asked the Secretary of State for Prices and Consumer Protection what estimates he has made of the cost of the additional subsidies required to maintain the Retail Price Index at its present level in the event of the devaluation of the green pound to the level of the £ sterling.

Depending on a number of complex factors, the green pound arrangements might represent a saving of as much as £1½ billion on retail prices, equivalent to about 10 per cent. on the retail food index. The Government have made it clear that there is no immediate prospect of a devaluation of the green pound.

Is the right hon. Gentleman aware that the best contribution that he and his Department can make in terms of the retail price index is to restore confidence in the £ sterling and to make it clear that there will be a reduction in public spending by reducing the amount of money spent on food subsidies rather than by receiving over £1½ million a day through monetary compensatory payments?

I have no doubt that the main obligation that have to consumers is to build an economy that is sufficiently stable and healthy to enable prices to be stabilised, and the £ sterling is part of the process. However, the hon. Member for Hertfordshire, South-West (Mr. Dodsworth) oversimplifies the problems involved. I do not think that the major problem we shall face in the next six months or year involves the question of the extent of food subsidies.

Is the right hon. Gentleman aware that the greatest contribution the Government could make to real food prices being as low as possible would be to regain for this country the right to purchase food in world markets?

No, I think the right hon. Gentleman is wrong. Within the figure that I quoted are almost £500 million worth of subsidies from the EEC. The green pound arrangement as it now is means that the EEC is subsidising the British consumer to a great extent. Were we to abandon that arrangement, the British consumer would suffer rather than benefit.

asked the Secretary of State for Prices and Consumer Protection what is the most recent year-on-year rate of inflation.

asked the Secretary of State for Prices and Consumer Protection what is the latest year-on-year rate of increase in prices.

asked the Secretary of State for Prices and Consumer Protection how much prices have increased since February 1974.

The annual increase in the retail price index was 14·7 per cent. to October 1976. The increase since February 1974 was 60·8 per cent.

Is the right hon. Gentleman aware that that reply comes unhappily from a Government who boasted that they would keep inflation down to 8·4 per cent. to gain electoral victory in October 1974, that it compares with a German inflation rate of 3·8 per cent., and that the country is appalled at a Government who inherited a 100p pound bringing about a situation in which it buys only 63p worth of clothing, food and everything else?

I wish that we had inherited a 100p pound. I wish, too, that we had inherited a number of other things that would help us in our fight against inflation. Furthermore, I wish that we had inherited a public sector borrowing requirement which had not increased at the rate it did under the Tories in past years. What we inherited was an economy that was in greater imbalance than anything that happened since the war. As a result there was a substantial increase in prices in the early part of 1974, but between August last year and the present time there has been a substantial deceleration in the inflation rate. I have no doubt at all that after a period of stability that deceleration will continue. It will continue because of the success of the social contract. The Conservatives should decide whether they want to see that success and the social contract continue.

Is the right hon. Gentleman not familiar with the letter of 18th December 1975 from the Chancellor of the Exchequer to Dr. Johannes Witteveen, in which the Chancellor said that by the end of this year the rate of increases in prices, year-on-year, would be under 10 per cent.? If the Secretary of State is familiar with that letter, will he say when the Chancellor's forecast will come about?

There is a later Question on that subject, but in order that the Opposition may limit their hooting I shall answer it now, with apologies to the hon. Member who put down the later Question. We have not proceeded as quickly along this road as we had hoped. I would not pretend anything else. There have been a number of difficulties. The depreciation of sterling is one and, more immediately, the drought has been another. The Opposition must decide whether they will support policies that will eventually result in the Government's aim being achieved or whether they regard their proper position as simply to cheer when things go wrong.

asked the Secretary of State for Prices and Consumer Protection what was the weekly amount spent on food by the pensioner in February 1974; and what it is at the present time.

According to the National Food Survey, the food expenditure per person in pensioner households averaged £3·03 per week in the first quarter of 1974 and £4·63 in the second quarter of 1976, which is the latest period for which information is available. This represents an increase in expenditure of 53 per cent., but it should be borne in mind that over this period pensions increased by 70 per cent. Pensions will rise by a further 15 per cent. today.

