§ 14. Mr. Sydney Chapmanasked the Secretary of State for Trade and Industry how many complaints have been made to the Special Prices Unit in his Department since 6th November 1972; how many of these complaints were substantiated; and what subsequent action has been taken and with what results.
§ Sir G. HoweThe Department has received about 6,800 complaints. Half of these did not relate to the standstill. The other half have been or are being investigated. In about 2,300 cases where investigation is complete the complaint was not substantiated. In 250 cases prices were found to be above the level permitted by the standstill and in all these cases the firms concerned have reduced their prices.
§ Mr. ChapmanAs it is imperative to have the co-operation of the public in trying to minimise inflationary tendencies, does not my right hon. and learned Friend agree that it ought to be a statutory requirement that when value added tax is introduced and purchase tax and selective employment tax are abolished, any increase or decrease in the cost of goods or services should be indicated and the goods should be marked with the price so that the public may know the exact extent and scope of the new tax?
§ Sir. G. HoweThe suggestions made by my hon. Friend are amongst those borne in mind by my right hon. Friend the Chancellor of the Exchequer in putting forward the proposals to cover phase 20 2, during which value added tax will come into effect. My right hon. Friend will be making further announcements about the position in due course.
§ Mr. Alan WilliamsIs the right hon. and learned Gentleman aware that as a result of the follow-up action by television in a report at the weekend that women's clothing manufacturers were considering introducing VAT in the middle of the freeze and raising retailers' profit margins by 10 per cent., at a meeting this morning some of the manufacturers have backed down and agreed to reduce their prices by 3½ per cent.? Can the right hon. and learned Gentleman say what action his indolent and apathetic Special Prices Unit intends to undertake to ensure that manufacturers follow this morning's example so that women who have paid illegally high prices as a result of the premature decision of the manufacturers receive a refund of the illegal surcharge? Does not this show the absurdity of the Government's decision to convert 1½ million to 2½ million firms to value added tax in the middle of a prices and incomes squeeze?
§ Sir G. HoweIt does not demonstrate anything of the kind. I repudiate the suggestion that the Special Prices Unit can be described in the way the hon. Gentleman suggests. The fact that, in cases where prices are found to be above the level permitted, they have all been reduced by the firms concerned demonstrates the contrary. It is the effect of publicity in the context of a voluntary policy being overwhelmingly supported that is enabling us to achieve these results. As I have announced, special arrangements are to be made to ensure effective scrutiny in relation to the changeover to value added tax to ensure that the concurrent abolition of purchase tax and selective employment tax is also carried through to the advantage of the consumer wherever that should happen.
§ Mr. RostIs my right hon. and learned Friend aware that some retailers are deliberately deceiving the public already by placing in newspapers and in their shops advertisements saying "Buy now to beat VAT" on goods which will be reduced in price by the introduction of the tax? What does he intend to do about that?
§ Sir G. HoweThat is one of the matters at which we are also looking. However, my hon. Friend ought to take account of the fact that, when we change over and abolish SET and purchase tax and replace them by VAT, some prices will be reduced alongside others which will be increased. It is important that accurate information about both changes is made available to the public at that time.
§ Mr. DuffyIs the right hon. and learned Gentleman aware that after the standstill his right hon. Friend the Prime Minister laid great stress on what he called the sanction of public opinion? Will he say why he will not allow the Special Prices Unit to reveal the names of the products and companies involved? Otherwise how can he convince the public and get their co-operation?
§ Sir G. HoweCertain changes and certain reductions are being made public. The hon. Gentleman will see them from time to time in the Press. I cannot undertake to publish the name of every company because different factors have to be taken into account in different cases
§ Mr. BennIs it not a fact that when ones conies to the incomes side trade unions are named, their claims are debated and their leaders are interrogated on television, whereas when prices rise the Government extend over the company or shop concerned the protective cloak of secrecy? Is not this one of the basic injustices in the way in which these matters are dealt with? Will the right hon. and learned Gentleman look again at the point made by my hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) that in cases of breakages on the prices side publicity should be used to discipline the offenders?
§ Sir G. HoweI am prepared to look at the point again. But the general provisions which are being made relate to the prices of commodities marketed by a large number of firms, and when a decision is announced it is made effective by reference to those commodities just as decisions about wage increases are made by reference to the industries concerned.
§ 25. Mr. Goodhartasked the Secretary of State for Trade and Industry what plans he has for improving the monitoring of price increases.
§ Sir G. HoweThe Counter-Inflation Bill provides for the establishment of a Price Commission to monitor and regulate prices immediately after the standstill.
§ Mr. GoodhartAs the monitoring of prices is to continue on a long-term basis, is it not plain that this is a job for professionals at local level as well as at the centre? Does not this mean that the weights and measures inspectorate must be used? Will my right hon. Friend consider making funds available so that the size of that inspectorate can be expanded to take on this important task?
§ Sir G. HoweBecause of the importance of the point made by my hon. Friend, the Counter-Inflation Bill contains provisions to enable weights and measures inspectors to monitor retail prices locally and to investigate complaints. They will operate under the direction of Ministers, and discussions with local authority associations will be held to work out detailed arrangements.
§ Mr. Alan WilliamsDoes not the Minister realise that the weights and measures inspectorate is already overstretched in carrying out consumer protection work? How many extra staff will be needed effectively to vet the changeover by 1,500,000 firms when many millions of products have their prices changed?
§ Sir G. HoweThe hon. Gentleman was asking us a short time ago to take steps to see that the changeover to VAT will be properly supervised, and I must tell him that our efforts are directed precisely to that end. Weights and measures inspectors will be monitoring prices and will be looking into complaints during the transitional period. In addition they will be helped by the introduction by the Government of a list of typical items to give guidance on price changes upwards or downwards which the housewife can expect to find. Large retailers will be asked for undertakings that their price changes will be in conformity with the tax changes; and the Prices Commission will have power to obtain reports about what is happening.
§ Mr. MartenWill my right hon. and learned Friend give an assurance that he will keep a close eye on this matter and 23 will watch to see that monitoring does not develop into snooping?
§ Sir G. HoweI take my hon. Friend's point. The White Paper on the second stage makes plain the extent to which reporting will apply to firms above a certain size. Spot checking will apply at a level below that so as to ensure that the right balance is arrived at to satisfy those who want to see that prices are kept down and those who have to carry on day-to-day trading in industry.
§ Sir G. HoweThese items will be listed upwards or downwards, so that there can be no misunderstanding about them, in the guide list of typical items that the Government will bring forward.