HC Deb 16 July 1986 vol 101 cc993-4
10. Mr. Bruce

asked the Secretary of State for Trade and Industry what representations he has received on the subject of discriminatory discounts.

Mr. Howard

Since I January 1986 my right hon. Friend has received four representations on the subject of discriminatory discounts.

Mr. Bruce

Will the Minister accept that small businesses are not impressed by the lack of Government action or by the Binder Hamlyn report? If the Minister is not prepared to take legislative action to try to protect small businesses against discriminatory discounts, will he at least consider introducing a code of practice by which large businesses should operate when dealing with small businesses in this sector?

Mr. Howard

Both the Monopolies and Mergers Commission report in 1981 and the Office of Fair Trading report in 1985 came to the conclusion that the benefit of these discounts was passed on to the consumer. Both the House and the housewives of Newcastle-under-Lyme will note that the contribution of the Liberal party on this issue is to press for measures that will lead to higher prices of goods in the shops.

Mr. Pollock

Does my hon. and learned Friend agree that one aspect of discriminatory discounts is the tax structure operated by the Japanese, which gives preference to American whisky over the superior Scottish product? Will he do all that he can to convey to his Japanese counterparts the real and increasing concern in the House about that blatant discrimination, and not shrink from taking any further robust steps that may be necessary in response?

Mr. Howard

I raised this matter when I was in Japan a few months ago, and my hon. Friend the Minister for Trade has raised it strongly with the Japanese.

Mr. Hardy

Are not the Minister, his colleagues, his Department and the Office of Fair Trading well aware both of the substantial scale and the inherently unfair nature of the discounts that apply in the retail trade? Has this not been the principal reason for the rapid change in that trade, and is it not the case that, although a substantial number of jobs may appear to be created when a supermarket is established, there are no net gains, as many small businesses go out of business or dramatically contract?

Mr. Howard

No, this is by no means the only factor responsible for these changes. A number of other factors are at work. The Government must have regard to the interests of the consumer, and as long as the consumer benefits, as these reports have found, from lower prices as a result of the discounts being passed on, any Government would have to pause and think long and hard before taking any measure that would work to the detriment of the consumer.

Mr. Michael Forsyth

Is not the question from the hon. Member for Gordon (Mr. Bruce) yet another example of the Liberals trying to have it both ways? Does he not spend his time telling the House that Aberdeen is the most expensive city in Scotland and that prices there arc intolerable, while at the same time asking the Government to take measures that will result in higher prices for housewives in Aberdeen?

Mr. Howard

I agree with every word that my hon. Friend has said. Every hon. Member is aware of the extent to which the Liberal party tries to face both ways on every conceivable issue in every constituency.