HC Deb 19 October 1939 vol 352 cc1109-27

Order for Second Reading read.

5.49 p.m.

The President of the Board of Trade (Mr. Oliver Stanley)

I beg to move, "That the Bill be now read a Second time."

Hon. Members will agree that the subject-matter of this Bill concerns one of the most important as well as one of the most difficult problems with which we shall have to deal in the economic field, and most hon. Members will realise, I am sure, that in seeking a solution of this problem we have to walk very delicately between the almost equally great dangers which lie on each side of our path. One danger, with which the Bill is designed to deal, is, of course, very obvious, and it is that of profiteering, or making excessive and unreasonable profits out of the exigencies of the war. This word "profiteering" has for over 20 years now passed into our vocabulary with an unpleasant connotation. I need not remind hon. Members that another definition of the term is the epithet "racket"; I will go no further than my right hon. Friend the Home Secretary, and say that it verges upon the unseemly.

Apart from the natural antipathy which all of us have to the idea that certain individuals at a time of great stress, when most of us are looking at a prospect of loss and hardship should actually be making fortunes out of our necessities, it is clear that profiteering itself has an economic effect. All of us, on whatever side we sit in this House, are concerned and must remain concerned during the whole period of the war, with the problem of what I think the hon. Member for Seaham (Mr. Shinwell) called the vicious spiral, increases of prices followed by increases of wages, followed by increases of prices, followed by further increases of wages, and so on, the process taking us faster and faster towards a catastrophic result. It must be the concern of all of us during the war period to prevent that spiral occurring. It is difficult enough when all we have to deal with are the necessary increases in price which the varying circumstances of war force upon us, but if, in addition to that, we have to deal with increases which are quite unnecessary, and which are not due to any unavoidable economic or political effects but entirely to the greed of individuals, that problem is made even more grievous.

Besides the economic effects, there is, in the existence of profiteering, a really grave social danger which may be out of all proportion to the extent of the profiteering or to the actual damage it may be doing. I think that the people of this country realise that the war that we are fighting cannot be fought without hardship to all classes of the community and that they are ready to accept hardship if they feel it is necessary in the national interest and to the successful prosecution of the war. That is very different from accepting hardship when the only reason of it is to line the pockets of some individual. I cannot agree with the junior Member for Oxford University (Sir A. Salter), who gave the impression in his speech yesterday that he thought profiteering could well be left to be dealt with by taxation and that the fact that the profits were afterwards taken by the Chancellor of the Exchequer was—

Sir Arthur Salter

With great respect to the right hon. Gentleman I would interrupt him to point out that I did not say that. I said that loss of production was more serious than an occasional excessive profit because in large measure one could recover excessive profits by taxation, whereas loss of production would be irrecoverable. The context does not imply what the right hon. Gentleman is now recounting. I certainly said nothing to imply that I think excessive profits are anything but an evil.

Mr. Stanley

I was not suggesting that for a moment, but I think my hon. Friend will agree, if he looks at the OFFICIAL REPORT, that it is fair to say that he put the point that profiteering could be dealt with by the recovery of the excess profit. That may be true from the purely economic point of view, but it does not meet the social grievance. I do not think that the personal grievance of a man who had been asked to pay excessive prices for an article would be removed if you told him: "That will be all right, because the Chancellor of the Exchequer will in turn get it out of the man who got it out of you." It is essential to treat this matter in a rather different way.

For that reason, it is essential that any Bill that is produced should be effective in checking profiteering, but there is another danger which is not quite as obvious perhaps to the general public, although it is clearly obvious to all who have thought on the subject. It was brought out very forcibly in the speech last night by the hon. Member for Oxford University, and it is the danger that, in attempting to stop excessive profits— which all of us want to do—we may stop reasonable profit or all profits, or we may create a loss. The inevitable result, as the hon. Member pointed out, would be a loss of production and an effect upon the consumer just as bad as the profiteering which you had set out to prevent. It is clear that when we set out to keep down prices we have to keep down unreasonable and unnecessary increases but it is impossible to divorce prices from cost. If we set out to keep down, or by mistake in our legislation we kept down prices while costs of production were rising, we should create a gap between prices and costs, and inevitably that would have a restrictive effect upon production. It is therefore essential that the Bill should be effective not only in stopping profiteering, but should be sufficiently flexible to allow for reasonable and justifiable increases in price during the currency of the emergency.