Is the Minister aware that, according to figures taken from the Family Expenditure Survey, the total expenditure for retired households has increased by £11·51 a week since February 1974? Is it not a terrible indictment of the Government that the rate of inflation has increased so much that is has eroded the increase in pensions since that date? Is he aware that his right hon. Friend the Secretary of State said in a speech in Gloucester on 16th October that Socialism is an expensive business? Does he not agree that it is particularly expensive for retired people and low-income families, and that it is about time we had less Socialism?

Is is unfortunate that the hon. Gentleman seeks to peddle rubbish in the House. The figures that I gave relating to expenditure on food show that the resources of pensioners, far from being eroded, have been more than maintained. [HON. MEMBERS: "Tell that to the pensioners."] Let hon. Members on the Opposition Benches tell it to the pensioners, instead of peddling the nonsense that they perpetrate here. It is clear from the National Expenditure Survey that the resources of pensioners have increased faster than the increase in the cost of living. The hon. Member for Altrincham and Sale (Mr. Montgomery) referred to expenditure on non-food items, but the figures also bear out my point in that area.

As it was part of the implied agreement in the alleged social contract that food prices would be kept to a reasonable level, and as this part of the agreement has been broken, what prospects does the hon. Gentleman see for the continuance of the social contract?

I am confident that the social contract will be maintained by the Government's pursuing the policies on which they embarked, with the full support of the working people, and by the people's understanding of what has led to price increases. We have a programme of food subsidies totalling £408 million in the current financial year, which has made a substantial contribution to restraining the level of price increases for the most sensitive items in the price index.

Will my lion. Friend confirm that on this issue, as on so many others, the Opposition are two-faced hypocrites?

Order. I have said before that arguments may be hypocritical, but that we never call anyone in this House a hypocrite.

Will my hon. Friend confirm that the Opposition, while pretending to be concerned about pensioners, are, by clamouring for the removal of food subsidies, doing, at a stroke, the worst conceivable damage to pensioners?

I regret that the Opposition never lose an opportunity of shedding crocodile tears in the House.

Is the hon. Gentleman aware that the figures quoted by my hon. Friend the Member for Altrincham and Sale (Mr. Montgomery) are an appallingly vivid illustration of the dramatic fall in the value of money under this Government? Will he confirm that the amount spent on food by the average family has increased by almost £6 a week since February 1974, and is it not clear that the Government's policy of subsidies and trying to insulate the movement of food prices from the movement of other prices has been as pointless as it has been self-defeating?

I hope it is clear to the hon. Gentleman that the Index of Retail Prices has increased by 61 per cent. since February 1974 while retirement pensions have increased by 96 per cent. during the same period.

On a point of order, Mr. Speaker. In view of the disgraceful reply that I have received, I give notice that I shall raise the matter on the Adjournment.

There is a set formula for this procedure. It begins "In view of the unsatisfactory nature of the reply".

In view of the unsatisfactory nature of the reply to my Question, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible opportunity.

asked the Secretary of State for Prices and Consumer Protection whether he will issue a more simple guide to the regulations made under the Consumer Credit Act 1974.

Section 4 of the Consumer Credit Act places on the Director General of Fair Trading the responsibility of publishing information and advice about the Act. I am therefore asking the Director General to write to the hon. Member.

Is the hon. Gentleman aware that small business men find these regulations so complex that senior civil servants have been attending courses—costing £50 each—to explain them? Will he arrange for the publication of a simple explanation of these regulations at a low cost which small business men can understand and afford to obtain?

Every time that I hear the hon. Gentleman asking a question, I feel that he underrates the intelligence of small business men. The Director General has published a series of leaflets about the Consumer Credit Act, which vary in complexity to suit a range of audiences. I am sure that he will do his best to make the Act clear and well understood to both small and large traders.

Is the hon. Gentleman aware that many small firms have had to take quite expensive legal advice to find out what the regulations mean and whether they should register under the Act? In view of the appalling burden on small firms, particularly because of the current minimum lending rate, do the Government not feel an obligation to minimise the administrative work of these firms?

There is a need to minimise the administrative work of small traders and others. I have looked at the licensing arrangements, and two forms that it was proposed that applicants should complete have now been dispensed with. I shall keep in mind the need to make these matters as clear as possible. Further regulations have to be made affecting particularly small traders doing credit transactions.

asked the Secretary of State for Prices and Consumer Protection whether he is satisfied that adequate arrangements exist for enforcing consumer protection legislation in the buffet cars of trains.

I have no evidence that existing arrangements are inadequate.

