Prices Policy (Hansard, 20 December 1976)

§ 12. Mr. Silvester
asked the Secretary of State for Prices and Consumer Protection when he next plans to discuss prices with the TUC.

§ Mr. Hattersley
I intend to meet TUC representatives again shortly as part of my continuing discussions with them about prices policy.

§ Mr. Silvester
Is the abolition of the Price Code an option that the Government are retaining in any discussions they may have about a possible further stage in wages policy in the summer?

§ Mr. Hattersley
It is an option we can hardly avoid. Most of the legislative powers under the Price Code run out in the summer, and the three options we possess are to offer legislation to the House to renew it, to abandon a prices policy or to have a different one. Since the Prime Minister and others, including myself, have ruled out the second option—namely, that of having no price policy at all—we are left with the choice between a Price Code to be offered again to the House and a new prices policy. I hope to make an announcement on that subject in the new year.

§ Mr. Ioan Evans
In view of the fact that the trade union movement has given tremendous co-operation to the Government in respect of the social contract in restraining personal incomes, which has assisted a great deal in preventing inflation going higher than it is, will my right hon. Friend examine the TUC's proposals in respect of economic and industrial strategy, since co-operation is essential if we are to prevent prices going higher and if we are to have a more constructive 16 approach to the problem than we now obtain from the Opposition?

§ Mr. Hattersley
The TUC and trade union members throughout the country have made an enormous contribution by accepting the pay policy, which means that they have made personal sacrifices. I hope that we can continue to rely on that support during the coming year. We must convince them that we are operating relevant and realistic economic policies on a wide variety of subjects. I shall try to convince the TUC of that fact in initiating my new prices policy.

§ Mr. Neubert
As the right hon. Gentleman has announced that the rate of inflation will fall to 15 per cent. in the last quarter of next year, will he say how prices will hover in the meantime?

§ Mr. Hattersley
It is never wise to make predictions round about or within 1 or 2 per cent. I stick by what I have said in the last three months. We are on a plateau, and prices will hover around 15 per cent. and there will be a reduction some time next year. It would be foolish to attempt to be more precise than that.

§ Mr. Giles Shaw
When the right hon. Gentleman next meets the TUC and discusses prices, will he bear in mind that a large number of trade unionists do not like price freezes, particularly in the nationalised industries? Will he confirm that it is no part of his intention to reintroduce a price freeze in those industries?

§ Mr. Hattersley
The problem in terms of nationalised industry prices which the consumer has suffered in the last two and a half years flows from the fact that the freeze was applied by the Conservative Government. We have had to negotiate ourselves out of that difficulty. Two things must happen with regard to nationalised industry prices. First, they must be realistic in terms of the efficiency of the industry, and, secondly, they have to pay proper respect to the other needs of the economy with an adequate prices policy in the general fight against inflation. I think that on balance we are coping with those considerations much better than did our predecessors.