HC Deb 19 June 1956 vol 554 cc1226-7
29. Mr. R. Bell

asked the Minister of Housing and Local Government whether he will send a circular to local authorities advising them against making contracts containing escalator clauses; and what negotiations he has had upon this subject with local authority associations or builders' organisations.

Mr. Sandys

My right hon. Friend, the Minister of Works is inviting tenders for contracts on a fixed-price basis. In the light of the results, I shall decide what advice to give to local authorities on this subject.

Mr. Bell

Will my right hon. Friend bear in mind the part which the contracts with escalator clauses play in stimulating and perpetuating inflation, and will he do his best to get this post-war development abolished as soon as possible?

Mr. Sandys

There is no need to convince me of the advantage of fixed prices for contracts. The trouble is that, with fixed-price contracts, under present conditions, the fixed price tends to include an unduly high element to cover the possibility of rising costs. That is, of course, one of the evils of inflation.