Is the hon. Gentleman aware that British Rail is attempting to serve a synthetic substitute for tea on its trains, that many local authority trading standards officers are worried about it and that some wish to ensure that it is not described as tea? How can enforcement take place when a train spends so little time in each local authority's area? Does the Minister assume that officers must get on and off trains even when they do not stop?

I am not quite sure what the hon. Gentleman imbibed in Newcastle, but I believe that the matter is being investigated. Investigations by trading standards officers take place at the points of departure and arrival, and travellers also have recourse to the Transport Users' Consultative Council.

Is the hon. Gentleman aware that the price and quality of British Rail tea is irrelevant, as most people can no longer afford to travel by rail?

I do not find that to be the case, and it is about time that the music hall jokes about British Rail came to an end.

If my hon. Friend has discussions with British Rail about the price of tea and aspects of service in buffet cars, will he draw attention to the fact that the cars are occasionally advertised as being open when they are either closed OT open only to a selected section of the community, so that not even tea can be purchased by the majority of travellers?

If there are complaints about the lack of services, I am certainly prepared to look further at the matter.

asked the Secretary of State for Prices and Consumer Protection what is the relationship between devaluation of the £ sterling and the increase in the cost of imported foodstuffs.

asked the Secretary of State for Prices and Consumer Protection what is his estimate of the increase in retail food prices since the end of February 1974 which is attributable to the decline in the external value of the £ sterling.

A fall in the value of sterling of 10 per cent. is estimated to cause an increase in the Retail Price Index of very roughly 2½ per cent. in the following year. The effect on food prices alone is complicated by the green currency arrangements, which help to shield the United Kingdom consumer from the full effects for many major foodstuffs. Assuming that the value of the green pound is not changed, the effect on food prices is less than on prices in general. It is not possible to distinguish the effects of the decline in the exchange rate from the numerous other interacting factors over a period stretching as far back as February 1974.

As from the date they came to office, the Government have achieved an effective devaluation of our currency of well over 30 per cent.—in excess of the figure even of Sir Stafford Cripps and his successor as Labour Chancellor of the Exchequer—does the Secretary of State suggest that this is the fault of the British people for never learning from their mistakes about Socialist Governments or the fault of the rest of the world for having so little confidence in Her Majesty's Government?

The fall that has occurred over the last two and a half years does not, in fact, beat the record of Sir Stafford Cripps. It just beats the record of Lord Barber—[Interruption.]—and it is deeply related to the other inheritances, as the hon. Gentleman chooses to particularise, that we acquired from Lord Barber and the Conservative Government of which he was Chancellor of the Exchequer.

Does my right hon. Friend agree that the Opposition have remarkably short memories and that the fall of the pound began once it was floated, under the previous Conservative Government? Is not one of the most serious and basic reasons the fact that since we have been in the Common Market, every year we have been faced with an increase of prices due to the tariff problem? Is it not clear that that also should be laid at the feet of the Opposition?

As my hon. Friend knows, we disagree over his second point, but on the first point I think there can be no disagreement. I remember very well the debate in this House when my right hon. Friend the Member for Birmingham, Stechford (Mr. Jenkins) referred to the creeping devaluation that happened during the previous Administration. He said that the fact that Lord Barber had been—I think I quote him exactly—a dainty devaluer did not mean that he had not been a devaluer; it had happened continually.

As he has made a misleading statement, will the Secretary of State now tell the House what was the depreciation in the external purchasing power of the pound under the last Conservative Government, and what it has been under this Government?

I have not made a misleading statement. Very much of the previous Government's policy was devoted to this end, which is why one of the hon. Lady's colleagues on the Front Bench was crying that we welcome what had happened. She seemed to be disagreeing that it happened, and her colleague is crying that we welcome it.

On a point of order, Mr. Speaker. I realise that you can hardly be held responsible for the content of ministerial replies, but the Minister has grossly misrepresented—

Order. It would not be the first time, if it were true.

asked the Secretary of State for Prices and Consumer Protection to what extent average family expenditure has increased as a result of the increase of interest rates and mortgage rates in the last six months.

Despite the increase in minimum lending rate since May, mortgage and hire purchase interest rates have held generally steady. Over the past six months, therefore, interest rates have had no significant impact on family expenditure.