I would like to say a word upon the extent of this problem as it has shown itself during the past few weeks. Hon. Members will recollect that complaints of profiteering began very soon after the outbreak of the war. In the first instance, complaints that came to my notice were concerned mainly with small purchases of particular goods urgently required for war purposes, things like sandbags, black-out materials and torches; but the complaints about that kind of commodity soon began to spread, and to cover articles of a much wider range and greater importance in the ordinary life of the community. My hon. Friends and I made statements in this House encouraging hon. Members to bring to our notice any complaints that they received and we promised that we would investigate those complaints as far as we could.

Up till now I think we have received something like 1,000 complaints, sent in from one source or another, and have attempted to investigate the causes of the increases of price about which the complaints had been made. It is only fair to say that as a result of that investigation we found only a minority—indeed, only a small minority—where no explanation whatever has been given and where there has been no attempt to justify the increases of price because of increases in costs; and where, therefore, it is justifiable to assume that there has been flagrant and undefended profiteering. In the large majority of cases, the increases of price have been consequent on increases in cost. There have been many cases, and I will refer to them later, where, although some increase of price might have been justified, the level of increase which was demanded was wholly unjustifiable, upon the figures supplied.

I think it is necessary that the general public should realise that in present circumstances it is perfectly possible to have an increase of price without any element of profiteering at all. There have been daring the past few weeks a number of factors which, in reference to certain commodities, make a rise in price inevitable quite apart from any question of profit. The fall in the sterling exchange, the increase in freight rates due to war conditions and to delays of shipping, delays and hold-up in external transport, the cost of A.R.P. services falling upon particular productive industries, war risks insurance—all these items are increases in costs which justify in many cases increases in prices without it being possible to level any charge of profiteering against the trader. In many cases which we have investigated it is only fair to say that the increased price charge has been related fairly and strictly to increases in the costs incurred.

There have, of course, been a number of articles where the prices have been much too big to be justified by the cost factors. That has been particularly the case with regard to war risks insurance. In many cases I think it has been due to a genuine misunderstanding. A number of people did not in the first place realise the implications, and charged the full 6 per cent. without realising the effect of the rate of turnover. There are other cases where quite clearly, even if that had not been fully understood, the price charged could never have been justified. In other cases I think the increase has been due not so much to a desire to profiteer as to a panicky feeling of uncertainty as to the future and a distrust of the course of prices in coming months, and an attempt, perhaps, to over-insure the future course of trade.

With regard to those complaints, I have had every co-operation from the main associations concerned. They have done their best to discourage their members from increasing prices unduly. I have also had discussions with associations representing various industries as to the course of prices in those industries. There has, I am glad to say, been a considerable result from these discussions and from the publicity which has been given to the subject in the Press. On the subject of war risks insurance, as a result of communications which I have addressed to various associations and firms, there have been a number of instances where an addition made to the price to meet this particular cost has been reduced by the people who have been complained about. There is reason to believe that that increase which we saw a few weeks ago has been steadied and it is now becoming more moderate; but, even if that is so, it would be no justification for complacency, and it would certainly be no justification for abandoning measures such as are contemplated in this Bill. This movement was largely checked by the publicity which was given to it in the House and in the Press and, above all, I think, by the announcement, which obviously met with the approval of the whole House, that measures of this kind were going to be taken to deal with abuses in the future. I think that had the effect both of strengthening the majority of traders and manufacturers who do not wish to profiteer in this way, but who are put in a most unfair position by competitors who are adopting these measures. At the same time it had the effect of frightening the minority who were prepared to take whatever advantage existing circumstances gave them. It is essential that those salutary effects which have so far been achieved should not be relaxed and that we should proceed with this Bill and pass it into law and set up a machinery which I believe will be competent to deal with offences of this kind in the future.

