HC Deb 15 November 1976 vol 919 cc927-8
26. Mr. Freud

asked the Secretary of State for Prices and Consumer Protection when he expects to bring forward proposals for a new Price Code to operate after July 1977.

Mr. Hattersley

I am at present considering the form that prices policy might take in the longer term. The possibilities are not confined to the introduction of a new Price Code. I intend to discuss future policy fully with interested parties before taking any final decisions.

Mr. Freud

I am grateful for that reply. Will the right hon. Gentleman bear in mind the crucial need for trade and industry to plan ahead, and afford them ample time before a new Price Code comes upon them?

Mr. Hattersley

I understand that very well. I believe that they need stability and certainty, and I shall provide as much of that as I can during the discussions that I hope will open quite soon. I take the point.

Mr. Giles Shaw

I have two quick questions to put to the right hon. Gentleman. First, in relation to the existing code, will he confirm that people are entitled to pass on the cost of the national insurance contribution? There is some doubt about that. Secondly, with regard to the negotiations on a subsequent code, will the right hon. Gentleman bear in mind the CBI document "The Road to Recovery" and take note that it estimates that the average profit margin is no higher than 3 per cent. in industry as a whole? Does the right hon. Gentleman regard an adequate profit margin as the bastion of any new pricing policy?

Mr. Hattersley

The answer to the hon. Gentleman's first question is clear. It was made clear by my right hon. Friend the Chancellor of the Exchequer, namely, that that must be allowable under the Price Code. There is no question about that.

On the second point, I understand the need for profits to be sufficiently high to allow for proper levels of investment and thereby stimulate employment. What I hope a new prices policy can do is to encourage the making of those profits that are used for that purpose. I hope that the argument about profits in this country in the future can be more concerned with the use to which profits are put than with the level at which profits happen to be at any one time.