I thank the Minister for that reply. I now draw his attention to the next six months and ask him if he will tell the House whether the increase of interest rates, mortgage rates and rents are part of the social contract as promised by the Labour Party in November 1970, or whether Socialist planning does not include the real world.

It is obviously too early to assess the effect on family expenditure of the recent increase in mortgage rates, but the steadying of house prices over the last two years has reduced significantly the rate of increase in net monthly payments. Conservative Members would do well to recall the comparison with the period when they were in office, between the first quarter of 1972 and the fourth quarter of 1973, when net monthly repayments more than doubled.

Will my hon. Friend accept that the greatest protection for the householder in this period has been the end of random land speculation that went on under the last Government, and that this has enabled house prices to be stabilised? Will he, nevertheless, bear in mind that, as there will be an additional burden on mortgage repayments in the coming months, we ought to look again at the question of a stabilisation fund for the mortgage companies, which we discussed in very great detail at the time of the last election?

The latter point is for my right hon. Friend the Secretary of State for the Environment. However, it is true that the latest available figures show that the deceleration in the rate of house prices, which started when the Government took office, has continued, and this is encouraging.

Looking at the other side of the mortgage coin, does the Minister agree that if investors in building societies were to receive a return on their money equivalent to the fall in the value of money, the mortgage rate to borrowers would have to be considerably higher than it is? Is any sort of consumer protection being considered for investors in building societies?

I shall consider that question very carefully.

asked the Secretary of State for Prices and Consumer Protection how many orders have been made by the Price Commission with regard to excess prices since the Price Code commenced.

asked the Secretary of State for Prices and Consumer Protection how many orders have been made by the Price Commission with regard to excess prices since the Price Code commenced.

The Commission has issued nine notices under Section 6 of the Counter-Inflation Act requiring firms to restrict prices or charges in order to conform with the Price Code. In the 12-month period up to last August the Commission also secured about 3,000 price reductions worth about £80 million, and over 1,000 price increase notifications were rejected, modified or withdrawn.

I thank the Minister for that reply. Will he and his right hon. Friend take note of the massive degree of voluntary co-operation which British industry has undergone in the application of the code? Will he note also that only nine actions were enforced, whereas about 22,000 companies are involved in the operation of the code? Will the Minister encourage his right hon. Friend the Prime Minister to pay proper and due tribute to the way in which British management is coping with this ever-increasing burden?

I believe that my right hon. Friend the Prime Minister has already done so—when he met the CBI earlier this year.

Does the Minister recall a scheme called Price Check, and will he tell us whether it has died or simply faded away?

The hon. Gentleman is a number of months out of date. It has ended.

asked the Secretary of State for Prices and Consumer Protection by how much prices have increased in the United Kingdom since February 1974; and what have been the average rates of increase in OECD countries since that date.

By August 1976, the latest month for which comparable data are available, prices had risen by 55·9 per cent. in the United Kingdom and by an average of 27·8 per cent. in OECD countries.

May I, in the most kindly supplementary question that I can put, ask the Under-Secretary of State what have been the special factors in the United Kingdom which have led to our having twice the rate of price increases of the average of all our industrial competitors? I cannot put it in a nicer way than that.

I shall endeavour to answer the question as nicely as I can, in both senses of the word. Part of the trouble stems from the wages free-for-all which took place when threshold payments awarded under stage 3 of the previous Government's pay policy were incorporated in basic rates. [Interruption.] Part of the trouble [Interruption.] The hon. Gentleman is interested in the answer, even if his colleagues below the Gangway are not. Part of the trouble arises from the need to phase out the deficits of the nationalised industries accumulated as a direct consequence of the policies of the Conservative Administration which the hon. Gentleman supported. Part has been due also to the higher food prices as a result of our transition to full EEC agricultural pricing—a policy with which his party is in full agreement.

Will the hon. Gentleman confirm that the difference between ourselves and our main competitors in relation to the annual rate of inflation has been made considerably worse by the fact that the three-monthly rate, annualised, is currently more than twice as high as it was last August? The figure now is 19 per cent. Will he ask his right hon. Friend to tell the House and the country, not just the TUC, when he and the Government will take adequate steps to stablise prices through the correct management of the economy? Is he aware that people are sick to death of the gimmicks that have come from his Department, which have cost a great deal of money and have done little or nothing to restrain prices?