It has not been easy to frame the Measure. We have, of course, a precedent, in dealing with profiteering, in the Bill introduced in 1918, but anyone who either remembers the terms of the Bill or recalls the history of its administration will not accept that as a very useful or valuable precedent. The terms of the Bill were almost studiously vague, with the result that it was largely ineffective in checking profiteering, but it was very often able to cause extreme irritation, hardship, and sometimes injustice, to traders who were perfectly innocent. I felt that, if we were to have a Measure which was to be any good at all, it was necessary to find some new method which would be more definite and which could, therefore, be capable of more accurate interpretation. During the drafting of the Measure I had the advantage of a great deal of consultation both with representatives of the various political parties, with associations representing traders and manufacturers and with representatives of the Co-operative movement and the Trades Union Congress. Of course the responsibility for the Bill is entirely that of the Government. The consultation that these people willingly had with me in no way commits either individuals or associations to support of the Bill, but I should like to express my thanks for the very helpful criticism and some very instructive suggestions which I received as the result of those consultations.

The Bill is based on the principle of dealing, as opposed to the Act of 1918, with prices and not with profits. Whereas the Bill of 1918 dealt with what was left rather vaguely as a reasonable profit, this Bill deals with the price structure of the article concerned. There are three necessary factors to be determined. There is first of all the basic price, there is then the permitted increase, and the sum of those two gives you the permitted price, and the offence created by the Bill is the offence of selling above this permitted price. Clause 3 shows how the basic price is arrived at. The date chosen is 1st August, and the basic price will be the price at which similar goods sold in the course of that particular business on 1st August. The reason for the choice of that date is that the first really big factor affecting prices is this emergency, the fall of the £,took place on 23rd August, and it is convenient to take the 1st of the month because very often changes in price come into operation then.

That is the broad principle of the basic price. It is necessary, however, to make certain exceptions. If hon. Members will look at the Clause they will see that provisions are made for cases where either the particular business did not exist on the 1st August of this year, or the business did not sell these particular goods; and in another Clause they will find provision made for a new form of goods which is to be put on the market. They will also see in Clause 3 that power is given to the Board of Trade to vary the date of 1st August in certain circumstances, first of all if there are exceptional circumstances connected with that industry or commodity on the 1st August that year. There may have been something which made the price of that commodity on that particular day excessively high or excessively low as compared with the general run of prices during the preceding months.

Miss Wilkinson

Does that mean that if you have a well-established business selling a certain line of goods, and a man opens a shop next door and sells the same line of goods, he can sell them at any price he likes?

Mr. Stanley

I do not think that the hon. Lady has read the provisions to which I am referring. That is the point with which I was dealing. You will see in Sub-section (3) of the Clause that there is provision to deal with a business which was not in existence on 1st August and could not come under the general rule of the 1st August being the date for the basic price.

Mr. John Morgan

Suppose an established business took on a new line?

Mr. Stanley

I was explaining that these Sub-sections dealt with new businesses and also old businesses. To anticipate another question, I also said that there is a further provision in the Bill which deals with a commodity which is not in existence at the moment—a new type of commodity which may be produced afterwards. I was dealing with the various conditions under which a different date could be fixed. The first was due to exceptional circumstances and the second was due to lapse of time. At the moment, the 1st August is fairly recent and it will be comparatively easy to fix what the price of a certain commodity was at that date, but as the war goes on the 1st August, 1939, becomes further away, and the difficulty of proof becomes increasingly greater; and it may well be necessary to introduce a new method by which a price can be fixed. There is it also the question of seasonal prices; the price in August may have no relation to the price in December or January.

Having obtained the basic price, the next factor is the permitted increase.

Mr. MacLaren

Before the right hon. Gentleman continues—

Mr. Stanley

I think it would be better if I continued and hon. Members can put any points they wish afterwards.

Mr. MacLaren

I would like to know what happens in the event of overhead charges increasing. Is there any provision for such an eventuality?

