Price Restraint (Hansard, 8 December 1975)

§ 2. Mr. Mike Thomas
asked the Secretary of State for Prices and Consumer 3 Protection whether she will make a statement on the progress of her negotiations for price restraint.

§ 18. Mr. Giles Shaw
asked the Secretary of State for Prices and Consumer Protection whether she will make a statement about the progress of her consultations with the CBI and all other interested parties on the subject of voluntary price restraint.

§ 26. Mr. Scott
asked the Secretary of State for Prices and Consumer Protection whether she will make a statement on the progress of her consultations regarding the introduction of a Selective Price Restraint Scheme.

§ The Secretary of State for Prices and Consumer Protection (Mrs. Shirley Williams)
Discussions are proceeding with the CBI, the Retail Consortium and individual trade associations. I believe that the negotiations will succeed, because industry and commerce recognise how vital success is, in the battle against inflation, and the need to concentrate the initial benefits of declining costs on important items in the family budget.

§ Mr. Thomas
I thank my right hon. Friend for that reply. What progress is being made on the inclusion of the nationalised industries in the scheme? In particular, what is the relevance of her Written Answer to me in which she said that she will refer the question of fuel tariffs and charges to the National Consumer Council? Has my right hon. Friend any information about the price restraint scheme and the proposed scheme distorting competition and the retail price index? Allegations of that sort are being made. Lastly, what view has the National Consumer Council taken of my right hon. Friend's proposals?

§ Mrs. Shirley Williams
There is a later Question on the Order Paper dealing specifically with nationalised industries. My hon. Friend may know that last week I made a reference to the National Consumer Council asking it to study the impact of fuel costs on the budgets of low-income groups and families in particular. With regard to my hon. Friend's third question, I assure him that there is no question of distortion of the retail price index. The items in the scheme will be drawn from most fields of con- 4 sumer spending. The selection of the items depends on the outcome of negotiations with industry. Therefore, within the scheme there will be items both within the RPI and outside it, and the accuracy of the RPI as a yardstick of living costs will be in no way affected.

§ Mr. Shaw
Industry obviously recognises the importance of problems of inflation. Why is it that at the same time as seeking restraint on prices the right hon. Lady also supports the extension of the dock labour scheme, which will increase distributors' costs and may increase unemployment?

§ Mrs. Shirley Williams
That is not a question for me.

§ Mr. Madden
Does my right hon. Friend accept that the major problem of people in Britain today remains making ends meet, and that, whatever the agreement made by the interested parties, there is considerable misunderstanding by consumers generally of what price restraint policies are currently in force and may well be in force in the future? What efforts will my right hon. Friend make to make more widely understood among the general public the price controls that exist, and what will be done to enforce them—something which we all fear is not done today?

§ Mrs. Shirley Williams
My hon. Friend may care to look at the way in which costs have moved over the past two years. If he does that carefully, by looking at the reports of the Price Commission, I think he will find that he cannot sustain his last remark. I accept that there are problems about publicising the forms of price control that exist. One of the matters that we are taking into account most carefully in our proposals for the price restraint programme is the necessary publicity. The price comparison exercise is directed at the individual consumer in the High Street. That is where the information is being made available.

§ Mrs. Sally Oppenheim
Will the right hon. Lady now answer the questions she failed to answer in the debate the other night, as to how many items, taken from the list her Department has circulated, she will take as an absolute minimum in any voluntary agreement she may enter into? Will she confirm that for every 5 price held down under cross-subsidisation another will have to rise by more than it would otherwise have risen?

§ Mrs. Shirley Williams
I cannot answer the first part of the hon. Lady's question, and I do not think that it would be right to do so, because we are consulting industry, and it would be inappropriate to answer on the basis of a series of dogmatic positions. With regard to the second part of the hon. Lady's question, it is not the case that every item within the price restraint will depend on cross-subsidisation. Certainly some will, but it is not the case that all will.

§ 27. Mr. Wakeham
asked the Secretary of State for Prices and Consumer Protection how she proposes to bring the cross-subsidisation of products by manufacturers and retailers, proposed as part of the Selective Price Restraint Scheme, within the terms of the Restrictive Trade Practices Act.

§ Mr. Maclennan
The Selective Price Restraint Scheme is designed to keep down the prices of a range of items of importance in family expenditure, and my right hon. Friend will be ready to use her powers under Section 2 of the Restrictive Trade Practices Act 1968 to approve agreements, made at her request in pursuit of the scheme, which relate exclusively to prices to be charged and whose object is to restrict increases in those prices.
She has, however, no power to approve agreements designed to increase prices.

§ Mr. Wakeham
As the Government seem to be aware of the danger of the scheme possibly distorting the retail price index, will they take steps to see that proper publicity is given to any distortions which may occur, so that the credibility of the retail price index does not take the battering that it took at the last election?

§ Mr. Maclennan
No one has sought to discredit the retail price index as an authoritative and accurate account of the movement of prices, and I do not imagine that that is the hon. Gentleman's purpose in putting that supplementary question. My right hon. Friend will issue a consultative document on an amendment to the Price Code, designed to enable firms to increase the prices of their products 6 where that is necessary to enable them to hold down the prices of items included in the Selective Price Restraint Scheme.

§ Mr. Mike Thomas
Is my hon. Friend aware that it never ceases to amaze my hon. Friends and me that Opposition Members should seek to find so many loopholes in any proposal to protect the poor from the effect of inflation? Will he take back to his colleagues the message that some hon. Members are most concerned to get this scheme into action, are disappointed that it is taking so long, and look forward to a speedy outcome of the negotiations?

§ Mr. Maclennan
From the moment of its introduction, Opposition Members sought to snipe at the Government's counter-inflationary policy. I am glad to say that it remains intact and that their attacks have been very wide of the target.

§ Mr. Norman Lamont
If the retail price index is to be fiddled in this manner, what compensation will the Government give to subscribers to their index-linked savings scheme—or is the answer that it does not make much difference to the long-term rate of inflation?

§ Mr. Maclennan
The hon. Gentleman should withdraw that remark, suggesting that my right hon. Friend is engaged in some dishonest practice. He must know that that is untrue. I ask him to withdraw the remark, because it is inappropriate and unfitting to a Front Bench spokesman.

§ Mr. Thomas
On a point of order, Mr. Speaker. I rise to give the hon. Member for Kingston-upon-Thames (Mr. Lamont) an opportunity to withdraw a remark which I hope and believe he wishes now that he had not made. During Question Time, he alleged that my right hon. Friend the Secretary of State for Prices and Consumer Protection was "rigging" the retail price index. I ask the hon. Gentleman to withdraw that remark, and I ask you, Mr. Speaker, to encourage him to do so.

§ Mr. Speaker
In fact, the actual word used by the hon. Member for Kingston-upon-Thames (Mr. Lamont) was "fiddling". Although, in the context in 7 which he used the word, I did not construe it that he intended to imply dishonesty, I must say that I deprecate words of that kind.

§ Mr. Lamont
I intended in no way to imply that the right hon. Lady had behaved dishonestly or dishonourably. I was referring merely to her attempt, which I thought futile and, in the long run, self-defeating, to hold down prices artificially.

§ Mr. Adley
Further to that point of order—

§ Mr. Speaker
No. I think that we have disposed of it now.