§ 11. Mr. Bruce-Gardyneasked the Secretary of State for Trade and Industry what estimate he has made of the percentage increase in wage costs in the hairdressing industry resulting from the implementation of the wage council award on 1st January 1973; and to what extent he has authorised hairdressers to recover these additions to costs during the period of the standstill.
§ Sir G. HoweThe percentage increase, if any, will vary from employer to employer, according to the proportion of staff previously paid less than the new minimum rates and their grades. Employers unable to absorb in full increased wage costs directly resulting from this have been permitted to raise their prices so as to recoup not more than 50 per cent. of them from 1st February 1973.
§ Mr. Bruce-GardyneI am grateful to my right hon. and learned Friend for that reply. However, can he lift the corner of the veil which hides the deliberations of his Department when deciding in any given case what is the appropriate proportion of unavoidable cost increases which may be passed on? Why is 50 per cent. right for hairdressers and 70 per cent., for instance, right for people who face unavoidable increases in the cost of raw materials? Lastly, what is the court of appeal?
§ Sir G. HoweThe appropriate factor depends upon the circumstances in each case. In relation to certain raw materials costs, which have risen very substantially and which form a high proportion of the total cost of the product, the figures of the kind my hon. Friend mentioned have been permitted. For hairdressing, the figure was decided upon in the light of the very substantial proportion that wages represent in hairdressing costs and the low profitability of many of the firms in this service trade, which has a very large number of operators in it.
Mr. R. C. MitchellIs the right hon. and learned Gentleman aware that when selective employment tax was introduced 965 all hairdressers substantially increased their prices? What evidence has he that when SET was halved last year there was an equivalent reduction in prices?
§ Sir G. HoweThe evidence of the many individual cases, together with the general submissions considered by my Department and by myself personally, which showed very clearly the facts underlying the circumstances of this trade.
§ Mr. Bruce-GardyneWhat about the court of appeal?
§ Sir G. HoweI take my hon. Friend's point. Many of the decisions are taken in the light of guidelines laid down by myself, but in particular cases representations are made to me personally.