HC Deb 04 May 1965 vol 711 cc1113-6

The following Question stood upon the Order Paper:

76. Mr. ENGLISH

To ask the First Secretary of State and Secretary of State for Economic Affairs what cases he proposes to refer to the National Board for Prices and Incomes.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown)

With permission I will now answer Question No. 76.

The Government have decided to refer three price cases, those of standard bread and of the flour used in its manufacture; of soap and detergents; and the rates for road haulage as recommended to its members by the Road Haulage Association.

These are all cases of special significance for the cost of living or for industrial costs and give rise to special concern.

The price of the standard loaf was again increased last November following a series of increases as a result of which the price has gone up very substantially since the beginning of 1960.

The prices of many soaps and detergents have increased substantially over the past year.

In the case of road haulage rates, there have been three increases recommended in nine months. The Minister of Transport has asked the Road Haulage Association to postpone the effective date of its latest recommendation by a period not exceeding four weeks to give the Board time to make its Report.

Representatives of the industries and trades concerned have been told of the Government's intention, and I am confident that they will co-operate to the best of their ability in the Board's inquiries.

Mr. English

Will my right hon. Friend impress on the Board the necessity for a fairly speedy answer to the matters referred to it?

Mr. Brown

I do not think that there is any doubt about that. The hope is that the Board will be able to let us have answers within six weeks or two months.

Mr. Grimond

Is it not contended by the Road Haulage Association that part of the increase in its prices is due to Government action? If this Is true, will the Government appear and give evidence in the matter when it is examined?

Mr. Brown

I am very clear that increases in prices are being passed on by a number of people without it being plain whether the increased charges reflect the reasons which are given. One of the reasons for having this inquiry is to see how much justification there is for the increases.

Mr. George Jeger

Is my right hon. Friend aware that we welcome this attack on increased prices? Does the reference of these particular increased prices to the Board mean that they are regarded by him, prima facie, as unjustified?

Mr. Brown

No. It would be quite wrong to think that. We have picked these cases for the reasons which I have given. They constitute cases which are of special concern, special interest and special significance either to the cost of living or because of their effect on other costs generally. It does not mean that we have decided in advance that they are wrong. We think that it is important in the interests of traders, manufacturers and consumers that these cases should now be examined.

Sir Harmar Nicholls

The right hon. Gentleman used the term "we have decided". What machinery has he within his Department for deciding which cases will be put to the Board for investigation?

Mr. Brown

The Government have decided. The Government decide.

Mr. Delargy

Further to the statement made by the Leader of the Liberal Party about the Road Haulage Association, is my right hon. Friend aware that of the three recent increases imposed by the Association even the Association itself has said that only one of them was due to Government action?

Mr. Brown

As we have referred the matter to the Board, I think that it would be much better if we let the Board examine it in an independent and impartial way, uninfluenced by feelings from outside.

Mr. Ridsdale

Could the right hon. Gentleman say why some of the recent wage increases in publicly-controlled industries have not been sent to the Board, particularly those in the Post Office?

Mr. Brown

I have always made it clear that in my view the right place to try to begin to break the inflationary spiral is at the point of prices. Wage increases which have been part of the element in increased costs certainly become available for investigation. I am considering other cases. If I think it proper, I will recommend to my colleagues that a reference should be made in these cases, too.

Mr. Maxwell

If the Board should find that any of these three industries have unfairly passed on increases in prices to the public would my right hon. Friend say how he intends that they should be forced to rescind these increases or not pass them on?

Mr. Brown

Shall we at least wait and see whether that is the point we have reached?

Mr. Stratton Mills

To create the right climate for this kind of inquiry, would it not have been better, at the same time, to have referred some price increases in the public sector back to this Board?

Will the right hon. Gentleman deal with the point made by my hon. Friend the Member for Harwich (Mr. Ridsdale), about the one-third increase in the Post Office letter post charges? Is he aware that on the most recent accounts published for the year ending 31st March, 1964, it was shown that that section was making a profit of £8 million?

Mr. Brown

On the latter point, as the hon. Gentleman well knows, if Ministers in the previous Government had not hidden the situation we should not have been confronted with this situation. If they had taken a rather more balanced view of the matter, they might have been able to succeed better.

I have now forgotten the other question which the hon. Gentleman asked me.

Mr. Stratton Mills

I ask the right hon. Gentleman whether it would not have been better to create the right climate by referring some of the price increases in the public sector.

Mr. Brown

The answer is "No". On judgment, I decided not. If private enterprise had to go through the hoops which public enterprise has to do, there might not have been the same need for this machinery. We are now requiring private enterprise to tell us the kind of things that public enterprise is already asked to tell us.

Several Hon. Members rose—

Mr. Speaker

Order. This may be debated one day, but it will have to be when there is a Question before the House.

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