asked the Secretary of State for Prices and Consumer Protection what is his estimate of the effect on the Retail Price Index of the increased employers' contribution to national insurance.

My right hon. Friend the Chancellor of the Exchequer told the House on 1st August that the estimated effect would be to add about 1 per cent. to the RPI by early 1978.

Does the Minister agree that to add anything to the RPI at this time is retrogressive? Why not bear in mind small businesses and industrial costs in areas such as that from which I come? If the Government want to regenerate British industry, why not cut expenditure instead of taxing jobs?

I presume the hon. Gentleman will accept, because his party has been pressing for it, that the public sector borrowing requirement must be reduced at this time if the rate of inflation is to be contained. It is an important part of the Chancellor of the Exchequer's strategy to bring that about. Secondly, the hon. Gentleman will appreciate that the immediate impact of that will not be felt until May, and therefore to some extent his point is taken.

asked the Secretary of State for Prices and Consumer Protection what has been the increase in the price of materials and fuel purchased by manufacturing industry over the past 12 months.

The Wholesale Price Index for materials and fuels purchased by manufacturing industry rose by 29·1 per cent. in the 12 months to September 1976.

Does the hon. Gentleman agree that that is a rather alarming increase? Will he tell the House how much of it is attributable to the decline in the value of sterling, and therefore tell the consumer how much he is paying for the excessive Government expenditure that has contributed so much to this depreciation of sterling?

The decline in the value of sterling is certainly a major factor, and the unacceptable trend in the figure, in so far as one month's figure can be expressed in that way, is due largely to changes in the price of food.

Will my hon. Friend also indicate to the House how much of this is due to our entry into the European Community? Secondly, will he indicate how much this has been the result of the floating of the pound, which was introduced by the Tory Government?

The further one gets from the date of entry into the Common Market, the more unrealistic it is to seek to quantify the impact of membership on food prices. The floating rate is a matter for my right hon. Friend the Chancellor of the Exchequer.

Why will not the Minister give my hon. Friend the Member for Hove (Mr. Sainsbury) the facts for which he asked? Is it not the case that the Economist commodity indicator has risen by nearly 50 per cent. during the last 12 months in sterling terms but in dollar terms by less than 20 per cent., and that this gives a real picture of the lack of confidence in the Government?

It is true that during the past 12 months the exchange rate of sterling has gone down by about 17 per cent, and world commodity prices are up by 23 per cent., according to the dollar index of the Economist. Those are the facts, and they are a measure of the seriousness of the situation that the country faces.

Would it not be sensible to tell the Opposition that one reason—not the only one—why this problem is with us is the intense speculation against sterling by their friends and, perhaps more importantly, the constant hoarding of commodities and the buying-in of commodities that has pushed up prices during the past nine months?

I have no evidence of the hoarding of commodities to which my hon. Friend refers. Questions about speculation against the value of sterling are more for my right hon. Friend the Chancellor of the Exchequer, but my hon. Friend will have noted the words of the German Chancellor that the £ sterling is seriously undervalued.

Would the hon. Gentleman regard it as speculation if an investor withdrew his funds from a company in which he no longer had any confidence?

That is a hypothetical question and does not relate directly to the one that I have answered.

asked the Secretary of State for Prices and Consumer Protection if he will make a statement on the rate of price increases at the latest convenient date.

asked the Secretary of State for Prices and Consumer Protection what was the annual rate of inflation at the latest available date.

asked the Secretary of State for Prices and Consumer Protection what has been the increase on the Retail Price Index over the last 12 months.

asked the Secretary of State for Prices and Consumer Protection what is the latest monthly rise in the Retail Price Index; and if he will make a statement.

asked the Secretary of State for Prices and Consumer Protection what is his current estimate of the increase in the Retail Price Index during 1976 to date.

The monthly increase in the Retail Price Index to August 1976 was 1·4 per cent., giving an annual increase of 13·8 per cent., just over half the increase at August 1975, and 7·2 per cent. since January 1976.

I thank my right hon. Friend for that answer and congratulate him on his appointment to the Cabinet, but will he say why, having given that figure which is still 13·8 over 12 months, the Government are proceeding with the abolition of food subsidies when their retention was a main plank in the election manifesto on which we came to power?

An essential element in the programme for economic recovery is, and must be, a reduction in some element of public expenditure, and the announcement that my right hon. Friend the Chancellor of the Exchequer made in July about food subsidies is part of that. I am sure that the people whom my hon. Friend and I represent have much to gain from the progress of economic recovery, and this is all part of the plan for bringing that about.

By how much does the right hon. Gentleman estimate that the lowering of the value of sterling will affect the RPI in future months, because we have not yet felt the full effects of this?

It is impossible, and were it possible it would be reckless, to make estimates which would be guesses about future movements, particularly if they were as specific as that. Perhaps our overwhelming obligation is to stabilise the relationship between the pound and the dollar. That is as important to people who buy their shopping and purchase goods and groceries every week as it is to every other section of the community, because it reflects in the RPI. I promise that later this afternoon my hon. Friend will hear a robust account of how we are carrying out policies that will defend the rate.

