HC Deb 06 July 1971 vol 820 cc1118-9
21. Mr. Golding

asked the Chancellor of the Exchequer what reductions in the cost of living are estimated to follow the reduction of selective employment tax for garages.

Mr. Maurice Macmillan

It is not possible to make a quantitative estimate of the effect the cut in S.E.T. paid by garages will have on the cost of living.

Mr. Golding

Is the hon. Gentleman aware that surveys carried out by newspapers of all political complexions show that there will be no significant reductions in prices and charges following the reduction in S.E.T.? Will the Chief Secretary look at prices and charges following this reduction, because he will find that neither competition nor the cut in S.E.T. has led to the reduction in prices or charges at a stroke?

Mr. Macmillan

The effect on garage costs is a cut of about £20 million a year as an element of cost which was imposed by the previous Administration. I have a large list of stores and other organisations which have effected price decreases, and I have no doubt that the reduction in S.E.T. will enable garages, among other organisations, to hold down their prices.

Mr. Barnett

Some people can tell the Chief Secretary what to do with his list. Is he aware that a little earlier he told us that the full effect of the S.E.T. cut has not yet been felt? As he presumably has made an estimate of what the full effect will be, can he say what is his estimate and when it will be felt?

Mr. Macmillan

The hon. Gentleman may not be interested in prices coming down but we are. I merely suggested that since the halving of S.E.T. took place yesterday it was not reasonable to expect the full effects to be shown today.

Mr. Geoffrey Finsberg

Is my hon. Friend aware that some manufacturers are apparently putting pressure on retailers not to reduce their prices? Is my hon. Friend aware that I have a telegram from a constituent who says that retailers are not being allowed to pass on this benefit unless they put their prices up to the manufacturer's retail price? [HON. MEMBERS: "Oh!"] If I can produce evidence, will my hon. Friend promise that some action will be taken?

Mr. Macmillan

My hon. Friend seems to be describing a position which is illegal, following the Measure abolishing resale price maintenance piloted through the House by my right hon. Friend the Prime Minister. I would be grateful if he would inform me of the position so that appropriate action can be taken.