I hope that it is the common purpose of both sides of the House to acknowledge the steps that have been taken towards achieving this country's necessary targets of inflation which are comparable with those of our major international competitors. The hon. Member for Gloucester (Mrs. Oppenheim) does no service to the country by misrepresenting the position, as she has done this afternoon. The latest comparable figures show that our rate of inflation, at just over 60 per cent. above the average rate in the OECD, is high, and unacceptable. But it is a distinct improvement on the position six months earlier, when our inflation rate was 135 per cent. above the OECD average. We have achieved a marked improvement. We must ensure that that trend continues.

Why do the Government, and, for that matter, the Opposition Front Bench, refuse to accept that one of the basic reasons for the increase in food costs has been our entry into the Common Market, and the common agricultural policy?

My hon. Friend may not have heard what I said on that point. I draw his attention to the value of the MCAs, which are helping to cushion this country against increases in food prices and which my right hon. Friend made clear will persist.

asked the Secretary of State for Prices and Consumer Protection if he will, in the interests of the consumer, refer to the Director General of Fair Trading practices relating to the collection and transfer of cherished number plates.

No, Sir. I am not satisfied that commercial activities in this field are likely to affect adversely the economic interests of consumers.

Does the hon. Gentleman accept any responsibility for the estimated 27,000 consumers who have been suffering disgraceful delays in the renewal of their motor licences? Has this shabby Government's vendetta against people spending their own money got to the point where they are not prepared to take any action to protect this large group of consumers?

The matters to which the hon. Gentleman refers are primarily for my right hon. Friend the Secretary of State for Transport. I understand that there has been some inconvenience to consumers as a result of action at Swansea One of the unions has now ceased industrial action and the other is expected to do so shortly.

Will the Minister seriously consider referring to the Director General of Fair Trading the answer given by the Secretary of State about devaluation? Will he invite the Secretary of State to look up the value of the pound when it was floated in 1971 and see how it rose to 2 dollars 60 cents and where it was when this Government took office, and then have the good grace to apologise to the House for suggesting that the level of devaluation under Lord Barber was higher than that achieved by Sir Stafford Cripps?

I do not think that those are the cherished numbers that are the subject of the Question.

Will the Government do something to decherish these number plates? Can we not abolish them altogether and give people other numbers instead?

I am quite foxed by my hon. Friend. However, this is not a matter primarily for me.

asked the Secretary of State for Prices and Consumer Protection when he now expects the annual rate of increase in the Retail Price Index to fall below 10 per cent.

Due to a number of factors, including the depreciation of sterling and the drought, the current level of inflation is likely to persist for the next few months. I am not prepared to forecast beyond that.

With the effects of the decline in sterling still to come through, higher mortgage rates coming up, much higher rates anticipated, higher fares and probably increased VAT, is it not clear that there is every likelihood that the rate of price increases in the next 12 months will be higher than in the past 12 months? Will the Secretary of State confirm that that will mean that we shall continue to be in a worse posiiton than nearly every other Western country, by a long way, and will he now admit that the social contract, whose policies have produced this situation, is a total failure?

No. I share the view of the Price Commission, which, in its most recent report—I am sure that I paraphrase it crudely—suggested that the level of retail prices would rise by about the same figure for some months, that it would then be reduced, and that the reduction would largely be the result of the second stage of the wages policy, which is inherent in the social contract. I have no doubt that the success that we have achieved to date and that we can anticipate is the direct result of the social contract. Those who are prepared to shout about it destroy the social contract at the country's peril, not their own.

Is the Secretary of State aware that his reluctance and that of his right hon. Friend the Chancellor to make forward forecasts is understandable in the circumstances, because they have not got one right yet? Will he tell the House, with the benefit of hindsight, what the rate of inflation would have been over the past two and a half years if the social contract had been observed for the first 18 months, if the Government had not overspent and overborrowed, and if the pound had not depreciated by 25 per cent. as a result? Will he also tell us how much of the hardship and fall in living standards which are now inevitable could have been avoided?

One of the main problems of the Labour Party losing by-elections is that Opposition Members get so excited that they never ask sensible questions—

Answer.

—but let me answer the hon. Lady. As she knows, it is impossible to hypothesise in that way. She must understand that the problems with which we had to wrestle included major items that we inherited from the previous Administration. I should like to give one example from the list offered to the House by my hon. Friend the Under-Secretary of State. One of our problems over the public sector borrowing requirement has been that the Conservative Government refused to allow publicly-owned industries to move towards a situation in which they were self-supporting, but supported them out of deficits and therefore increased the borrowing requirement. It is that sort of problem with which we have wrestled and are now overcoming.

asked the Secretary of State for Prices and Consumer Protection if he will make a statement on the recent report of the Price Commission.

