HC Deb 05 March 1979 vol 963 cc876-8
2. Mr. Neubert

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

15. Mr. Canavan

asked the Secretary of State for Prices and Consumer Protection when he 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. Neubert

Although several factors contributed to the decision, does not the Price Commission's 12-month freeze on British Oxygen prices cast some doubt on denials that the Commission is acting as a sanction in support of the Government's pay policy? In this connection, was not the Secretary of State's speech to Lancaster Labour Party a fortnight earlier highly significant? In that speech he linked the importance of private sector pay settlements to inflation in the next few months with the increased powers recently given to the Price Commission.

Mr. Hattersley

The hon. Gentleman continues in vain his efforts to demonstrate that I direct the work of the Price Commission. I do not, nor am I able to under the law. What the report into British Oxygen demonstrates is that all costs contribute to prices, including wage costs. If that comes as news to the hon. Gentleman, it does not to anybody else.

Mr. Canavan

Will my right hon. Friend tell the Chairman of the Price Commission that it is about time he started using his powers to freeze prices instead of standing by and watching profiteers exploiting ordinary working people? For example, why were Scottish & Newcastle Breweries Ltd. allowed a recent increase of 3p on a pint of beer when that company's pre-taxed profits for last year alone amounted to £35 million?

Mr. Hattersley

I suspected that that was the supplementary question which my hon. Friend would ask. The powers of the Price Commission enable it to make discretionary investigations of price applications and to make judgments about where an investigation is justifiable and whether a price increase could be justified, against the criteria that have been set down by the Act. It is not for me to interpret how the Price Commission acts in relation to individual companies. We must assume that in the case to which my hon. Friend referred the Commission decided that an investigation or freeze was not within the terms of the Act. In the case of two other breweries, where the action sought by my hon. Friend was taken, we must assume that the Commission judged that that was within the terms of the Act.

Mr. Tim Smith

Is the Secretary of State aware that in almost every Price Commission report to date the Commission has commented on the management efficiency of the company under investigation? Will he ask the chairman of the Commission to define management efficiency? If the Commission does not do so, does the Minister believe that it is qualified to comment upon it?

Mr. Hattersley

I do not believe that to be a task which I can impose rightly on the chairman of the Price Commission.

I believe that in a number of reports, known both to myself and to the hon. Gentleman, it has been demonstrated that with greater management efficiency the consumer can be spared an unnecessary price increase. It is the duty of the Price Commission to ensure that when a price increase is unnecesary it is not implied. I hope that the Price Commission will continue to carry out that duty.

Mr. Skinner

Will my right hon. Friend accept that if the Government are goaded by the Opposition into switching from direct taxation to indirect taxation, in the next Budget or any other, that will increase prices? Will he resist any moves in that direction in every capacity in which he serves?

Mr. Hattersley

The Budget judgment and intentions are not matters for me. The Chancellor of the Exchequer is as well aware as is my hon. Friend that any increase in indirect taxes increases the cost of living and the cost of people's normal purchases. On the other hand, my right hon. Friend's principal obligation on inflation is to run the sort of economy that holds prices down and beats inflation in the long run. He has to balance the alternative obligations, all of which lead to the same end.

Mr. Giles Shaw

The Secretary of State referred earlier to management efficiency. As he is meeting the chairman of the Price Commission tomorrow, will he discuss the amount of management time that is wasted inefficiently in dealing with Commission inquiries? Why does the Commission send out detailed questionnaires and follow them up with detailed questionnaires from the consultants it employs? Why cannot the Commission be more efficient?

Mr. Hattersley

The hon. Gentleman ought to give some hard examples rather than make general allegations. A number of companies that have been investigated by the Commission have published their appreciation of the way that the Commission works and endorsed its judgment. If the hon. Gentleman wants to give examples of unnecessary questions and time being wasted, he should state them specifically, instead of making general allegations.

Mr. Giles Shaw

I will.