HC Deb 08 April 1974 vol 872 cc7-8
9. Mr. Tim Renton

asked the Secretary of State for Trade if he will make a statement on the Government's consideration of whether to establish a Royal Commission to examine the commodity markets.

Mr. Shore

I have nothing to add to what my hon. Friend the Under-Secretary of State for Trade told the hon. Member for Bedford (Mr. Skeet) on 28th March.—[Vol. 871, c. 209–10.

Mr. Renton

I thank the right hon. Gentleman for that somewhat indecisive reply; but may I urge on him the need to make up his mind in this connection? While he is doing so, will he bear in mind that the commodity markets are primarily a reflection of the international value of commodities at any given time? Will he consider the benefit to Britain of that international value being decided in markets in London in sterling, which in 1972 represented about £45 million in invisible earnings, and that there are rival markets in Paris and Hamburg, for example, which are ready to take over from London if given the opportunity?

Mr. Shore

I note what the hon. Gentleman says, but he should not exclude from his consideration of the benefits of having international commodity markets in London that there has also been a great deal of unwelcome and damaging commodity speculation. I have nothing to add on this matter to what my right hon. Friend the Prime Minister said in answer to a Question some time ago.

Mr. Dalyell

What can be done about the current practice of the commodity markets of building an expected rate of inflation into their prices, thereby helping to bring about that very inflation?

Mr. Shore

My hon. Friend makes a serious point. That is one of the reasons why I believe that we must give careful thought to a further inquiry.

Mr. Skeet

I appreciate that the Government are very concerned about issues of speculation. Does the Secretary of State agree that foreign Governments are primarily responsible for this in oil, phosphates and copper? How does the right hon. Gentleman propose to find, by any Royal Commission, a sanction which will bring foreign Governments to heel?

Mr. Shore

The benefit of an inquiry would be, first, to help ascertain precisely where the main forces for speculation exist. Some will undoubtedly exist in this country, and some abroad. As my right hon. Friend the Prime Minister made clear when he answered a Question on the subject originally, however, an inquiry will of course consider both the international and the national aspects of commodity speculation.

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