Mr. Stanley

It was for that reason that I suggested it would be convenient if I finished my speech and then hon. Members could fill up the gaps which I have left and raise matters which I have left unexplained. The Clause to which I am referring, Clause 4, deals with the permitted increase and covers the point to which the hon. Member has drawn my attention. The permitted increase which is described in Clause 4 is an amount not exceeding such increase as is reasonably justified in view of certain matters which are specified in the First Schedule. If hon. Members will turn to the First Schedule, they will see set out various factors which are to be taken into account in justifying this increase in price, and they will see that one of the factors is "the changes in the total volume of the business over which the overhead expenses thereof fall to be spread." Other matters are the cost of raw materials, cost of premises and plant, insurance premiums, wages and salaries, transport charges, and so on. The Board of Trade has power to add to these if the necessity should arise.

Having arrived at the permitted increase, the addition of the basic price and the permitted increase equals the permitted price at which the article may be sold. The goods to which this machinery is to apply are to be stated in Orders made from time to time by the Board of Trade. In general, they will cover articles of necessity for general consumption. Where there is already price control of an article, this machinery is clearly unnecessary because the offence will be to sell above the maximum price fixed by the Government. Similarly, I think the extension of this sort of machinery to luxury goods is largely unnecessary because there the consumer has the remedy in his own hands. If they are luxury goods which can be done without and the consumer suspects profiteering he has the obvious remedy of not buying them.

Clause 5 gives to the Board of Trade powers under certain conditions to specify the basic prices, the permitted increase or the permitted price. This Clause is designed entirely as a protection for the traders. It does not create an offence but it creates a defence. It enables a trader to go to the Board of Trade and under the conditions of this Clause to have these three things specified. That does not mean that the mere fact that he sells, say, above the permitted price which has been specified, in itself creates an offence. He will still be able to put up the normal defence which is open to him under this Bill, but it does mean that if he sells at that price or below it, it creates for him a complete defence and no prosecution can lie against a trader who sells in accordance with the provisions specified under the Clause.

During the consultations which I had with the various organisations, there was a considerable difference of opinion as to the value of this Clause. It was very much welcomed by some organisations and was pronounced unworkable by others; and it was clear that the difference of opinion as to this Clause and the protection it gave depended largely upon the class of goods in which the particular people were interested. The wholesalers who were producing large ranges of simple commodities thought it a valuable protection, but the retailer dealing with innumerable small quantities of varied goods thought it unworkable and impracticable. In order to meet those points of view I have made this Clause optional. It can be brought into effect only on the application of a body of traders and the Board of Trade can act on it only if they think it expedient and practicable. The decision has to be taken after consultation with the central committee to which I shall refer later, and provisions are made for appeal by dissatisfied parties so that the provider or the buyer of the goods can appeal to a referee.

Mr. Riley

May representations be made by associations only, or may individual traders make them?

Mr. Stanley

It would obviously be impracticable to specify a price for any single trader in any part of the country, but any body representing traders may make an application. As regards penalties, in the case of a third offence, it would be possible, with the leave of the Attorney-General, to apply to the court for an order which would prevent the offender from carrying on business any longer, or such an application may be made by the Attorney-General himself.

I want to say a word about machinery. The machinery will consist of various local committees and a central committee. Their functions and their composition will be extremely important, because, although the ultimate responsibility must remain with the Board of Trade, I hope to put as much of the administration of the Act into their hands as possible. That will, I think, allow of a flexibility and knowledge of local conditions which it would be impossible to secure with a rigidly central administration. The central committee will be small. I hope to appoint people of expert knowledge, who will not represent the various interests, but will be able to look on the problems from different points of view. Their function will be to advise the Board of Trade on the exercise of powers in regard to such matters as articles to be included and basic prices of such articles. An important part of their duty will be to obtain uniformity among the local committees on questions of principle. In dealing with local committees they will have this sanction, that it is only by the decision of the central committee that prosecutions can proceed.

With regard to the local committees, I intend them to be larger than the central committee, and representative, as far as possible, of both producers and consumers. At any rate in the first instance, the areas which I select to be covered by these local committees will be the same as the Home Security regional areas. If we should find ultimately that those areas were too large to be convenient, we should then have a nucleus which we could split up into smaller areas. The duties of these committees will be to receive and investigate complaints, and, if they are dissatisfied with the response of the trader concerned, either to make the necessary adjustments or to recommend prosecutions. All of us must hope that it will be possible to remedy abuses, to correct excessive profit-making, more by methods of this kind than by a flood of prosecutions.

