HC Deb 13 May 1968 vol 764 cc846-7
22. Mr. Barnes

asked the Secretary of State for Employment and Productivity if she will make a statement on the present trend of retail prices in relation to the objectives set out in paragraph 23 of Command Paper No. 3590.

Mrs. Castle

The retail price index rose by 1.8 per cent. between devaluation and March, 1968. This suggests that traders generally are heeding the Government's call to them to limit price increases to unavoidable increases in costs, but we are keeping the general movement of retail prices under close review.

Mr. Barnes

Is the Minister aware that many people who believe in the need for prices and incomes policy are most encouraged by the emphasis which she is placing on retail prices, which is what concern the consumer, and will she give an assurance that she will continue to apply this distinction between justified and unjustified increases as vigorously as possible?

Mrs. Castle

Yes, Sir. I can indeed give my hon. Friend that assurance. He will have had even more recent evidence of our determination to keep an eye on the level of retail prices by the decision to refer retail margins in the paint industry to the Board.

Mr. Higgins

If the demand for a domestic product has gone up because devaluation has raised the price of an imported substitute, would this justify a price increase?

Mrs. Castle

I am not sure that I grasp the full meaning of the hon. Gentleman's question, but if he is trying to suggest that because imported products have increased in price, an equivalent domestic product can be increased in price as well, I would entirely repudiate that, and that is one of the matters we are watching.

Mr. Ridsdale

Does not the right hon. Lady think that the Government would have much greater control over prices if they were not so extravagant in their spending, which has gone up by over £5,000 million in the last five years?

Mrs. Castle

I do not accept that for a moment. This expenditure is an integral part of our whole relations with an attitude towards incomes policy because the importance of the social wage, particularly to the lower paid, is very great indeed.

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