§ 12. Mr. Giles Shawasked the Secretary of State for Prices and Consumer Protection if she has received the Price Commission's latest quarterly report for the period 1st June to 31st August 1975, and if she will make a statement.
§ Mrs. Shirley WilliamsThe report was laid before the House on 23rd October.
§ Mr. ShawIs the Minister aware that for the second quarter in succession the report of the Price Commission drew special attention to the problem of nationalised industries' costs? Is the Minister aware that the most important factor is costs within industry and not the prices which industry charges? Will the Minister comment on the expression of the Price Commission to the effect that inflation seems to be abating in the private sector but is getting worse in the public sector?
§ Mrs. Shirley WilliamsThere are three reasons why the nationalised industries have produced proportionately higher costs than the private sector. First, the increase in oil prices has had a greater effect on the nationalised sector, and especially on the energy industries, than on the private sector taken as a whole. Secondly, nationalised industries are more labour-intensive and have therefore reflected the increase in labour costs. Thirdly, an attempt was made in the past year to reduce the level of public borrowing required to meet the deficits of the nationalised industries, and there are now marked signs of the deficits falling, which have had to be shown in terms of the effect on costs and, eventually, on final prices. That policy was supported by both sides of the House in the past.