Has my right hon. Friend seen the effect of this rise on the social contract and the development of pay policy?

The first thing to say about the figures I have given and pay policy is that the spectacular improvement in our inflationary situation—the reduction in the rate by 50 per cent. in a year—is almost entirely attributable to the sacrifices made by the trade union movement in signing the social contract. I believe that the trade union movement is wise enough to realise that, as long as the Government go on doing what they can to limit inflation, it has a duty to itself, its members and the nation to go on co-operating with the Government. I am sure that it is wise enough and public-spirited enough to go on doing that.

Will the right hon. Gentleman give my hon. Friend the Member for Reading, North (Mr. Durant) a rather more specific answer? Is it not a fact that the Wholesale Price Index is beginning to rise again very rapidly with a recent increase to an annual rate of 17 per cent. and that this is reflecting the fall in sterling? Will he give us some guidance? For example, if the rate of exchange is one dollar to the pound by the end of the year, what will be the effect on the RPI?

I shall not hypothesise about a proposition as wildly improbable as that, but I am prepared to agree with the hon. Gentleman on the obvious point he has made already. The depreciation of sterling clearly affects the prices of imported raw materials and, therefore, has an adverse effect on the cost of living index. It is one of the reasons why we are doing all we can to stabilise it.

Does my right hon. Friend agree that it is not good enough for the Labour Government to expect trade unionists to make all the sacrifices to defeat rising prices? Is it not about time we imposed stricter price controls on big business, especially in view of what we have learnt recently about the sharks in television rental businesses making excessive profits from working people and their families?

My hon. Friend the Under-Secretary is talking to the television rental companies this week, and I hope to make an announcement towards the end of this week or at the beginning of next week. I agree about how cooperative the trade unions are in responding to what we think to be the needs of the nation.

First, on a purely personal basis, may I congratulate the new Secretary of State on his appointment and, still on a purely personal basis, wish him well.

I am personally very grateful for the hon. Lady's personal congratulations. I hope she will take it from me that if the occasion arises when she asks me questions with any content I shall do my best to answer them.

asked the Secretary of State for Prices and Consumer Protection what effect the Consumer Transactions (Restrictions on Statements) Order will have upon the availability of hire-purchase facilities on domestic goods.

I do not consider that the Order will have any effect on the availability of hire-purchase facilities.

As the Order will undoubtedly increase the cost of credit to shoppers, will the hon. Gentleman say whether that is the Government's intention or whether it is merely another example of the accidents which unfortunately seem to continue to befall this Government?

I do not accept the hon. Gentleman's premise that the Order will increase the cost of finance. It will increase protection for the consumer, and I think that the whole House will welcome that.

asked the Secretary of State for Prices and Consumer Protection whether he will make a statement about future Government policy towards price control.

The present statutory powers to enforce a Price Code will expire on 31st July 1977, and I am considering what should follow.

Will the right hon. Gentleman take the House into his confidence and tell us whether it is a permanent feature of this Government's policy to have price control? Does he recognise that the present system of price control is preventing the creation of precisely those profits in industry which the Chancellor of the Exchequer says are essential for the country's recovery?

The main permanent features of price control which are existing law are those passed into law by the Conservative Government in 1973. It is my duty to decide between now and next summer what the future of price control should be. I think the hon. Gentleman will concede that we must clearly look at this matter with the greatest care and realise our obligation to do what we can to maintain the social contract and limit the rate of inflation. This is an overwhelming obligation, and clearly the Government have some rôle to play.

Is my right hon. Friend aware that in Malta Mr. Mintoff has instituted a system whereby every resident is allowed a certain quantity of basic commodities, such as sugar, at rock-bottom prices and that above that quantity he is charged a very much increased price? This has kept prices generally down. Will my right hon. Friend consider that system for this country?

I used to deal with Malta in my previous job. I think that I am entitled to be spared that now.

Is the right hon. Gentleman aware that with interest rates at their present level a firm must make 16 per cent. before it can break even on an investment? If the firm then makes 16 per cent., according to Sir Arthur Cockfield's view of the television rental business it is making excessive profits. What are poor business men to do?

We shall have the opportunity to debate the code in general this evening. If the hon. Gentleman is saying on his own behalf or on behalf of his party that he thinks that Sir Arthur Cockfield is wrong, and that television rentals are not too high and should not be stabilised, I hope he will make it absolutely clear here and now.

asked the Secretary of State for Prices and Consumer Protection what is his estimate of the effect on prices of the additional investment relief announced in the consultative document and the additional relief announced by the Chancellor.

It is not possible to make accurate estimates of the effect of individual Price Code changes on the overall price levels. We estimate that the total effect will be an increase of about 1 per cent.

What will be the effect on consumer prices of the £1 million a day extra cost to industry which the CBI believes to be the result of raising the minimum lending rate to a record 15 per cent.?

