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Price Increases (Notification)

Volume 972: debated on Monday 22 October 1979

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asked the Secretary of State for Trade what information he obtains about individual price increases since the revocation of price increase notifications under the Price Commission Act.

Individual price increases of public concern will, by definition, be known to me.

Is not the abolition of notification part of what the Secretary of State called the abolition of administrative bumf? Is not the truth of the matter that by abolishing both notification and the Price Commission the Government's policy is a combination of impotence and ignorance?

The effect on the retail price index of the abolition of the Price Commission will be negligible. As only companies with a turnover of £15 million in the manufacturing industry and £12 million in retail trade had to pre-notify price increases, they were not representative of the whole picture. In any case, as the Price Commission, on its own reckoning, was able to intervene in less than 1 per cent, of the pre-notified price increases, the effect on inflation generally was negligible.

Can the right hon. Lady explain how the Price Commission managed to do so much damage to industry if it had so little effect?

There is a perfectly simple explanation. The uncertainty created throughout industry was where the damage was done. It was not the price controls themselves but the uncertainty that they caused that undermined business confidence and prevented investment.