HC Deb 25 July 1977 vol 936 cc23-4
23. Mr. David Mitchell

asked the Secretary of State for Prices and Consumer Protection whether he will seek to change the delaying powers of the Price Commission during investigations from preventing increases until approved to permitting until disapproved.

Mr. Hattersley

No, Sir. The hon. Member's suggestion was specifically rejected by the Standing Committee on the Price Commission Bill on 17th May. The power to freeze prices during investigation is justified and will not jeopardise the viability of firms under investigation.

Mr. Mitchell

Is the Minister aware that, while it may not jeopardise the viability of firms under investigation, the price in the small firms sector is determined by the price leaders in the market, and that what may enable a large firm to go on trading semi-economically will bankrupt a small firm and lead to unemployment?

Mr. Hattersley

The Chairman-designate of the Price Commission made very clear at his first Press conference that he believed that investigations into each company had to bear in mind the interests of other companies that might be directly affected in the way that the hon. Gentleman has stated. I have no reason to believe that the exercise of proper powers by the Commission would have the adverse effect that the hon. Gentleman proposes.

Mr. Madden

Does my right hon. Friend agree that the action of the brewery companies in proposing to increase their prices by 1p or 2p a pint before publication of the Price Commission's report or before prices legislation constitutes sharp practice? What can my right hon. Friend do to stop the brewers acting in this irresponsible fashion?

Mr. Hattersley

I have no power to prevent the increases that the brewers announced. Some people say that they did it because they do it every three months and it is their normal practice. I await the Price Commission's report with great interest, and I hope that the House may want to return to this subject after the report has been presented to me and when I have seen its recommendations, if any.

Mr. Giles Shaw

In relation to the question of my hon. Friend the Member for Basingstoke (Mr. Mitchell), will the Secretary of State comment on the question of allowable costs being allowed in the period of investigation? This would substantially help small firms and firms uder investigation.

Mr. Hattersley

No. There are substantial safeguards already for the viability of small firms. There are the formal safeguards under Section 9 of the new Act. There are other safeguards—for instance, the safeguards inherent in Section 2. Neither the company under investigation nor companies with which it is associated face the danger that the Opposition pretend. It is much more of a political debating point than a real fear of industry.