It depends on many imponderable factors, such as how long the minimum lending rate continues at that level and the effect of the depreciation of sterling, or—as I hope and believe—the rate of appreciation of sterling. Because of these difficulties, it would be unwise to make arithmetical estimations.

Does the right hon. Gentleman agree that when that concession was introduced in the Price Code the intention was to stimulate investment? Does he agree that, in view of today's interest climate, that intention will not be realised? Will he therefore revise the provision in the Price Code on interest relief?

I cannot agree, and I shall try to express my disagreement at greater length tonight. For the moment, I remind the hon. Gentleman of something said on television by the Director-General of the CBI, I think on Thursday evening, that industrial investment decisions will depend far more on companies' views of stability, and the success which I believe last Thursday's measures will certainly have, than on a couple of points on the minimum lending rate. I am sure that that is a correct analysis.

asked the Secretary of State for Prices and Consumer Protection if he proposes to introduce legislation amending or extending the Trade Descriptions Act 1968.

The report on the review of the Act carried out under the chairmanship of the former Director General of Fair Trading will be published very shortly. The Government will give careful consideration to its recommendations before announcing their intentions regarding possible amending legislation.

If any review of the Act is likely to include clarification of the position of airlines on overbooking, will the Minister take into account the decision of the American authorities, who recently declared that such a practice was no longer to be considered illegal provided the intending passenger was told of the possibility in advance? In view of the great difficulty that airlines would experience if overbooking were declared a malpractice under the Act, will the hon. Gentleman approach the matter along those lines in this country too?

What the Act prohibits is false statements about the provision of services generally. It does not make the practice of overbooking illegal. I am sure that the hon. Gentleman will have welcomed the provisions announced by another Department for compensation arrangements. For the rest, I ask him to await the report. We shall be pleased to receive representations and recommendations from the travel trade.

asked the Secretary of State for Prices and Consumer Protection what are the latest figures available for the weekly benefits provided by food subsidies to the average family and typical pensioner; and if he will make a statement.

asked the Secretary of State for Prices and Consumer Protection if he will estimate the current weekly savings in food expenditure due to food subsidies for: (a) a single retirement pensioner, (b) married retirement pensioners, (c) a married couple with two children, and (d) a married couple with four or more children.

The current weekly savings on food expenditure due to food subsidies are estimated to be: (a) for a single old-age pensioner, 20p; (b) for a married couple with two children, 58p; (c) for an old-age pensioner couple, 32p; (d) for a married couple with four or more children, 94p.

Will my hon. Friend accept that some Labour Members are not all that impressed by the argument of the Secretary of State in regard to the direct relevance to economic revival of the phasing out of subsidies? Does he not agree that, in view of the important stress laid by the Government on the redistributive effect of these subsidies, the phasing-out operation will have the effect of transferring money from the pockets of the poor to the well-lined pockets of the rich?

The Government have always accepted, although the Opposition have not done so, that food subsidies are redistributive. Their value is about four times greater for the lowest income households than for the highest income groups. That is why they have been regarded as an important contribution to social assistance during the time when the Government have been phasing in the new social security benefits. We shall make the fourth uprating in these benefits in November. I believe that any further redistribution should be done through the tax system and through social security.

Will the Minister say how the value of these food subsidies compares with the increase in the cost of food, especially to poor families, in the last two and a half years?

Not without notice.

Will my hon. Friend accept that when the Chancellor of the Exchequer made a statement about the phasing out of the food subsidies in July the inflation rate was falling, whereas that is not now the case? Will he tell his right hon. Friend the Secretary of State for Prices and Consumer Protection that he has the responsibility to go back to the Chancellor of the Exchequer and underline the extreme importance of these food subsidies for lower income families and pensioners?

The mportance attached by the Government to food subsidies is mirrored by the fact that we are spending more than £400 million on them this year. The major contribution which the Chancellor of the Exchequer wishes to make in bringing down the rate of inflation, which has at present reached a plateau rather than falling, must be through stabilising our currency. It was with the objective of reducing the public sector borrowing requirement that my right hon. Friend announced measures in respect of food subsidies.

As the cost of food to the pensioner, and, indeed, to everybody else, is directly related to the depreciation of our currency, will the Minister explain why the three major post-war depreciations in our currency have come under Chancellors of the Exchequer Cripps, Callaghan and Healey? What is so special about Socialist Governments that they always destroy our currency?

What is so special is that they followed Conservative Governments.

asked the Secretary of State for Prices and Consumer Protection where he intends to make cuts in food subsidies in the year 1977–78.

Decisions on the rate and level of subsidies are taken from time to time in the light of current circumstances.

In regard to the earlier reply about the average saving of 58p to a family with two children, does not the Secretary of State agree that the fall in sterling in September alone added 90p per week to the average family's household budget? Since public expenditure is such a major contributor to sterling's weakness, would it not be of much greater benefit to the average family to announce today that food subsidies were to be cut?