I assume that the Question refers to the Price Commission's quarterly report for June-August, published on 26th October.

Is the Secretary of State aware that the relative strength of sterling this morning was attributed to the increased expectation that the Prime Minister and his right hon. Friend the Chancellor of the Exchequer were preparing to take effective action to reduce Government expenditure? In the light of his earlier replies explaining the effect that the fall in the value of sterling would have on the consumer, does he agree that he and his colleagues would best help the consumer if they helped the Chancellor of the Exchequer to get on with those long-delayed public expenditure cuts?

I have no doubt that a major obligation on me and my Department, in terms of protecting the consumer, is to stabilise sterling. On the last occasion on which I answered Questions, I said five times—I have said it once already today, so I shall repeat it, in order that the hon. Gentleman's prepared supplementary question is properly answered—that there is nothing more important for the consumer than preventing further depreciation in sterling, which affects prices more than anything else. But I say to the hon. Gentleman, as I said to one of his hon. Friends, that to assume that it is automatically achieved by public expenditure cuts is a severe over-simplification of the problem.

The right hon. Gentleman will be aware that he was elected on a manifesto that talked about subsidising basic foods, namely, bread, flour, butter, cheese, milk and tea. Will he tell the House where, in that same document, mention was made that those subsidies would be phased out within a year?

We made it clear from the beginning that the object of the subsidies was to cushion the least well off against the difficulties that they would have to face in 1974 and 1975. The hon. Gentleman will recall, from an answer given by my hon. Friend the Under-Secretary of State, that we have made substantial improvements in the standards of living of the least well off, the unemployed and the pensioners. Indeed, I understand that some of the hon. Gentleman's hon. Friends who complained bitterly about that at the weekend managed to achieve some notoriety on the front page of the Daily Express by saying that the increases were too great. As we have managed to improve the general purchasing power of the unemployed, the sick and the elderly, food subsidies do not have the importance that they had early in 1974.

May I ask a sensible question on the subject of food prices? I hope that the Minister will be able to answer it. If the parity of the green pound is brought up when the transitional period is over, does he agree that the Common Market will have been responsible for a fairly substantial rise in food prices, including the 20 per cent. which is about to go on to imported lamb at the end of this year? What will the Government do to compensate the poorer sections of the community? The better off can manage the increase, although they do not like it, but it is the poorer sections that suffer most from the Common Market. What will the right hon. Gentleman do about this?

If I may say so, that was a sensible question, but one that includes a hypothesis which I regard as highly unlikely. The common agricultural policy, about which the hon. Gentleman rightly complains, contains a number of artificial elements which I regard as wholly disadvantageous to the consumer—the consumer in the United Kingdom and in the eight other EEC countries. The idea that we might allow the revaluation of the green pound before some other CAP adjustments are made which compensate the consumer is, to put it at its lowest, highly unlikely. Therefore, I do not believe that the hypothesis at the beginning of the hon. Gentleman's question will apply.

asked the Secretary of State for Prices and Consumer Protection whether he is satisfied with the Price Code in its present form.

I am satisfied that the Price Code should remain in force until my present powers expire next July.

Will the Secretary of State confirm that the recent relaxation of the Price Code was intended to allow some £1,000 million of additional profits in industry? Will he estimate by how much this has been reduced as a result of the increase in national insurance charges which distributors have to pay and which they are not allowed to recoup?

The hon. Gentleman is wrong to say that recoupment—if that is the right word—is not applicable to distributors. There is some argument about the powers which make it possible for distributors to act in that way. My right hon. Friend the Chancellor of the Exchequer has been explicit about that, and what he has said must apply.

Has the relaxation of the Price Code led to more investment, which was the argument used at the time? If it has not, what do the Government intend to do about it?

It is impossible precisely to relate the relaxation of the Price Code to individual investment decisions. However, I have no doubt that, in our attempt—which must be extended—to encourage the proper climate for investment, the relaxation of the Price Code has played a substantial part. If my hon. Friend looks at the surveys by the Department of Industry and the CBI, he will see that investment prospects for next year are considerably improved, and I hope and believe that the changes in the Price Code have made a contribution to that.

asked the Secretary of State for Prices and Consumer Protection if he will refer all increases in Government fees in future to the Price Commission, irrespective of whether or not the increase is consistent with the general rules on Government fees and charges.