The rest of the Bill deals with certain different collateral aspects. In Clause 10 we attempt to deal with a problem which has been brought to my notice on several occasions—the case where a shopkeeper does not necessarily charge an excessive price for a commodity, but says that he will not sell that commodity unless the customer buys something else that he does not desire to buy. Sub-section (1) deals with that. In Sub-section (2) we lay it down that where a customer buys a parcel of goods one of which is regulated under this Act he must be given on demand a statement in the general price as to the price of the regulated article. Clause II deals with another matter which has been brought to my notice, though not on so large a scale. I have had information about traders withdrawing from circulation large stocks of commodities, not with a view to regulating the proper distribution of those stocks between their customers, but obviously as a mere speculation, in the belief that in the future the prices of those commodities will be going up and they will be able to sell them later at a greater profit. In this Clause I have attempted to deal with that, and at the same time to preserve for the trader the right to carry on the perfectly proper practice, which all of us I think recommend, where there is a shortage of stock to deal with it by rationing the amount available among their various customers equally. The other Clauses are normal Clauses for a Bill of this kind, and I do not think I need draw special attention to them. I hope I have not been too long, but I am afraid I have not been too clear.

Miss Wilkinson

; Hear, hear.

Mr. Stanley

But that may be due to the fact that some hon. Members, for most of the time, have been occupied in talking to other hon. Members.

Miss Wilkinson

I can only say to the right hon. Gentleman that hon. Members who are unable to obtain enlightenment from him have had to seek it from other hon. Members.

Mr. Stanley

As long as the hon. Lady is enlightened, none of us will complain about the source from which she seeks her enlightenment.

This is a pretty complicated Measure, and I have tried to be as brief as possible. I do not underestimate the difficulties. It is easy enough to make a Bill of this character, but whether it works or not depends on the administration. The success of the administration depends on the character of the persons who are appointed to the central committee and the local committees, and the initiative that they show. I intend, instead of massing a large staff at the Board of Trade to deal with these matters, to make the committees as strong and representative as I can. I hope that I shall, before issuing invitations, be able to have consultations with representatives of the kind of people I want to get. I hope that, when it comes to issuing the invitations, the individuals who receive them will Tealise what a very important work this may be, and that they will be prepared to give their best service to a scheme which is absolutely essential. and which, I think, can, with their co-operation, be made successful.

6.29 p.m.

Mr. A. V. Alexander

The President of the Board of Trade has, I think, in spite of a little by-play, made a reasonable explanation of the Bill. It is interesting to some of us on this side to notice that now we have got to a national crisis of this kind, Members representing the National Government find it necessary to consider the tendency of those engaged in capitalist industry to charge undue prices whenever they get the chance. It was for that reason that the Labour Government, both in 1930 and 1931, endeavoured to get permanent legislation upon the Statute Book to deal with such questions, and which the hon. Member for Finsbury (Mr. Woods) endeavoured to get through this House within the last 12 months on a number of occasions. It is true that there is always very great public interest in the question of prices, although I ought to add, in view of the terms of the explanation of this Bill by the President of the Board of Trade, that there is also very great public interest in the question of profits. In the course of the last war it became necessary, in order to allay public opinion, and especially working-class opinion, to set up a very large and constantly sitting consumers' organisation under the aegis of the State. I was interested, on going back over some of my records on this matter, to find that on the 16th July, 1919, six or seven months after the war, Mr. McCurdy, who was then in charge of the Food Committee of the Board of Trade, addressed the Consumers' Council on the operation of trusts, and he opened with these words: I think that the people of this country are infinitely more interested just now in the cost of living than in the peace terms, and a great many people would be willing to let off the Kaiser if they could hang the profiteer. That was the view then of the Minister in charge of the Ministry of Food, and we at least find at all stages a tremendous interest, as expressed especially by the housewives, in this question of both prices and profits. In so far as this Bill seeks to deal with those who infringe the price of goods when regulated by the Board of Trade on the recommendation of the price regulation committee, I do not think that in the structure of the Bill there is very much about which we can complain, although it is most important to observe that the last sentence or two of the President of the Board of Trade will in fact govern the effect of the Bill. If the Bill is simply put upon the Statute Book as a kind of moral deterrent and is not worked and administered effectively, then it will be of no use whatever, and if it is left to people who have neither the capacity nor the experience in ferreting out the real facts about the increase of prices the Bill will not be effective. Therefore the first thing that the Opposition would say to the Government is that, if already on the experience of seven or eight weeks the President of the Board of Trade has found it necessary to introduce this Bill, especially seeing the colour and interest they have so often represented before, it is essential that the Government should themselves take the responsibility for seeing that the Act works and not leave it to sporadic efforts in local districts. They must see that this Central Control Committee works, and that in every local area where a committee is set up there are people competent to advise it, and especially there should be a competent chairman in every instance.