If the hon. Gentleman wants me to say again that the depreciation of sterling has an adverse effect on the Retail Price Index, I shall repeat it for the fifth time if that gives him any satisfaction. As for subsidies, or indeed the entire public expenditure issue, he must understand that the people I represent are net gainers from much of the public expenditure that takes place in our nation. The people who are in the lower 10 per cent. or 20 per cent. of the income bracket have much to gain in their own personal everyday lives from what the Government provide through public expenditure. The Government's duty is to balance expenditure levels against overall economic necessities, and that is what we are doing.

Before my right hon. Friend phases out food subsidies, will he seek to phase out the common agricultural policy of the EEC, which is effectively harmonising our prices with the high prices of food which persist on the Continent? Does he not appreciate that British housewives believe that it is crazy for the EEC to be contemplating an increase in the price of margarine in this country because of the butter surplus? When will this crazy system stop?

Even when I was more responsible for EEC matters than I am now, I was always prepared to say that I regarded the CAP as an unacceptable system which should and could be changed. I believe that that will increasingly be the Government's policy. I said publicly last week, and I am happy to confirm today, that the idea of a tax on margarine to compensate for the butter surplus is unacceptable to the British Government and cannot become the policy of the EEC. Furthermore, the British Government are committed to doing whatever we can to limit price increases within the EEC. I refer my hon. Friend to the stand taken by my right hon. Friend the Minister of Agriculture in Brussels last week in rightly refusing to increase the rate of the green pound. I believe that that must continue to be our position.

asked the Secretary of State for Prices and Consumer Protection by what percentage the cost of living has increased since February 1974 to the latest available date.

By 55·9 per cent.

Will the Government apologise to the British people for that appalling performance?

I think the British people understand that the Government have taken decisions that are necessary in the circumstances. We have taken them in the light not only of economic necessities but of the obligations of compassion and social understanding on which we were elected. I hope that we shall go on doing exactly that.

If that is compassion, God save us from cruelty.

What is the difference between the figure the Minister has just announced and the figure of 8·4 per cent.?

My arithmetic is not sufficiently good other than to say that it is more than 40. I hope the hon. Gentleman is not falling into the common, if not vulgar, error of assuming that two periods of inflation can be compared. They cannot.

Does my right hon. Friend recall that many Labour Members were cajoled into supporting the Government's policy of keeping down the rate of inflation and the cost of living on the basis of backing the pay policy, with its subsequent effect in reducing purchasing power? Why is it that on the basis of those concessions trade unionists must now suffer an enormous increase in the cost of living? What is the Government's strategy to get down the cost of living in future?

The trade unions, their members and their wives and other consumers have to face the present situation because there are some immutable economic laws that neither trade unions nor the Government can defy. I believe that in responding to those immutable economic laws the partnership of the trade unions and the Government is working. The trade unions and the Government have to realise, as in general I believe they do, that this is a long haul. Although we have begun the process, there will yet be some period before we can claim the success that we hope to achieve.

Does not the right hon. Gentleman agree that during the latter part of the period about which he is answering questions the so-called Price Check Scheme was in operation, and that within the four months of the ending of the scheme the prices of most of the main items in the scheme have risen by over 10 per cent., as I predicted? Therefore, will he confirm that the scheme was a short-term confidence trick?

I confess frankly to the hon. Lady that when I took on my new job I had some scepticism about that scheme, but, having examined the scheme during the first days in my new office, I discovered that there had been real tangible and substantial price benefits. If the hon. Lady wishes to table a precise Question on the matter, I shall endeavour to give her a precise answer.

Has my right hon. Friend made any calculation about the increase in the cost of living that would result from the abolition of council house subsidies and free school meals, as advocated at Brighton last week?

We have not yet made an arithmetical calculation because it does not seem to us that the circumstances will come about which would allow such policies to be put into operation. Two things are clear. The first is that there would be an enormous increase in the cost of living. The second is that such policies would destroy the social contract, on which the success of the last two years has been built and without which I believe this country.—[HON. MEMBERS: "Success?"] Right hon. and hon. Members on the Conservative Benches must decide whether they believe that a cut in the inflation rate of 50 per cent. is a substantial achievement. If it is, it has come about because of the social contract. The policies to which my hon. Friend has referred would result in the social contract being abandoned.

asked the Secretary of State for Prices and Consumer Protection what will be the overall impact on the cost of living as a consequence of the Chancellor's statement on public spending restrictions, the relaxation of the Price Code and the common agricultural policy during the years 1977 and 1978.

It is not possible to make meaningful forecasts over such a long period.

Does my right hon. Friend agree that a policy that restricts wages and salaries in isolation is not adequate and is certainly unfair? Does he agree that greater emphasis should be placed on the control and restriction of profits and prices if the social contract is to survive?

No one could support a policy which placed the burden of economic recovery solely on wage earners by limiting their wages. As well as having an effective and socially just wages policy, we must ensure that we have a prices and profits policy that meets our social requirements. That does not mean an all-out attack on profits no matter what their use may be. It means an attempt to ensure that when profits are made they are properly used for new investment and for creating new jobs. That is our policy.