Many Government fees and charges are subject to statutory consultation procedures and to parliamentary scrutiny, and it is not appropriate for them to be considered also by the Price Commission since they are set at a level to do no more than cover costs.

Is the Minister aware, however, that in, for example, the recent firearms fees orders the costs have escalated dreadfully? No private sector firm would be allowed to get away with that without its being looked into. Why does not the Minister get the Price Commission to investigate the fat bureaucrats who are living on shooters' and other firearms use fees being paid under those orders?

I do not accept the premise in that question. As the hon. Gentleman pointed out in a debate in Standing Committee, if the fees had not been increased there would simply have been a consequential increase in public expenditure.

How does the Minister apply this principle to the Pay Code, when many employers would like to give their workpeople at least the minimum necessary to keep up their standard of living but the code does not allow them to give it? Why should the Government be allowed to make these charges to take care of inflation when no one else is allowed to do this?

The bases upon which fees are charged has been published to the House in an answer given to my hon. Friend the Member for Warley, East (Mr. Faulds) on 5th April 1976. The basis of charging is analogous to the Price Code.

On a point of order, Mr. Speaker. In view of the thoroughly unsatisfactory nature of that reply, I beg to give notice that I shall seek the earliest possible opportunity of raising the matter on the Adjournment.

asked the Secretary of State for Prices and Consumer Protection whether he will make a further statement on the television rentals report of the Price Commission.

I have nothing to add to the answer which my right hon. Friend gave to my hon. Friend the Member for Chorley (Mr. Rodgers) on 15th October.

Will the Minister recognise that that is a disappointing reply? Will he take this opportunity to point out that the rental companies are only being socially responsible in maintaining a profitable enterprise which ensures employment, and that by any yardstick a 19.4 per cent. return on capital employed is not excessive when the minimum lending rate is at 15 per cent.?

I am grateful to those companies which have agreed to hold their prices until the end of the current phase of prices policy. From the hon. Gentleman's supplementary question, I am not clear whether he would be in favour of prices being frozen across the board.

Does the Minister think that it is reasonable to expect companies to make a lower return on investment than the rate of inflation currently being experienced?

The companies themselves have responded reasonably to a reasonable report.

Answer.

On a point of order, Mr. Speaker. In view of the very unsatisfactory nature of that reply, I beg to give notice that I shall seek the earliest possible opportunity of raising the matter on the Adjournment.

asked the Secretary of State for Prices and Consumer Protection how much food prices have increased since February 1974.

The food index has risen by 67·8 per cent. between 19th February 1974 and 12th October 1976.

Does the Secretary of State agree that lower-income families have been hit much worse proportionately by this increase than those who are better off? Would it not, therefore, be a better use of the public funds that are available if blanket food subsidies were removed and if part of the funds were directed more selectively to those in real need?

I take the hon. Gentleman's point about the particular difficulties experienced by lower-income families. During the period in which food subsidies are to be run out—as the Chancellor of the Exchequer announced on 22nd July—I shall do my best to concentrate what remains on the foods which are particularly high in the budgets of lower-income families and to reduce it for the foods which are bought, in larger quantities, by families higher up the income scale.

Does my right hon. Friend think that the additional import taxes and levies imposed on all the main foodstuffs as part of the common agricultural policy since 1972 have had the effect of raising or lowering food prices here?

I have no doubt whatsoever that, taken overall, the advantage that we now get from green pound arrangements means that we are now in benefit. [HON. MEMBERS: "Oh".] The problem to which my right hon. Friend refers is one that puts us at a disadvantage. However, as I have said to him on many previous occasions when answering from the Dispatch Box, he must look at the thing as a whole. On the whole, it is to our benefit to be in the Community and to enjoy the Community's food price regimes.

asked the Secretary of State for Prices and Consumer Protection on what criteria he refers profit margins to the Price Commission.

References to the Price Commission are usually made in response to public concern about prices or when traders have complained that margins are inadequate. But most references have been concerned with matters wider than profit margins.

On the question of profit margins, does the right hon. Gentleman take into account the margins of profit in areas of activity comparable with that where a reference is sought? Does he take into account the possible effect on employment, or is it simply a question of some sort of presumed protection to the consumer by reducing prices?

