REPEALS (Hansard, 12 February 1979)

§ Mr. Maclennan
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mrs. Sally Oppenheim (Gloucester)
These amendments, moved so swiftly by the Under-Secretary without any accompanying remarks, represent a considerable and humiliating climb-down by the Government. The fact that the Government have been forced to move these amendments in direct contradiction to their position in this House on all stages of the Bill is not so much an indication of any wish to be reasonable and accept the legitimate concern of people in industry and elsewhere as a reaction to the fact that they did not think they could defeat in this House the previous amendment moved in another place. Thus, they have demonstrated clearly that they can no longer get even a one-clause Bill through both Houses of Parliament without significant and important amendment. Therefore, they have lost control not only of events in the country but in the House as well.
Despite the Secretary of State's remarks on Third Reading that the basic principle of the Bill would be achieved only if it was returned unscathed from another place, he has not so far indicated anything to show that he now considers that the basic principle of the Bill has been undermined by the amendments proposed. Similar amendments to those that were carried in another place stood on the Order Paper—

§ Mr. Deputy Speaker (Sir Myer Galpern)
Order. I am sure the hon. Lady is fully aware that the House has already agreed to amendment No. 1. We cannot discuss that one again. We are discussing amendment No. 2.

§ Mrs. Oppenheim
I, too, am discussing amendment No. 2. Similar amendments appeared on the Order Paper in Committee in this House dealing with raw materials and the question of the Price Commission's complete discretion in this respect. Those amendments were supported by Members of all four parties. That was an indication of the concern that was felt throughout this side of the House for the position of companies in circumstances where raw material costs rose beyond their control and where they might have been penalised.
851 The Government amendment which we are now discussing and the one before, which we are not debating, do not go as far as we would have wished, and they certainly do not make this measly little Bill any more acceptable to us. Nevertheless, they represent an important concession on the Part of the Government. The situation which existed previously, in which a company could have its prices frozen at a time of rising raw material costs beyond its control, and with the whole question of an interim award lying entirely within the discretion of the Price Commission, is now substantially changed as a result of the amendments.
In another place the Government spokesman maintained, in his resistance to the original amendment, that the ability to pass on raw material costs was dependent upon whether the Price Commission considered that the company was efficient. What more irrelevant qualification could there be? One has only to look at the record of industry in the past year. In a period when The Economist commodity index in sterling terms rose by 25 per cent. and labour unit costs rose by more than 15 per cent., the retail price index rose by only 8.4 per cent. Clearly, industry does not need any advice from the Price Commission about the efficient absorption of costs. Indeed, the fact that that degree of absorption took place last year makes it all the more dangerous, in investment and growth terms, that more pressure should be put on industry this year.
In another place, when the amendment which we are now discussing was moved, the Government acknowledged what the Secretary of State has strenuously denied at every stage of the Bill—namely, that the Price Commission needed a more precise obligation than the one in section 2 of the parent Act to take account of raw material cost increases. The Price Commission's discretion must be more circumscribed than it was originally, and that is the effect that these amendments seek to accomplish. Their significance lies in the fact that the Price Commission will not merely be permitted to take account of raw material cost increases but will be specifically exhorted to do so. This exhortation may well be interpreted in the courts—if a company were to bring legal action against the 852 Price Commission—as laying a mandatory duty on the Price Commission.
The other important concession inherent in these amendments is that made in another place, that an increase in Government rates would automatically be an allowable cost under section 2 of the Act. Two important concessions have been made which, even though not exactly spontaneous, are nevertheless welcome. As a result, this vindictive little measure, which, according to the latest opinion polls, has singularly failed to impress the electorate—as I predicted—is rendered slightly less obnoxious than it otherwise would be.

§ Mr. Michael Neubert (Romford)
It may come as a surprise that anybody else should be interested in the fate of this Bill. I call upon the Under-Secretary of State to give some explanation of his silence this evening, because these amendments—

§ Mr. Deputy Speaker
Order. The Minister has not been silent. He has moved "That this House doth agree with the Lords in the said amendment". We have already agreed to amendment No. 1, so we are dealing only with amendment No. 2.

§ Mr. Neubert
Perhaps the Under-Secretary will go beyond the mere moving of the amendment and give some explanation to the House, first of its purpose and secondly how it is that within the space of less than a fortnight the Government are prepared to accept an amendment to the Bill when in Committee on 31 January they were adamant that the Bill must stay as it was, inviolable, except for the point that the Government conceded to the Scottish nationalists that it ought to be reviewed at the end of one year.
May I also ask, Mr. Deputy Speaker. why it is that the amendment is set down as the only business for the evening, with nothing to follow? It is only 6.20 p.m. Could not the Under-Secretary fill out a little of the time left to us by explaining the purpose of the amendment?