As regards the latter part of the Question—namely, the common agricultural policy—will my right hon. Friend give a further assurance that the Government will resist the pressure coming from the Opposition via the National Farmers' Union for a devaluation of the green pound, which would mean a substantial increase in the cost of living for the very poor people whom we are out to protect?

I said publicly last week that if we were to accept a total revaluation of the green pound it would result in a 7 per cent. increase in the food index. Clearly, in present circumstances that is unacceptable. I have no reason to believe that the Government will change their mind on that.

Will the Secretary of State give an indication of what the Government believe should be an adequate level of profit, in view of the Price Commission's recent statement that 16 per cent. is excessive? What is the Secretary of State's view on the average level of profit?

That clearly varies from industry to industry. Even then it is calculated not on one but on two rather complicated economic formulae. We shall have an opportunity to debate those formulae this evening. That will be a better opportunity than to do so in 30 seconds at Question Time.

asked the Secretary of State for Prices and Consumer Protection if he will redistribute the total subsidy now paid on butter equally between butter and margarine.

No, Sir. It would be inappropriate to extend the coverage of the subsidy programme at this stage.

Would not my hon. Friend agree that there is a case on egalitarian and health grounds, there being no cholesterol in some margarines, for this equal subsidy? Can he assure us that the Government will not be talked out of rejecting the proposals which are currently being made in the Common Market for increasing the price of margarine?

My right hon. Friend has already made clear the Government's firm opposition to this proposal and, therefore, the impossibility of its coming to fruition. The health point was in my right hon. Friend's mind when the rate of subsidy on butter was adjusted earlier in the summer. It is too late in the subsidy programme to seek to set up the apparatus of control that would be necessary to introduce a new subsidy.

Is it true that if the green pound were devalued to its right level the increase in the cost of food in this country would be 7 per cent.?

That is what the NFU wants.

That is, I believe, correct. That is why the Government have resisted a devaluation of the green pound.

Do I take it from the earlier reply that if Mr. Lardinois persists in his absurd proposal for placing a tax on margarine the British Government will veto it?

The British Government, in my presence, have made their views entirely clear in the current Council of Agriculture Ministers. This is an unacceptable proposal, not only to the British Government.

asked the Secretary of State for Prices and Consumer Protection what has been the total cost to date of the Metrication Board.

Approximately £4½ million since the board was established in 1969.

Will the Government now take a close look at the Metrication Board to see whether it can be pruned or, preferably, axed altogether? Would it not be best now to end the obsessive dogmatic attachment to total metrication and instead to operate both systems of measurement?

It would be a great disservice, particuarly to many millions of children who have been educated in the metric system, if we were to maintain a dual system of measurement. The best way is to proceed with our Weights and Measures, &c. (No. 2) Bill and adequately to consult consumers, linking this with consumer protection, eventually having one unconfusing system.

Following the experience gained from the partial conversion to metrication, may I ask whether the Government are now in a position to give an estimate of the total cost to the country of converting to metrication?

I cannot give an accurate figure, but the cost is not as high as some have made out. It is possibly no greater than the cost of not completing the metrication programme.

Can the Minister say whether he has persuaded his own Back Benchers that it is right to allow us to debate this question, so that we may end the uncertainty not only in education but among business men and manufacturers of products who are uncertain about what they should do?

I am grateful to the hon. Lady for her comments. I hope that we shall have the chance to debate these matters next week.

Apart from the demands coming from schoolchildren about metrication, can my hon. Friend tell the House what other quarters are making such representations to him? Is he aware that I have made inquiries in industry recently and have found that there is little demand for a move in this direction?

The Weights and Measures, &c. (No. 2) Bill, which has now passed all its stages in the House of Lords, has the support of many responsible consumer organisations in the country, including the National Consumer Council.

asked the Secretary of State for Prices and Consumer Protection what has been the increase in the Retail Price Index over the past 12 months in the United Kingdom, the United States of America, France, West Germany, and Japan, respectively.

The annual increases in consumer prices up to July 1976, the latest month for which consumer data are available for all these countries, were 12·9 per cent. in the United Kingdom, 5·4 per cent. in the United States of America, 9·4 per cent. in France, 4·1 per cent. in West Germany and 9·5 per cent. in Japan.

Will the hon. Gentleman explain how on earth his right hon. Friend can maintain that there has been a spectacular improvement in our rate of inflation when the rate of inflation is still miles above that of our main competitors?

It is simply that the rate of inflation last July was running at well over twice the OECD average. We have reduced this rate to about half as much again as the average inflation rate. That is a great improvement for one year but it must be sustained.

Has not this increase in the British rate of inflation as compared with that of other countries been largely due to the profligate increase in the money supply which took place when the Conservatives were in Government, especially during the last two years of the Conservative Government?

It is certainly fair to say that the voices from the Conservative Benches that we now hear were not raised at that time.

Is it not clear that, compared with other countries, the performance of the United Kingdom over the past two years has been absolutely abysmal? Is not the "spectacular" achieve- ment of the Government spectacular only in its ineptitude?

