicion that certain Cabinet Ministers are still keen to drag us into a system which would enable the Common Market Commissioners to dictate our economic policy to an even greater extent than the IMF did in 1976, resulting in savage cuts in public expenditure? Will my right hon. Friend assure us here and now that he is not one of those who are giving this bad advice?
What my hon. Friend regards as suspicions others might regard as reasonable hopes. It is absolutely clear, and has been said over and over again, that the Government subscribe to the fundamental purpose of the EMS and have sought to achieve the pre-conditions which would make that system durable and effective. My right hon. and hon. Friends are united in desiring to play a full part in world monetary co-operation and in European monetary co-operation in order to secure greater monetary stability which will avoid the kind of economic crises which have the unpleasant consequences that my hon. Friend has commented upon.
What is the Government's view of the French proposal, in the context of the European monetary system, of limiting the agricultural monetary compensatory arrangements?
The Chancellor of the Exchequer made clear our view on that in the debate on 14th December. To put it in a nutshell, we regard any action in relation to MCAs that adds to food prices in this country as undesirable at this time. We could not support that action.
Have the Government decided whether to take part in the European monetary co-operation fund? If so, will they introduce legislation to authorise this?
The Chancellor of the Exchequer is having discussions at present with the Bank of England on the question of the depositing of reserves. The Government's general position is as I have stated it.
Will the right hon. Gentleman clarify an earlier answer? Is it the position of the Government that they favour a wider international monetary system, but not the European monetary system? On the question raised by my hon. Friend the Member for Oswestry (Mr. Biffen), do the conditions imposed by the French Government mean that it is unlikely to come into operation at all, or does he think it will come into operation at some future time?
On the first question, the hon. Member is raising false alternatives, namely, support for the EMS, and support for a wider worldwide monetary co-operation. Far from the development of European co-operation being inimical to the development of European-world co-operation, we believe that it is part of the development of world monetary co-operation.On the French position on MCAs, some of these questions would be better addressed to the French Assembly than here. The French position is that they have not reopened what was agreed at the European Council. What they are really arguing about is how that decision should be implemented. The Government's reasons for agreeing to the European Council statement on WCAs were explained to the House on 14 December.
Does my right hon. Friend agree that the dangers facing Europe are money instability and inflation, and that it is in the interests of this country and Europe that Britain becomes a full member of the EMS at the first opportunity? Does he agree that, in spite of our current difficulties, it should be our long-term aim to become a member?
I readily agree with my hon. Friend that one of the central dangers for the EEC and the world trading community is the high degree of currency instability which now exists and the uniquely high levels of inflation. I believe the two have an important relationship. A constructive development that is being recognised pretty well all over the world is that we need a greater degree of international co-operation and institutions that will give effect to that co-operation for the purpose of achieving greater monetary stability.As far as the EMS is concerned, my hon. Friend must know that the Government took part in the negotiations and played a leading role in seeking to ensure that it achieved the kind of conditions and structures required for its permanent effective durability. So far we have not been able to meet all these criteria but the Government remain firmly pledged in principle to the concept of European monetary co-operation and the appropriate development of the EMS.
Does the Chancellor of the Duchy agree that, whether the United Kingdom does or does not join the EMS, the Government should have the overriding objective of securing the most stringent control of the money supply?
I do not know what "stringent control of the money supply" means. Perhaps that can await another Question Time or another debate. Whatever our relations with the EMS, we intend to maintain the stability of sterling to the best of our ability in relation to all the countries with whom we trade.
Does my right hon. Friend recall that on Thursday the Chancellor of the Exchequer agreed that if the French request for the phasing out of MCAs was agreed to it would cause increases in food prices in Britain? Has he seen the report in the Financial Times this morning which puts that estimate at no less than £1 billion? In view of the fact that the Opposition policy is to phase out the green currencies, will not their policy cause considerable inflation to which the Government are opposed?
I am willing to join my hon. Friend in his criticism of Opposition policy. I welcome the direction of his criticism. On the phasing out of MCAs, we made clear that we would be opposed to any change at present calculated to increase food prices in this country.
Since the Government failed, through severe political weakness, to join the EMS, have not the currencies of the Common Market members remained within the parameters set by the EMS? Will the Chancellor of the Duchy say clearly whether the Government still hold open the possibility of joining the EMS, and, if so, what timescale they envisage?
Of course we are open to join the EMS. By "we" I mean the Government. The hon. Member referred to political difficulties, but they were not decisive in affecting the final outcome. I remind the House that there is more than one view on the Opposition side of the House. The Leader of the Opposition was able to voice both views within a fortnight when these discussions were taking place. When there is talk of political opposition, the House should bear in mind that this is understandably a subject upon which opinion is divided, on both sides of the House. My own opinion has been made clear on more than one occasion.