HC Deb 23 July 1970 vol 804 cc768-72
Mrs. Castle

(by Private Notice) asked the Secretary of State for Employment and Productivity whether he will now make the Statement on the future of the National Board for Prices and Incomes which he promised he would make before the recess.

The Secretary of State for Employment and Productivity (Mr. Robert Carr)

The future of the Board is being reviewed in the context of a wider examination covering the work of the Monopolies Commission and other relevant bodies. In the meantime the Board has been asked to continue its work on the references which have already been made to it. We do not propose to retain the existing detailed "early warning" system for pay and price increases. It is, however, important that the Government should keep themselves informed about prospective movements in the price of major products and about important pay settlements and we shall be discussing with industry what voluntary arrangements should be made for this purpose. The Government do not intend to make use of the powers, which expire at the end of this year, to impose a three-month standstill on pay and price increases pending inquiry by the National Board for Prices and Incomes.

Mrs. Castle

Is the right hon. Gentleman aware that his statement means that at last we have extracted from him the admission that he intends to abolish the National Board for Prices and Incomes as a piece of personal and political vindictiveness? Is he also aware that the rest of the statement is just a smokescreen for the fact that the public will no longer have a watchdog over unjustified price increases, that big business has won for itself a free hand to increase prices—which it was promised during the election campaign? How on earth does he hope to get on this basis the voluntary co-operation over pay settlements to which he referred?

Mr. Carr

I suspect that the public have got a little tired of Ministers and organisations watching their prices going up as fast as they were going up under the last Administration, far faster than they went up under a different system of government before. We believe that where there is competition that is the most effective means of safeguarding the consumer, and the less it is interfered with the better. Where competition is lacking we shall certainly need machinery to make it effective and, where it cannot be made effective, to safeguard the consumer. That is what the review is about.

Mr. Harold Wilson

When the right hon. Gentleman, following his leader, refers to the virtues of competition, is he referring to oil companies as competitive or monopolistic?

Mr. Carr

What I would have been interested in, what I am sure the House would have been interested in, was to have known in practice what the right hon. Gentleman thought about that for six years.

Mr. Hugh Jenkins

Answer the question.

Mr. Carr

We believe, let me repeat, that where there is competition it should be left free play, and that is the best safeguard for the consumer. Where there is lack of competition, or a suspected lack of competition, there should be adequate machinery to inquiry into it and to make the competition effective, and if it cannot be made effective, to safeguard the consumer. That is what the machinery will be which we will in due course set up.

Mr. Harold Wilson

The right hon. Gentleman did not answer the question about oil. Oil prices have gone up and, if I may declare an interest, tobacco prices as well. Will the right hon. Gentleman now answer the question. Does he think these companies are characterised by monopoly or by competition? Does he not recognise that, whatever the philosophical answer that he has been trying to stammer out, we would have had the National Board for Prices and Incomes to see whether the price increases were necessary?

Mr. Carr

And a great deal of good that would have done! We would have had three months delay, no action at the end of it and prices would still have gone on rising faster than they have done since the last Labour Government 20 years ago.

Mr. Fletcher-Cooke

I warmly welcome the demise of the National Board for Prices and Incomes, but will my right hon. Friend give us an indication of his plans to strengthen the Monopolies Commission, particularly its full-time membership?

Mr. Carr

My right hon. and learned Friend puts his finger on one of the most important points of our review. We made clear before the election, and we repeat now, that there is need to have more effective machinery to make a competition policy more effective and, where competition cannot be made effective, to safeguard the consumer. These are exactly the sort of matters that are under review. The previous Government took many months to come forward with their cock-eyed idea for the Commission on Industry and Manpower. We need a little more than four weeks to produce something better.

Mr. Peart

How does the Minister equate his declaration for a competition system with the intention of the Conservative Administration to bring in a levy system which will increase the price of food and end competitiveness?

Mr. Carr

I do not speak about agriculture. I seem to remember that some 20 years ago the Labour Opposition of those days, in a rather similar situation, were talking about what would happen to the price of food when the then Conservative Government abolished food subsidies. What we proved then and shall prove again is that a market economy with the minimum interference where competition is effective leads to lower prices over the whole range of the scale than is achieved by meddling interference by the Government. The record of the 13 years of Conservative Government and the five and a half years of Labour Government proves our contention to be true.

Mr. Sheldon

Will the right hon. Gentleman deal with the industrial situation today? What does he intend to do about those monopolies which he cannot break up and which are abusing their market power?

Mr. Carr

As I said in my statement, we need effective machinery for dealing with these problems. We have made it clear that we feel the present Monopolies Commission as it stands is not adequate. It is obvious to the whole British public that the N.B.P.I. had no measurable effect. In our view and in the view of most of those best qualified to judge, the previous Government's proposal for a C.I.M. was also not the right answer.

Mr. Atkinson

In view of the Government's intention to refer the increased postal charges to a Users' Council and in view of the statement the right hon. Gentleman has just made, are the Government now saying that it is their intention on all matters of public interest to set up Users' Councils to which price increases in the public sector will be referred?

Mr. Carr

I thought that Users' Councils were established, for example, by the last Government when they set up the present Post Office institution. As for referring the proposed increased postal charges to the N.B.P.I., if right hon. and hon. Gentlemen opposite think it needs to be done, why was it not done in May before the printing of the stamps began?

Mr. Buchan

Is the right hon. Gentleman aware that his right hon. Friend the Minister of Agriculture, Fisheries and Food only three years ago was arguing that the nation had been mollycoddled for too long by enjoying cheap food and that the time had come for higher food prices? He was arguing that dearer food would result from competition. What is the Government's policy?

Mr. Carr

Is the hon. Gentleman trying to tell the House and the British public that we have had decreasing food prices for the last few years?

Mr. Mikardo

The right hon. Gentleman proposes one policy where there is effective competition and a different policy where there is not. Is he sure that he can always distinguish between the two conditions? If so, will he tell us whether in the last week there has or has not been effective competition in the wholesale fruit, vegetable and meat markets?

Mr. Carr

When there is a restriction of supply, for whatever reason, of course competition cannot operate properly, and that is the situation in the area to which the hon. Gentleman has referred. Where there is doubt, and there often is doubt, about whether competition does or does not exist in normal circumstances, the Government need an effective body to whom to refer such questions.