HC Deb 24 April 1958 vol 586 cc1137-9
12. Mrs. Mann

asked the President of the Board of Trade what steps he will take to ensure that reductions in price of commodities due to Purchase Tax exemption will not be offset at a later date by retail price increases over the same commodities.

Sir D. Eccles

Purchase Tax is only one element in prices. I cannot ensure that reductions in tax will be exactly reflected in the price, but I hope that generally this will be the case. Competition is a powerful agent to this end.

Mrs. Mann

Does not the President realise, in this year of our Lord 1958, that there is no competition in fixed prices and monopolies? Is he aware that the stability of the £ is essential for our British economy? Is he further aware that the goods which were reduced in price by the electricity boards were immediately increased in price the following morning by the manufacturers? I have evidence that the prices of woollen goods, photographic materials, ladies' hats and cosmetics have been increased. Will the right hon. Gentleman put a stop to this?

Sir D. Eccles

I am afraid that I cannot accept the hon. Lady's contention that there is no competition. According to my information, very many price reductions have been made. If she will bring me particular examples that she has in mind, I will certainly examine them.

Mrs. Mann

Will the Minister come shopping with me?

17. Mr. G. Thomas

asked the President of the Board of Trade whether he will introduce legislation to ensure that Purchase Tax reliefs are not retained by the wholesalers but passed on to the consuming public.

Sir D. Eccles

No, Sir.

Mr. Thomas

Is the right hon. Gentleman aware that he is dealing with a remarkable crowd of people and that one large manufacturing firm dealing in vacuum cleaners first sent out to the trade to say it was transferring the relief on to the manufacturing costs and it was only after publicity that the firm changed its mind? Is the Minister aware that this is being done in other fields?

Sir D. Eccles

My information is that manufacturers of vacuum cleaners have reduced their prices.

Mr. Thomas

Not at first.

Sir D. Eccles

The hon. Gentleman is asking a question which is not on the Order Paper.

18. Mrs. Slater

asked the President of the Board of Trade if he is aware that the prices of certain shampoos, hair creams, etc., have not been reduced to the consumer to comply with the reduction in Purchase Tax; and if he will take steps to ensure that appropriate reductions are made in future.

Sir D. Eccles

This is a highly competitive industry and, where tax reductions have been made, I would expect prices to come down when shopkeepers have sold their tax-paid stocks, if not before. I understand that the rate of Purchase Tax on shampoos is unchanged.

Mrs. Slater

Is the right hon. Gentleman aware that on 16th April one large group manufacturing these commodities sent out a circular to chemists saying that it was enclosing reduced prices. What, in fact, it had done was not to give the consumer the benefit of the reduction in Purchase Tax but to increase the cost price to make up for it. Is not this a betrayal of the purpose of the Budget, which was to reduce costs?

Sir D. Eccles

I am not sure to which group the hon. Lady refers, but if it is the one I have in mind, the latest information is that it has reduced prices. Perhaps the hon. Lady would give me her information.