No. The things that are taken into account—in the terms in which the hon. Gentleman asked his question—are taken into account not by me but by the Price Commission, and they are taken into account according to the provisions of the Price Code, which the House debated and agreed without amendment about seven weeks ago. I take the hon. Gentleman's point that there are some problems associated with a Price Code the reference dates of which are historic and a code which is in many ways likely to stratify existing patterns of profit and economic performance. That is why, when I look to the future prices policy, I should like to find a rather more flexible policy than that which we have at present.

Will my right hon. Friend refer to the Price Commission the retail margins made by multiple footwear retailers?

In all these matters one must reconcile the problems associated with margins and prices with the necessity to preserve confidence in industry and, therefore, to preserve investment and employment. I have looked at the question to which my hon. Friend refers, and I do not believe that a good case could be made at present for making the reference which he suggests.

Is the right hon. Gentleman aware that many foreign companies, particularly American ones, are being deterred from investing in Britain, or investing further in this country, by the existence of profit and dividend control? Is he further aware that if he were to relax those controls the investment to which I have referred would raise the value of the pound and help the consumer far more than he will be helped by any of the measures about which the right hon. Gentleman has been talking?

No, Sir, I am not aware of that, nor do I believe is anyone who examines the Price Code. Anyone who examines it objectively will agree that the Price Code is inhibiting investment and profit in only a marginal number of cases. In others, it is the level of activity within the economy that determines how companies operate and what they invest. The hon. Gentleman's question implies a situation which no sensible commentator would suggest exists.

asked the Secretary of State for Prices and Consumer Protection when he expects to bring forward proposals for a new Price Code to operate after July 1977.

I am at present considering the form that prices policy might take in the longer term. The possibilities are not confined to the introduction of a new Price Code. I intend to discuss future policy fully with interested parties before taking any final decisions.

I am grateful for that reply. Will the right hon. Gentleman bear in mind the crucial need for trade and industry to plan ahead, and afford them ample time before a new Price Code comes upon them?

I understand that very well. I believe that they need stability and certainty, and I shall provide as much of that as I can during the discussions that I hope will open quite soon. I take the point.

I have two quick questions to put to the right hon. Gentleman. First, in relation to the existing code, will he confirm that people are entitled to pass on the cost of the national insurance contribution? There is some doubt about that. Secondly, with regard to the negotiations on a subsequent code, will the right hon. Gentleman bear in mind the CBI document "The Road to Recovery" and take note that it estimates that the average profit margin is no higher than 3 per cent. in industry as a whole? Does the right hon. Gentleman regard an adequate profit margin as the bastion of any new pricing policy?

The answer to the hon. Gentleman's first question is clear. It was made clear by my right hon. Friend the Chancellor of the Exchequer, namely, that that must be allowable under the Price Code. There is no question about that.

asked the Secretary of State for Prices and Consumer Protection what steps he is taking to keep down the price of consumer goods.

Within the severe constraints imposed by the public sector borrowing requirement, the need to safeguard jobs and to promote investment and the pressure of increasing import costs, consumer prices are being contained when that is possible. The Price Commission saved consumers £138 million as a result of modifications, rejections and withdrawals of proposed price increases during the period 1st June to 31st August 1976.

On the question of the price of food, may I refer to the answer that the Minister gave to my previous supplementary question and confirm that what he really means is that there will be no change in Government policy towards the green pound until there has been a substantial change in the CAP?

From long experience, I normally prefer to give my answers in my words rather than the hon. Gentleman's. However, by and large his description of our policy is right. Clearly, from the United Kingdom consumer's point of view there are benefits to be gained from the green pound remaining at its present level. We could not possibly contemplate a change in that unless other aspects of the CAP were changed in such a way that equal benefits flowed to the British consumer.

If it is possible for the right hon. Gentleman to estimate to within £1 million of the £138 million that has been saved by the Price Commission, is it equally possible for him to tell us what the cost of the Government has been on consumer prices overall during the past two and a half years?

I do not believe that the hon. Gentleman regards that as a serious question. He has made his point, but the important point is made not by him or by me but by the Price Commission. If the hon. Gentleman looks at its reports and adds up the amounts of saving, he will discover that the existence of the Commission, and the application of its policies, has saved the British consumer a great amount of money over the past two and a half years.