HC Deb 11 May 1967 vol 746 cc1674-6
10. Mr. Marquand

asked the First Secretary of State and Secretary of State for Economic Affairs whether he will publish a White Paper explaining the assumptions on which his prices policy is based and the aims it is designed to achieve.

Mr. Frederick Lee

The aims of the policy for prices are to improve the competitive position of the economy, to restrain increases in prices and to encourage necessary investment. These aims have been endorsed by the Confederation of British Industry and the Trades Union Congress. We have set out in the White Paper—Cmnd. 3235—the criteria which are to govern prices behaviour, including price reductions, during the twelve months after 30th June, 1967.

Mr. Marquand

But is my right hon. Friend aware that the White Paper is rather vague in what it says about prices? With reference to one of his earlier answers, could not my right hon. Friend look at the much more effective form of price control they have in France, and particularly at the way in which the French are trying to use price control as a way of stimulating productivity; and see whether we can apply something of that type here, particularly in view of our decision to apply to enter the Common Market?

Mr. Lee

My hon. Friend has mentioned prices in France. I hope that we shall be a little more successful in that respect than the French seem to me to have been during my visits to France in the last few years. There have been 974 proposals for price increases. Of these, 137 have been rejected or withdrawn, 614 have been accepted—in a number of cases, after modification—and 223 are still under consideration. Although we are not creating the kind of detailed analysis that my hon. Friend mentions exists in France, we are doing everything possible to ensure that where prices increase they increase only against the criteria of the White Paper.

Mr. Higgins

Is the Chancellor of the Duchy of Lancaster aware that British Rail is under the impression that a price increase may be justified when the demand for advertising space has gone up? Does he not think that to be a good principle and would he not extend it to the private sector?

Mr. Lee

I would not say that the private sector has done so badly itself on the criteria.

Mr. Tinn

Whatever doubts may be expressed about the accuracy of the prices index, does not my right hon. Friend agree that no one seems to mind quoting it when it suits him?

Mr. Lee

There are many millions of workers whose increases are based on the retail index, and have been for many years—including the period when the right hon. Member for Enfield, West (Mr. Iain Macleod) was Minister of Labour— and I do not think that any of them would care to say now that they were deprived of increases to which they were entitled.

Mr. Stratton Mills

If the Prices and Incomes Board and the right hon. Gentleman's Department have to examine what is a reasonable profit, would they consider laying down some guide lines so that the appropriate return on capital as a fair investment can be seen for a wide variety of industries?

Mr. Lee

I have answered this question before. I am sure that the hon. Gentleman would agree that one cannot lay down specific terms unless one looks at such things as the risk involved, the capital necessary, and that kind of thing, differentiating between different industries.