I do not think it helps the country to underrate the considerable achievement which has been made by working people in contributing to bringing down the rate of inflation, as they have done in the past year, by showing considerable restraint in their wage demands. They must be given full credit for offsetting other disadvantageous trends that have taken place, notably increases in the prices of commodities. Frankly, I believe that the hon. Gentleman would do well to recognise the extent of the achievement and seek to support our efforts to build on these foundations.

Has the hon. Gentleman noticed that the average level of inflation over the past year for the countries he has mentioned is half that of this country, despite the fact that those countries have also had to face rises in raw material prices and the drought? Will he confirm that the imminent fresh inflationary outburst that we are about to encounter has been caused mainly not by the drought or increases in raw material prices but by this Government's ruinous policy over the past two and a half years and their failure, even now, to respond to economic reality?

As is not infrequently the case, the hon. Lady is wrong in her facts. The inflation rate which I quoted was 12·9 per cent. as against the average annual inflation rate of 7·9 per cent. in the other OECD countries listed. The picture is a good deal better than it was at the same time in the previous year. The hon. Lady—[interruption]. If the hon. Lady wishes to intervene again, she must catch Mr. Speaker's eye.

asked the Secretary of State for Prices and Consumer Protection what further proposals are being considered to improve the protection of consumers.

I have nothing to add to the reply given to my hon. Friend on 5th July.

Does my hon. Friend agree that at a time of inflation the need for consumer protection is greater than ever? Does he agree that there should be extra public expenditure to make it possible to continue to open new consumer advice centres throughout the country? Does he further agree that such centres are doing valuable work and preventing a good deal of unnecessary private spending?

He would he a rash man who promised an increase in public expenditure at present, but I agree with my hon. Friend that consumer advice services and price surveys have a significant part to play in the battle against inflation. I hope that we shall continue with them.

Does the Minister agree that one way of protecting consumers, without public expenditure, is for them to take advantage of competition among retailers?

Yes, that is one of the ways of beating inflation. However, we cannot have perfect competition without perfect information, and that is why the two activities are complementary.

Will my hon. Friend have a word with the Minister of Agriculture, Fisheries and Food and suggest that we should possibly opt out of the common agricultural policy, which is now accounting for two-thirds of our deficit with the Common Market countries, an opting out that would mean a great saving for the British housewife?

My right hon. Friend has already made clear in answer to earlier questions our critical view of the common agricultural policy.

asked the Secretary of State for Prices and Consumer Protection what further amendments he will now consider making to the Price Code.

A new Price Code came into operation on 1st August after extensive consultations with all interested parties. I have no present plans to change it.

Given that the Price Code Order that we shall be debating tonight was published some time ago, is there not a clear-cut case in the light of recent events for further and immediate relief in the areas of investment, profits and land?

No, I think not. I hope to convince the House this evening that the revision which we propose will give all these companies a chance to increase prices, to increase profits and to invest. It will give them the opportunity to do so, and that remains our policy.

To assist the House when it considers the continuation of the Price Code, will the Secretary of State publish a comparative study of price controls in other countries which appear to be more successful in controlling inflation and stimulating investment?

As the hon. Gentleman will imagine, during the past five weeks I have been considering price control techniques, mechanisms and philosophies in other countries. I have noted with interest the systems that operate in diverse social systems such as Sweden and France. They are extensive "inspector" systems which send Government representatives to retail outlets in a way that would produce an outcry from Opposition Members if we contemplated any such system. I think that the hon. Gentleman will have to bide his time and wait for the summer, when the present price control system runs out, to hear my conclusions on the system.

asked the Secretary of State for Prices and Consumer Protection if he will hold consultations with the industry concerning the level of prices of children's shoes.

I understand the concern about the price of children's shoes, but I would prefer to await the outcome of the footwear industry study being conducted under the auspices of the Department of Industry and of the Director General of Fair Trading's consideration of the feasibility of a reference to the Monopolies and Mergers Commission before deciding whether anything further needs to be done.

I thank my hon. Friend for the information that something is in train, but will he express a little greater sense of urgency and tell us when and in what form the inquiries and studies will be published?

I understand from the Department of Industry that the study is expected to be completed towards the end of the year.

Will the hon. Gentleman recognise in his representations to other Ministries that the industry has suffered excessively from dumped merchandise and export competition? Does he recognise that it is in no one's interest to cut back on the standard of children's shoes?

I have noted the hon. Gentleman's point.

In these consultations with the industry, will my hon. Friend take into consideration possible differential advantages for well-designed shoes that do not malform girls' feet? Will he consider introducing financial incentives for producing healthy rather than unhealthy shoes?

That is an important point and one which I am sure my hon. Friend will draw to the attention of my colleagues in the Department of Health.

asked the Secretary of State for Prices and Consumer Protection whether he will make a statement about the Government's metrication policy.