I am glad to learn that the President of the Board of Trade has in mind the need for representative labour and consumers' interests upon these committees, and I hope that he will take steps to have proper consultation with labour, trade union and consumers' organisations in order to ensure that these interests are represented. I could quote a number of instances of profiteering in the last five or six weeks, but I do not wish to delay the House on matters of that kind. I should like to come to what I think is much more important, and which it is not at all clear yet that the Government have in mind. Quite apart from dealing with the small trading breaches of price regulation which they lay down, have the Government any real plans for avoiding the larger mass profits of an undue character which are likely to arise in war-time, apart from holding inquiries by this committee. That is what I would like to know. Looking back upon the experience of the Great War, while there were, as has been the case in the last few weeks, a large number of instances of petty profiteers making here and there profits which they ought not to make, the real experience of organised labour and of organised consumers in the country was that the great fortunes about which the President of the Board of Trade spoke at the opening of his speech were made by the large interests and not by the small traders. As I hear somebody say sotto voce" Cooperative Society," I always have to remind the House that when I speak of large interests the Co-operative Society does not make a profit; it returns it to the consumer. It is very essential that we should remind hon. Members of that fact.

I hope that the President of the Board of Trade will consider that from the point of view of the record which exists. I would ask him to get a little book published by a very Left Wing organisation called "The Labour Research Department."[Interruption.]The President of the Board of Trade asks whether he would have to pay for it? I do not see why he should not; it costs 3d. [HON. MEMBERS: "Profiteering."] That was the actual basic price charged when it was published in 1931. Perhaps I may just give one or two of the things I have in mind. You only need to take some of the profits issued by incorporated companies and combines in the immediate post-war period in order to obtain some understanding of what profits can be made in a large mass concern. The spinners' organisation in 1919 made a 100 per cent. bonus issue, and the great margarine firm of Van den Bergh issued a bonus in 1920 of 300 per cent.

Mr. MacLaren

Hear, hear.

Mr. Alexander

I am not quite sure whether that was a cheer of approval or whether it was in the other direction. The great wheat and milling concern of Messrs. Rank of 1919 made a bonus share issue of 175 per cent. I could go on quoting. I have a whole lot of them here. I ask the President of the Board of Trade to obtain this document. I should like to have it back again as it is part of my treasured records. It is therefore important, in dealing with prices and goods, to know what the policy of the Government is in relation to the general economy of the country and how they are going to deal with control. I feel confident that I shall carry not merely the Members of my party, but the majority of the House with me when I say that it is very much better in a time of emergency like this to have your policy and your regulations in order to prevent both undue prices and undue profit. I am not at all persuaded yet by the production of this Bill that the Government have really made up their minds to deal with the question from that point of view. Let us take first of all the question of finance. If their financial policy is wrong, if it is not having regard to due economy in the issue of national credit during the war, then it will have a cumulative and spiral effect right through industry and prices, and through prices to wages. Take, for example, the question of margins of profit. The President of the Board of Trade is going to enter into an inquiry of a kind of price regulation, commodity by commodity. If you have margins fixed by the Government beforehand which are not right, then they will have their effect upon every part of the life of the community, industrial, commercial and social, which will afterwards affect the spiral to which the right hon. Gentleman referred in his speech. So far as I have been concerned with negotiations with Government Departments I am not persuaded that the Government are fully seized of that position.

