HC Deb 06 March 1978 vol 945 cc945-9
1. Mr. Clemitson

asked the Secretary of State for Prices and Consumer Protection, when he intends to meet the Chairman of the Price Commission.

4. Mr. Michael Morris

asked the Secretary of State for Prices and Consumer Protection when he next expects to meet the Chairman of the Price Commission.

6. Dr. McDonald

asked the Secretary of State for Prices and Consumer Protection when he next intends to meet the Chairman of the Price Commission.

8. Mr. Canavan

asked the Secretary of State for Prices and Consumer Protection when he next expects to meet the Chairman of the Price Commission.

17. Mr. Giles Shaw

asked the Secretary of State for Prices and Consumer Protection when next he is going to meet the Chairman of the Price Commission.

18. Mr. Goodlad

asked the Secretary of State for Prices and Consumer Protection when he next expects to meet the Chairman of the Price Commission.

The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley)

The chairman of the Price Commission and I meet frequently. No firm date has been set for our next meeting.

Mr. Clemitson

When my right hon. Friend next meets the chairman of the Price Commission, will he congratulate him on the action taken on tea prices? Will he also ask him why similar action cannot be taken to restrain the unquenchable thirst of the brewers for high prices?

Mr. Hattersley

I am grateful for what my hon. Friend has said about the tea report. The brewers, unfortunately, pose a different problem. One of the problems concerns the structure and organisation of that industry. I am now having talks with the brewing industry in the hope that the semi-monopolistic arrangement can in some ways be broken down.

The second problem—namely, the frequency of price increases—has abated to some degree. What action we eventually take depends on the Price Commission's examination of specific parts of the industry. As my hon. Friend knows, there is an investigation into Allied Breweries. We shall know more about the industry and its pricing policy when the result of that investigation is published.

Mr. Morris

When the right hon. Gentleman meets the chairman, will he point out that having a tea price report is no way in which to undertake investigations? There has been nil consultation with those involved and nil understanding of the marketing of packaged goods. Was it not very much a by-election gimmick in view of the way in which he built it up and suddenly agreed to only a small modification, not what he was demanding a few weeks ago?

Mr. Hattersley

There is a later Question on the Order Paper on the subject of tea. However, the hon. Gentleman omitted from his litany of the Price Commission's reaction to the tea situation the fact that on Friday of the week before last the tea blenders refused to make any reduction. In the face of the order which the Price Commission made possible, the blenders have now made a reduction. That, I hope, is only the first stage. It is my policy to ensure that the price of medium-quality tea in the shops remains at or about the level recommended by the Price Commission.

Dr. McDonald

When my right hon. Friend next meets the chairman of the Price Commission, will he discuss with him the advice given by the accountants, Coopers & Lybrand, on how to avoid investigation of planned price increases, bearing in mind that the company has carried out work for the Price Commission?

Mr. Hattersley

I am not altogether conversant with the advice that that firm gives. I know two things about companies that have been employed by the Price Commission to carry out investigations. First, some of those companies have been re-employed by the investigated companies in order that they might get more good advice of the type provided by the Price Commission. Secondly, I do not believe that there is any easy formula by which a company can avoid investigation. If prices go up in accordance with formulae which are not consistent with those in the Act, the Price Commission is likely to investigate, and the prudent company must realise that.

Mr. Canavan

Will my right hon. Friend and the Price Commission reject the Common Market demands that British Rail should stop young people between the ages of 12 and 14 from travelling for half price on the railways? This is another example of Common Market inflationary policies, which means taking money out of schoolchildren's pockets and probably taking more passengers away from the railways. Is it not about time that the Price Commission told the Common Market Commission that we have had enough?

Mr. Hattersley

I know of this case only from what I have read in this morning's newspapers. As I understand it—I am open to correction—the Price Commission will not be involved. I cannot imagine by what power the European Economic Community believes that it can influence British Rail prices.

Mr. Shaw

Coming back to the Secretary of State's answer about consultation, when he next meets the chairman of the Price Commisison, will he stress that the policy should be one of consultation, not confrontation? When are the discussions between the Price Commission and the CBI to start? If he is so pleased with the tea report, why is it that the RPI does not include the Co-op's brand of tea in its register?

Mr. Hattersley

This is a narrow statistical point which I shall try to explain. The consultations that I had with the blenders were based not only on the RPI calculations but on two other surveys, both of which confirm the Price Commission's judgment.

On the question of consultation, I understand that talks are taking place between the Price Commission and the CBI about the information requirement. The idea that there is some sort of confrontation is certainly false and is not remotely substantiated by the facts. The tea report does not substantiate that idea. Despite what the hon. Gentleman has implied, there was constant communication between the four major blenders and the Price Commission.

Mr. Goodlad

Will the Secretary of State discuss with the chairman of the Price Commission the question of factual inaccuracies in the Price Commission's report? Is he satisfied that there is no mechanism for correcting such inaccuracies, having regard to his impotence to do anything about them?

Mr. Hattersley

The hon. Gentleman means the allegations of factual inaccuracies, which is a technique employed by some companies which are investigated. The Price Commission hopes that, wherever possible, facts can be agreed with the investigated party. Where that is not possible, it is made very clear. The investigations, which I have followed up in discussions with the affected industries and companies, have in my experience normally confirmed the Price Commission's accuracy.

Mr. Ioan Evans

Does my right hon. Friend agree that the co-operative movement has responded to the request made by the Department about retail tea prices and that, for the third time since August, it has led the way by making a significant reduction in shop prices? Is it not a fact that from today Britain's largest retailer will be cutting the prices of its tea to make it the most competitive national brand at 22p for a quarter pound packet, which is what the Department requested?

Mr. Hattersley

I can not only confirm what my hon. Friend said but would have repeated it in a later answer. The significant figure is 22p per quarter for medium-quality tea, which was the Price Commission's recommendation.

Mrs. Sally Oppenheim

When the right hon. Gentleman next meets the chairman of the Price Commission, will he ask him whether it is a fact that the Price Commission has now engaged the services of public relations consultants to improve its somewhat tarnished image and that it is likely to cost about £70,000 on the total budget? If the chairman tells him that that is true, will the Secretary of State tell the chairman that it is an outrageous misuse of taxpayers' money?

Mr. Hattersley

As with all agencies of this kind, the Price Commission spends its budget in the way that it chooses. I have no information on whether the Commission is employing a firm of public relations consultants. However, I do not suppose that it can rely indefinitely on the speech made by the hon. Lady in Gloucester six weeks ago.