§ 27. Mr. Biffenasked the Secretary of State for Trade and Industry if he will 1023 make a statement concerning the revised code for the guidance of the Price Commission that is planned for the autumn, in the light of the latest evidence of prevailing trends in domestic prices and profit margins and the overall level of demand in the economy.
§ Sir G. HoweThe latest economic indicators suggest that the economy is growing in line with the Budget forecasts. I am not yet ready to make a statement concerning any revision of the code for the autumn.
§ Mr. BiffenIs my right hon. and learned Friend satisfied with the way the Price Commission is interpreting the current code? Notwithstanding his reluctance to anticipate any statement concerning phase 3 in the autumn, can he none the less take this opportunity to say whether he expects the autumn code for prices to be more relaxed or more stringent?
§ Sir G. HoweAs was explained to the House at the time the code was adopted, we certainly need time to see whether it is likely to need any change. It has been working for only two months. It is worth noting that during that period only one-third of the applications have been approved in full by the Price Commission. Of the remaining 162 dealt with up to the end of June nearly two-thirds were either approved in reduced form or withdrawn after scrutiny by the commission.
§ Mr. BennIs the Minister aware that it is not the prices in phase 3 which is now concerning the community but those in phase 2? Is he aware that with a rapid increase in prices, many of them authorised by the commission, with wages rigidly controlled, with a crisis in living standards for people affected, and the fresh impetus to rising prices given by a fall in the value of the pound, the Government must make clear their policy for price control during phase 2? When are we to debate the Price Commission report with that in mind?
§ Sir G. HoweThe Price Commission report will be available for discussion no doubt once it has been published. What needs to be fully understood is the extent to which the commission is exercising a firm and effective control in preventing 1024 prices being increased as far as they would otherwise be in the light of changing costs of commodities entering this country.
§ Mr. PowellHow can any code lay down general principles for deciding in advance which prices should rise and by how much and which should fall and by how much?
§ Sir G. HoweA code can, as this code does, indicate to the commission which performs the task the extent to which costs which bear upon prices should or should not be passed through. Such a code can and does have a significant effect upon price levels.