HC Deb 18 January 1968 vol 756 cc1937-9
18. Mr. Barnes

asked the Secretary of State for Economic Affairs what steps he is taking to ensure that price increases imposed at wholesale and retail levels conform to the Government's prices and incomes policy.

The Secretary of State for Economic Affairs (Mr. Peter Shore)

Full use will be made of the provision for reference to the National Board for Prices and Incomes for investigation and, where necessary, of the reserve powers of the Prices and Incomes Acts, 1966 and 1967. As my hon. Friend will be aware, my right hon. Friend the Minister of Agriculture, Fisheries and Food has special arrangements for keeping a close watch on the prices of a wide range of important foodstuffs.

Mr. Barnes

Can my right hon. Friend say how soon the Report of the National Board for Prices and Incomes on Distributors' Margins will be available? Does he not agree that unless quick action is taken the prices and incomes policy may be breached irreparably and that the only alternative will be higher taxation.

Mr. Shore

The Report referred to by my hon. Friend is a very important and wide-ranging one covering distributive margins on price-recommended manufactured goods. We have asked the Board to look at these margins in the light of devaluation increasing costs, and we hope to get from it a Report within the next eight to ten weeks.

Mr. Higgins

Does the Minister want to see price increases take place entirely due to devaluation?

Mr. Shore

We are prepared to accept that price increases, which are legitimately due to the rise of import costs, should take place. We are concerned not to let through other prices which cannot be justified either because of devaluation and import costs or other criteria which are currently in force.

Mr. Crawshaw

Does my right hon. Friend realise that the only foundation for a prices and incomes policy is that it must be seen to be fair and that hon. Members on this side of the House are not prepared to keep down wages unless prices are kept down? We would like to hear something more than that things are under review and reference to boards. We would like a little more positive action and legislation, if necessary.

Mr. Shore

I certainly accept that prices and incomes have to work together, but one must be realistic about the fact that devaluation has brought a new element into the situation concerning prices. I am certainly prepared to use the power that I have wherever I think that abuses, in the form of price increases, are taking place.

25. Mr. William Hamilton

asked the Secretary of State for Economic Affairs what new plans he intends to initiate with a view to curbing unwarranted price increases.

Mr. Shore

The early warning system has been reviewed. When we have had all the necessary consultations with industry I shall announce how the early warning arrangements have been strengthened.

Mr. Hamilton

Will my right hon. Friend consider setting up a separate board for price increases, as opposed to incomes? Will he further consider emulating the exercise now being done by the Observer newspaper, namely, getting a group of commodities and comparing the prices of these on a regional basis month by month, and publishing the result in the OFFICIAL REPORT or in some other way?

Mr. Shore

I shall consider both my hon. Friend's suggestions. I am very much attracted to the second one, and we are giving a great deal of thought to the development of machinery along the lines that he has indicated. As for his first suggestion, I do not think that it would be sensible to separate prices and incomes. There is such a close relationship between the two that they are best kept together.

Mr. Bruce-Gardyne

Would not the right hon. Gentleman agree that, rather than set up another separate board for this purpose, this would provide a bit of innocent amusement for the Winter Emergency Committee?

Mr. Shore

I am not sure what the hon. Gentleman is suggesting, but I sense that he thinks we should scrap the Prices and Incomes Board.

Mr. Bruce-Gardyne


Mr. Shore

In that case, any suggestions from the hon. Gentleman on what should be done about prices and incomes can be ignored.

Mr. Molloy

Will my right hon. Friend bear in mind that, while there are these appeals to back Britain, and for working people to hold back wage demands, there is a great deal to be said for patriotism in the matter of prices? Will he take the necessary action to see that this is enforced?

Mr. Shore

I think that a form of patriotism today is undoubtedly exercised in the restraint on prices. As my hon. Friend will have noted, as I have been glad to note, partly in response to this back Britain campaign, which my right hon. Friend the Prime Minister has warmly welcomed, there have been a number of announced price reductions or stabilisation programmes by a number of important firms.

Captain W. Elliot

If prices do not go up, or if money is not taken away from consumers, how can consumption be cut?

Mr. Shore

I have already explained, in reply to a previous Question, that there will be rises in prices which we must accept, arising out of devaluation. This is part of the inevitable consequence of devaluation, and this must be made clear, but we must be equally clear that rises in prices due to this and other legitimate causes are not to be confused with any general movement to exploit a situation in which prices are rising.