§ Mr. Giles Shaw (Pudsey)
In so far as we are discussing, under the amendment, the schedule to the Bill, may I ask the Under-Secretary of State—or, indeed, the Secretary of State. if it is worthy of his 853 time to reply—to say whether he considers that it is now necessary to issue, possibly within a revised schedule or in some other way, definitions of what is meant by "imported raw materials"? Without such a definition there could be a certain amount of difficulty in establishing how far the concession, which we so much welcome, is to run.
I have three specific questions to put to the Minister. First, would raw materials include those materials which are not directly raw but part-processed, such as steel for manufacture, which is clearly not raw steel but is in the form of tinplate, or whatever it might be?
Secondly, would they also include, in terms of importation, imports from within the Community? I assume that they would, because imports are now generally considered to be both within and without the Community. It may be important fur that to be defined.
Thirdly, in relation to the commitment given by the noble Lord, Lord Jacques, with respect to rates, may I ask the Secretary of State whether such a concession would apply also to changes in subsidy which would directly affect price? I have in mind certain agricultural produce, such as milk, butter and so on, which reflects the subsidy. If the subsidy is removed, one assumes that consequentially the price Increase thus generated will be admissible under the Bill.

§ The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley)
I hope, Mr. Deputy Speaker, that I can remain within the rules of order, in discussing the amendment to the schedule, by at least observing the rule of brevity.
Three things need to he said about the second amendment, which the Government commend to the House. First, like the first amendment, which was passed unanimously and without discussion, it reflects exactly an amendment which was tabled in Committee by the Scottish National Party and which I said was acceptable to us at that point, although it was not called by the Chair. The point made in the schedule, therefore, is not a new point but one that was conceded by the Government in Committee, although it was one on which a vote was not possible since the appropriate 854 amendment was not selected for debate. The idea that the point made in the schedule, or anywhere else in this item of business, is a new concession is pure and absolute fantasy.

§ Mrs. Sally Oppenheim
Why was it not introduced by the Government in Committee?

§ Mr. Tim Smith (Ashfield)
rose—

§ Mr. Hattersley
May I answer the hon. Lady, who talks all the time from a seated position and therefore has precedence over her hon. Friends who get up in a well-mannered fashion? The hon. Lady asks why we did not concede the amendment in Committee. You, Mr. Deputy Speaker, ought to answer that, with respect. We did not concede it because you did not call it. Had you called it, we would have conceded it.

§ Mr. Tim Smith
How can the Secretary of State say that, when he said on Second Reading that any concession of that kind would be completely inconsistent with the principle of the principal Act, which, as he knows, says in section 2 that all these matters are for the discretion of the Price Commission?

§ Mr. Hattersley
The hon. Gentleman is almost right, but his error invalidates his question. He is quite right in saying that I could not possibly commend this amendment to the schedule to the House, or the principal amendment, were it to impede the Commission's discretion. If the hon. Gentleman will do the House the courtesy of reading the Act and discovering the parts of it to which these amendments apply, he will see that the passing of these amendments in no way impairs the Commission's discretion, and therefore I have been able to concede them.

§ Mrs. Sally Oppenheim
As the right hon. Gentleman has misheard and misrepresented my remarks, I shall now make them clear to him in the form of a question. What I was asking was this: if the Government had accepted the principle of the amendment and the only reason why it was not moved or voted upon in Committee was that it was not called, why was it not introduced by the Government in Committee in another place? Why did the Government have to wait for the Report stage to introduce it, and after a singular defeat in Committee in another place?

§ Mr. Hattersley
All that the schedule seeks to do, and all that the amendment to which it relates seeks to do, is to emphasise what already exists, which is the Commission's obligation to take into account, where it regards it as appropriate, increases in the price of imported raw materials. It is a fine point whether the House would wish to do it, and whether the Government would approve it, simply to emphasise a point that is already in the parent Act.
I am perfectly happy to see it emphasised if that suits the convenience of the Scottish National Party, if it is to the pleasure of the Upper House and if it gives some consolation to the hon. Lady. I am also perfectly prepared for it not to be emphasised, since it appears in the parent Bill already. In that sense of principle, I am agnostic about the amendment.
My agnosticism enables me to answer the point asked of me directly by the hon. Member for Pudsey (Mr. Shaw), which was whether part-processed materials are to be included in the schedule, whether imports from the EEC are to be included in the schedule and whether subsidies which apply to the prices of imported raw materials—I take it that the hon. Gentleman means foodstuffs and things related to the common agricultural policy and to the green pound and other things which are subsidised in one form or another—are to be taken into account.
I am happy to say that those questions arc wholly for the discretion of the Price Commission, because the amendment leaves the Price Commission's discretion unimpaired. In those terms, I am happy to commend it to the House.