HC Deb 14 March 1977 vol 928 cc23-6
26. Mr. Canavan

asked the Secretary of State for Prices and Consumer Protection how many representations he has received about the consultative document on prices policy.

28. Mr. Ridley

asked the Secretary of State for Prices and Consumer Protection what consultations have taken place in relation to the new Price Code announced recently.

31. Mr. Silvester

asked the Secretary of State for Prices and Consumer Protection what consultations he has held on proposed legislation involved in enacting the new prices policy.

Mr. Hattersley

I have already held discussions with the CBI and the Retail Consortium and shall be meeting the Food and Drink Industries Council this afternoon. My Department has received representations from a large number of interested bodies. Discussions and correspondence on my proposals are continuing, and the outcome will be assessed at the end of the consultative period on 18th March.

Mr. Canavan

In view of the justifiable demand of the trade union movement for tougher price controls, instead of just tinkering with net profit margins, why not try at least a temporary freeze on the retail prices of certain basic essentials, such as foodstuffs, fuel, rents and mortgage rates? Why on earth is coal specifically excluded from the mediocre proposals in the consultation document?

Mr. Hattersley

I believe that a general price freeze would be wrong because it would not be in the interests of the economy and any prospect for expansion would be inhibited. My hon. Friend should not talk about a general price freeze as if it were TUC policy. It is not. The TUC's economic statement called for the ability to hold down prices by freeze on selected occasions, and that is one of the proposals which appears in my consultative document.

Mr. Silvester

How does the Minister intend to prevent the new investigatory powers which he proposes in his consultative document from having an arbitrary effect on the firms which he proposes to investigate?

Mr. Hattersley

First, if the legislation is passed there will be some general criteria which the Price Commission must observe; secondly, by the character and quality of the Price Commission; thirdly, by the necessity for the Secretary of State of the time to approve what the Commission does; and, fourthly, by applying a parliamentary check to the Secretary of State.

Mr. William Hamilton

Is my right hon. Friend looking long and hard specifically at the blatant gambling which is going on in the tea market and making sure that the consumer is not being rooked in the same way as he is on coffee?

Mr. Hattersley

I shall examine the possibility of the Price Commission considering the tea situation. But I am sure my hon. Friend knows very well that the main cause of the increase in the price of tea—as may turn out to be the case with coffee—is the increase in import prices, and that is something we cannot avoid.

Mr. Channon

Does the Secretary of State appreciate that he may well get the worst of both worlds with his proposed new Price Code? It will have no significant effect on prices, but it will make industries think that it will be used in a purely arbitrary way and, therefore, will frighten off investment in them.

Mr. Hattersley

I do not believe that it will frighten off investment. With the right sort of Price Commission, which is something I want to create, industry will have confidence in the common sense and objectivity of the Commission.

On the other point, there is no possible statutory prices policy other than a general price freeze which can hold down all prices to a significant extent. As I do not believe that a general price freeze would be right, I do not even contemplate a prices policy which follows the rules that the hon. Gentleman has suggested. It is the general economic policy which must lower the inflation rate.

Mr. Madden

Does my right hon. Friend agree that many consumers believe that successive prices policies have generated more paper than benefits to them? Can he give those consumers a rough indication of the total benefits to them of successive pricing policies? Further, what steps is he taking to try to overcome speculation, in particular in the commodities market, which is in many respects undermining any hope there may be of getting popular support for prices policies?

Mr. Hattersley

The quarterly report of the Price Commission lists proposed price increases which the Commission prevented from going ahead. This, according to my hon. Friend's standards and mine, comes under the heading of benefits to the consumer which we could publicise. However, I emphasise that nobody should pretend or believe that a prices policy can reduce prices in the way that general economic strategy can do so. It must be the general economic policies which bring down inflation to tolerable levels.