Recommended Prices

HC Deb 30 January 1978 vol 943 cc11-3

8. Mr. Litterick

asked the Secretary of State for Prices and Consumer Protection if he will use the Price Commission Act to stop the use of artificially inflated makers' recommended prices.

Mr. Maclennan

Yes, Sir. My right hon. Friend shortly proposes to direct the Price Commission to examine recommended retail prices in bedding. Further directions relating to the practice in other sectors may be issued subsequently. The decision to take action on a sectoral basis does not preclude legislation or other steps at a later stage to prohibit the practice completely.

Mr. Litterick

Is not the Minister aware that housewives are confronted in the shops with two sets of prices, one of them "phoney" and the other a statistic which is either an absolute sum of money or a percentage showing the alleged reduction from one of these phantom prices? This greatly confuses the mechanism of consumer choice, and it makes life difficult for the housewife. Does my hon. Friend agree that, given that situation, housewives through out the country would welcome the banning of the use of the recommended retail price system because it is now a ramp?

Mr. Maclennan

I agree with my hon. Friend that the recommended retail price system gives rise to confusion of the sort to which he has referred. It was with that in mind that the House took powers in the Price Commission Act to enable the Price Commission to examine cases in which it was particularly confusing and to make recommendations for its removal. We are proceeding entirely in line with the provisions in the Act and will be looking at a number of other sectors. That is not the end of the story. It will be possible for us to proceed across the board if it is appropriate to do so.

Mr. Freud

Would it not be possible to avoid the artificially inflated maker's recommended prices by asking the Price Commission to ensure that people refer only to prices which are charged in other shops, which would then be the opposite to "We are never knowingly undersold"?

Mr. Maclennan

That matter will fall to be considered by the Director General in his review of bargain offers.

Mr. Greville Janner

Is my hon. Friend aware that the pernicious system of so-called double pricing is a trap not only for the housewife but for the honest retailer who has to introduce it so that he can keep up with his dishonest competitor? Will he ensure not merely that his very welcome announcement results in a recommendation being made but that action is taken swiftly?

Mr. Maclennan

It was because of our general concern about the problem that the matter was referred to the old Price Commission, and its general report on the subject was made available to us. I can give the undertaking that my hon. and learned Friend has asked for, that any recommendation from the Price Commission for action to be taken will be acted upon most speedily.

Mr. Giles Shaw

Will the Secretary of State confirm that in the discussion on the Price Commission Bill he pointed out—and the Conservative Party agreed with him—that the powers did not include powers to ban the practice altogether? We accept that reform may be necessary. Will the Minister confirm the Government's position?

Mr. Maclennan

It is possible to proceed other than by the arrangements under the Price Commission Bill to which I have referred.