I made clear to the House in reply to Questions from the hon. Member for Macclesfield (Mr. Winterton) and my hon. Friend the Member for Newham, South (Mr. Spearing) on 27th May that, following widespread consultations, the Government intended to seek powers to secure the orderly completion of the metrication programme. The Weights and Measures, &c. (No. 2) Bill now before the House seeks these powers and the Government will be fully setting out their views during the Second Reading debate, which I hope will be taking place shortly.

Will the Minister give an assurance that the general public will be consulted through the Government's social survey before setting any cut-off dates for imperial measurements?

I have been most anxious to ensure that there is maximum consultation with consumer organisations, not least with the most vulnerable members of the community, and that consultations take place before any Order is put before the House for its approval.

Will my hon. Friend reiterate that it will be the Government's policy to protect the consumer when metrication is introduced and to ensure that we do not have a repetition of what happened when decimalisation was introduced, which was against the interests of the consumer?

I can give that assurance. I am grateful for the comments and discussions that I have had with Members of Parliament and outside bodies. I shall try to build into any change of programme the maximum degree of consumer protection and to link metrication measures to measures of consumer protection—for instance, prescribed quantities.

Am I right in assuming that the Government have no intention of moving to kilometres and all the road-sign costs that would be involved?

The completion of the metrication programme will eventually mean changing to kilometres, but I can assure the hon. Gentleman that that is not by any means a priority.

asked the Secretary of State for Prices and Consumer Protection what has been the effect on the Retail Price Index of the increase in prices of nationalised industry products and services over the last 12 months.

asked the Secretary of State for Prices and Consumer Protection what has been the most recent year-on-year increase in the prices of nationalised industry products.

The prices of those nationalised industry goods and services included in the Retail Price Index rose by 23·6 per cent. from August 1975 to August 1976, resulting in an increase of about 2 per cent. in the General Index.

Is the hon. Gentleman aware that all we get out of the nationalised industries is, on the one hand, large losses from some of them, which the taxpayer has to pay, and from others increased prices, which the consumer has to pay? Is that not an indication that this is a thoroughly unsatisfactory way of running industry?

The large deficits which the nationalised industries faced were due to the Conservative Government's regressive subsidisation of the industries and their refusal to permit them to price commercially or even to move in that direction, as the hon. Gentleman ought to know. The difficulties which have been faced as a result of price increases in the past year are largely due to the phasing out of the deficits.

Will my hon. Friend confirm that it is the height of hyprocrisy for Opposition Members to complain about the losses of nationalised industries and then to criticise those industries and the Government for seeking to make good the losses by charging economic prices? Will my hon. Friend pay regard to the impact of some of the increases and the rate at which they are introduced, particularly on low-income families and the unemployed?

That is a clear illustration of the point I was making earlier—namely, that Labour Governments have to clean up the mess left by their predecessors.

Is not the hon. Gentleman aware that the numerous changes in accounting and depreciation policies of some nationalised industries suggest that there is a need of a review of the costing policies of these industries to ensure that the tariffs are not an inequitable form of taxation regardless of the needs of the individual?

Some consideration of the equitability of the tariffs, especially in respect of the gas industry, was undertaken at the behest of my right hon. Friend earlier last year. It is important to recognise that in the year ahead, as a result of the efforts made by the nationalised industries, we can expect a period of relative price stability.

asked the Chancellor of the Duchy of Lancaster when he next intends to visit the Duchy of Lancaster; and what ministerial duties he intends to undertake during his visit.

I carry out most of my Duchy of Lancaster responsibilities from London. However, I visit the Duchy regularly, not least because my constituency lies within it.

As Lancaster is quite near Blackpool, would it not be appropriate for my right hon. Friend to listen to some of the advice given in Blackpool and condemn any further massive cuts in public expenditure which would cause decreases in essential social services and increased unemployment in Lancaster, Scotland, North-East England and many other deprived areas of the United Kingdom?

Although Blackpool unquestionably lies within the boundaries of the Duchy, the Duchy takes no responsibility for the political conferences which from time to time occur or the oratory which accompanies those conferences.

Will the Chancellor please go to Lancaster City itself and while there take a look at the Housing Corporation project for building 240 houses at Scale Hall Farm, on which £500,000 has already been spent on infrastructure, roads and services but on which his colleague at the Department of the Environment has now forbidden work to proceed? Will he then return and convince his right hon. Friend that this plan must go ahead if a lot of public money is not to be wasted and great hardship caused?

Anxious as I am for the well-being of all parts of the Duchy, I sometimes find it possible to resist the claims of Lancaster upon my time. I will, however, see that the points made by the hon. Lady are fully, carefully and sympathetically looked at.

Since we are told that devolution is good for us, may I ask whether my right hon. Friend is pressing for a legislative assembly in Preston?

No. At the moment, the Duchy is satisfied with a one-man legislative and consultative assembly.

As special economic adviser to the Cabinet, what personal responsibility does the right hon. Gentleman take for his Government's disastrous failures—or is he telling us that his advice has not been heeded?