I do not want to traverse the ground that was covered yesterday in the presentation of the general case for economic co-ordination, but when we come to deal with a Bill affecting prices and the economic life of the nation generally in time of war it is important to know what the Government have in mind. So far we have very few commodities, outside food commodities, which the Government have dealt with by control to prevent undue rise in prices. In so far as the Government have commenced in regard to food commodities, up to this moment, I feel like saying that we are not impressed. I referred a few weeks ago to the position in regard to the requisitioning of butter, which was so bad for the trade, but provided a gross profit of 27s. a cwt. for the Government while the traders had to ration their supplies to their customers without a scheme of rationing being in operation.

If we look at one or two other commodities the same thing is operating. Take dried fruit. There we have the same experience. When we pass from food commodities to some of the other articles, what is the Government's policy going to be? Take the question of clothing. What is to be the regulated price of clothing? As I understand the situation at the moment, the position is that there is control of raw wool. On that they will probably arrange through Government action to take the whole supply of this or that country's clip of wool, but what about the control of price at every other stage in the process? What is clear at the present time is that we have control of raw wool but no control at all of the very important price stages in the subsequent use of that important article.

This argument can be applied to a large number of other commodities which I have in mind, but I do not wish to take up the time of the House in indicating them. It is important to put this question. According to Clause 1, it will be unlawful for any person to sell any price-regulated goods at a price which exceeds the permitted price. What goods are to be regulated? We have not had the slightest indication of the goods the right hon. Gentleman has in mind. He says it is not desirable to regulate luxuries. Very often there is difference of opinion as to what may be luxury articles or luxury goods. There may well be difference of opinion as to whether you should control all the stages of production by price, as well as the actual control of the primary commodity. We ought to have far more guidance from the right hon. Gentleman on that particular point than we have received in his speech to-day.

With regard to the Government's general policy, I am sure that many of my older hon. Friends on these benches will remember the case with which we had to deal again and again as Labour Members during the Great War, and that was the difficulty of getting wages to overtake prices. Finally, there was the great fight, led by Bob Smillie, on behalf of the Miners' Federation, in regard to bread prices. Ultimately, the only way in which the position could be met was by the prevention of a rise in price of bread by an actual subsidy of the commodity to the consumer. Therefore, when we are talking about the price of goods, and especially consumers' goods, I would ask whether the Government have considered the general question as to whether it is more economical in some circumstances of national emergency, at a certain point, to use en masse Government credit in order to prevent a rise in prices, rather than allow them to go to the free play of what competition exists and then to have the continuous chasing of wages and prices, one after the other. In the long run, avoiding that cumulative effect, it would prove to be economical in regard to certain commodities to use en masse Government credit to subsidise the article, instead of having this vicious circle developing. I should like to know from the Government whether that question has received any consideration.

Another point to be guarded against in regard to the Bill is the question of the make-up of the prices to be considered by the Regulation Committee. I suppose that in every case the Orders to be issued by the President of the Board of Trade will indicate maximum prices. Am I right in that view? So far, all the price Orders issued by the Minister of Food specify maximum prices. If the Board of Trade are not quite clear about the matter, we ought to know.

Mr. Stanley

We are quite clear.

Mr. Alexander

I will give way to the right hon. Gentleman.

Mr. Stanley

The Order will specify permitted prices. I explained that under Clause 5 prices can be specified where application is made by a body of traders.

Mr. Alexander

In nearly every case except in regard to a few commodities where there may be intensive competition, the maximum price becomes the minimum price. That is a point on which some indication ought to be given. It ought to be dealt with in the instructions to the committees which have to take that matter into consideration.

I understand that in a few minutes the House will be asked to hear a statement from the Prime Minister, and I shall, therefore, cut out a good deal of what I might have said on other matters. I desire to consult the convenience of the House, so that the Prime Minister can come right in and make his statement as soon as I sit down. I am not yet satisfied that there is sufficient co-ordination between the Board of Trade, the Minister of Food and the Minister of Agriculture upon this problem of prices. I have not yet seen the full details of the statement by the Minister of Agriculture to-day, but it looks as if home food production is largely to be stimulated by what I would call a price inducement policy. We really ought to have a considered and coordinated effort among all the Government Departments to prevent prices rising, rather than have to work a very great administrative machine for penalising those who break through.