HC Deb 02 May 1977 vol 931 cc14-7
10. Mr. Dodsworth

asked the Secretary of State for Prices and Consumer Protection what representations he has received from consumers about nationalised industries' prices since the beginning of the year.

Mr. Hattersley

Since the beginning of 1977 I have received about 70 representations on various aspects of nationalised industry prices. Most of these were from individual members of the public.

Mr. Dodsworth

Is the Secretary of State aware that most consumers feel that the Government have a direct responsibility for the prices being charged by nationalised industries, that they are bewildered by the succession of increased charges for rail fares and for gas and electricity and that they feel bewildered by the calculations, which seem to be designed to baffle them and to persuade them that price increases are justified?

Mr. Hattersley

If they are bewildered, I hope that the hon. Gentleman will join me in enlightening them. Nationalised industry prices have risen during the past three years because the Government which preceded this one chose artificially to keep down nationalised industry prices, irrespective of the effect on public expenditure, the rate of inflation and the public sector borrowing requirement. We put that right with the support of the more economically sophisticated hon. Members on the Opposition side.

Mr. Alexander W. Lyon

I recognise the force of the point made by my right hon. Friend, but does he recognise that our attack upon inflation does not appear credible to people who have had their gas prices and postal charges put up when in neither case was it necessary for economic viability in the industry concerned and it was simply a reflection upon the general economic policy of the Government? At least, at this stage the Government could have said that those two prices need not have gone up.

Mr. Hattersley

Let us consider the gas price for a moment, which I described at the time as a regrettable necessity. Had we not increased gas prices in the way that we did, £100 million would have been added to the public sector borrowing requirement, which would have had to be raised in some other form if we were to discharge our obligations to the IMF. We chose to do it in that way. I know that one can argue that there are other ways and that some of them might have been less socially and, indeed, politically damaging, but I have no doubt that the general pattern, of which gas was a part, is the policy that will produce a real improvement in the inflation rate towards the end of the year.

Mrs. Sally Oppenheim

Is the Secretary of State aware that the latest Price Commission report, on page 11, again confirms that nationalised industry prices have risen far faster over the past three years than those of the private sector, and that that is not, as he claims, because of price restraint in the past, because they have been more than compensated under the Statutory Corporations Act? Will he, therefore, give an undertaking that it will be the first priority of his new Price Commission to examine and investigate all aspects of nationalised industries' prices?

Mr. Hattersley

I fear that the hon. Lady did not hear or did not understand my answer to the previous question. Nationalised industry prices have gone up over the past three years because the Government which she supported chose in the previous four years to hold them down in an artificially and economically damaging way.

Mrs. Sally Oppenheim

No.

Mr. Hattersley

As far as the Price Commission's intentions are concerned—the hon. Lady now confirms that she does not understand the Bill—the decisions as to what would be investigated are for the Price Commission, not for me.

Mr. Freud

Whatever the merits of the Secretary of State's answer, does he not now recognise that it is high time that the nationalised industries came under the same investigation and the same directions as industries in the private sector?

Mr. Hattersley

I am always encouraged by criticisms which begin by an hon. Member referring to "whatever the merits" of my answers. I am even more encouraged by the second half of the hon. Gentleman's question. The Price Commission Bill, which he clearly has not read either, imposes on nationalised industries exactly the same obligations as those imposed on the private sector.