The hon. Gentleman must be aware that all members of the Government always agree with each other on policy. That is their constitutional duty. That policy is not always agreeable to everyone else, and that is their misfortune.

Is the right hon. Gentleman aware that the considerable agricultural estates of the Duchy of Lancaster extend to the Oswestry division of Shropshire? Can he indicate what advice he gave as to the likely consequences for British agriculture and for the tenants of the Duchy of a minimum lending rate of 15 per cent.?

I confess that, although that subject occupied a good deal of my thoughts recently, I did not have the tenant farmers of the hon. Gentleman's constituency in mind. I shall certainly reflect upon the likely consequences to his agricultural constituents. Frankly, I would think that they would not be of very great importance to the agricultural community. [Interruption.] However, all these matters are taken into account in various aspects of the present policy. If the hon. Gentleman is seeking to make a more general point which is not specific to the Duchy tenants of Oswestry, I am bound to say that of course we regret the necessity for the rise in interest rates but that, as the Chancellor of the Exchequer has explained, it is in accordance with his need to keep a firm control on the money supply.

When my right hon. Friend visits the Duchy again, either in his ministerial capacity or as Member for the area, will he nip over to Merseyside and have a look at the position there, where we have 87,000 unemployed and 20,000 people in Liverpool alone on the housing waiting lists—40,000 if we include slum clearance? Is it not clear that to have any further cuts in public expenditure which would keep those workers on the dole and those people waiting for houses would be an absolute disgrace?

It is certainly the Government's policy intention to achieve the maximum of productive public expenditure and the maximum expansion of our economy on a sustainable basis.

Is the right hon. Gentleman aware that his answer to my supplementary question was trivial and unsatisfactory? It indicates that the Government have not even begun to have the faintest conception of the damage that will be done to the private sector, particularly agriculture, as a consequence of rates of interest which are absolutely medieval.

The hon. Gentleman again accuses me of not weighing the consequences of these rates. I was merely supposing him to be somewhat egocentric in thinking that their major importance was in relation to his constituents within the Duchy.

asked the Chancellor of the Duchy of Lancaster whether he intends to appoint further economic advisers to assist him in his rôle of advising the Government on economic policy.

No, Sir. I am happy to say that at present supply exactly matches demand.

I congratulate the right hon. Gentleman on containing public expenditure within his own office at least. May I ask him whether he associates himself with the view held by some of his colleagues that no further public expenditure cuts are required to contain excessive monetary growth? Is that the right hon. Gentleman's own judgment?

My judgment is that all the economic factors in our society should be taken into account when judging what steps are required to curb any unhealthy excess in monetary growth.

Is our economic plight due to the fact that the Government nave or have not accepted the advice of my right hon. Friend? Which is it?

My hon. Friend has to bear in mind that my work is in the nature of an adviser and not of a dictator.

When the right hon. Gentleman claims, as he did in reply to the previous supplementary question, that a minimum lending rate of 15 per cent. is necessary in order to reduce the money supply, whose responsibility is it that the money supply has risen at such a rapid rate in recent months?

At the risk of defying the political conventions of both parties, I must say that the history of the increase in our money supply cannot be looked at over a short cycle of time but has to be looked at over a longer period of time and that the responsibility conies from diverse factors. I do not doubt that there are possibly even imperfections in Government decisions sometimes which play a part in that, but there are many other factors, such as the terms of trade, commodity prices and the like, which play an important part, and they are too many to analyse in the course of a reply to a supplementary question.

Can my right hon. Friend say what discussions he has had with the International Monetary Fund about the possibility of funding sterling balances? Would he care to share with the House on some occasion, or by means of a White Paper, his views on this subject?

The handling of our negotiations with the International Monetary Fund is the responsibility of my right hon. Friend the Chancellor of the Exchequer, but at some point it might be possible to share with my hon. Friend and those others who are interested my views on this and kindred questions.

May I return to the original Question and ask the right hon. Gentleman whether, because of the shambles which Scottish Office Ministers have made of the Scottish economy, he has plans for taking on board anyone to advise him on how to improve the Scottish enonomy?

I am not sure that the hon. Gentleman would welcome it if the Duchy of Lancaster took control, in an advisory capacity, of the Scottish Office. Certainly I have no plans to do so at the present time.

Does not my right hon. Friend appreciate that he is a little too modest about his achievements, particularly at the present time? Does he recall that he was quite happy to accept the gratitude and applause at the time when the economic situation was such that the inflation rate was down, for a short period at any rate, to about 8·4 per cent.? As he has been involved in many areas of Government Departments, does he not realise that he, or at least the strategy he has propagated, particularly against import controls, has brought us to this sorry pass? He really should tell us what the Government's present strategy is so that we can be fully aware of their policy.

I had not thought of my hon. Friend the Member for Bolsover (Mr. Skinner) primarily as a source of gratitude or applause, although I am prepared to receive either his or anyone else's comments on this or any other subject. The Government have made their position with regard to import controls clear again and again. For the very best of reasons, including our direct advantage in our international trading position, the Government are firmly against general import controls.