HC Deb 17 June 1999 vol 333 cc541-3
1. Mr. Phil Sawford (Kettering)

What action he is taking against market distortions that result in consumers having to pay more for products in the United Kingdom than in the rest of the European Union. [86490]

The Minister for Competition and Consumer Affairs (Dr. Kim Howells)

Before I answer my hon. Friend's question, may I say what a great pleasure it is to see the hon. Member for Tiverton and Honiton (Mrs. Browning) at her new post as spokesperson for trade and industry? I am sure that it is well deserved. She has always displayed a remarkable independence of spirit. Her views and hostility to the euro, for example, make those of her leader, the right hon. Member for Richmond, Yorks (Mr. Hague), seem Solomon-like in their measured judgment.

To return to my hon. Friend's question, the Competition Act 1998 will provide a tough new regime for dealing with anti-competitive activities across the United Kingdom economy. The Government are committed to ensuring fair and vigorous competition in UK markets so that prices are set at competitive levels.

We need to know, first, whether prices are so very different. Current information is inadequate. The Government will shortly announce the start of the commissioning process for a study of international price comparisons to provide robust and up-to-date evidence of international price differences.

Mr. Sawford

I thank my hon. Friend for that reply. Many of my constituents in Kettering know that they are paying over the odds for many of the goods that they purchase—not just cars, but many other consumer goods. I welcome and applaud the steps that my hon. Friend is taking to give higher priority to consumers—unlike the previous Government, who talked an awful lot about market forces and competition, but failed miserably when it came to taking action in the interests of the British consumer.

Dr. Howells

We are absolutely determined that where there has been a weakness in the supply of statistics, it will not be filled by sometimes worthy and sometimes less worthy speculation in the press about rip-off Britain and so on. When I took on my present job, I was extremely surprised to discover that there were no mechanisms for comparing prices. We are determined to put them in place so that the people of Britain know whether, in international market comparisons, they are paying higher rates than they should for the goods that they purchase.

Mr. Michael Fallon (Sevenoaks)

Is not the major market distortion due to the extra burden of taxation and new regulation from the Government, which feeds directly through to consumer prices? Instead of hearing speeches about red tape, why do we not see some action from the Government to reduce the biggest burden on business, which is the Department of Trade and Industry?

Dr. Howells

I am still hacking my way through the red tape that the hon. Gentleman left when he was in government. Such comments are a bit rich, coming from a party that ran this country for 18 years, during which time car manufacturers referred to the UK as "Treasure Island." The Conservative Government did very little to drive down prices or increase competition. Our Competition Act 1998, which kicks in from March next year, will ensure that there is no price fixing and that there are no cartels and no mergers that are designed to distort markets. With increased competition, we will see prices fall.

Fiona Mactaggart (Slough)

I am pleased that the Government are taking tough action on behalf of the consumer. Our achievement in getting record low inflation is the best thing that a Government can do for the consumer.

Will my hon. Friend give me an assurance that he will not allow big companies to delay and defer the process of investigation by competition authorities? The wrapped ice cream market, which for many years has given rise to concern, is currently under investigation. The major company in that market is once again doing its best to kick the investigation into the long grass. I urge my hon. Friend to make sure that that cannot happen.

Dr. Howells

I cannot comment on the investigation being conducted by the competition authorities into the ice cream market. It is an important market and a sensitive issue. However, we have engaged in talks with the Office of Fair Trading and the Competition Commission to ensure that there are proper time limits and that those limits are assessed and adhered to with proper rigour, so that companies are not kept waiting, jobs are not put in jeopardy and the innovative efforts of companies are not sabotaged.

Mr. Nick Gibb (Bognor Regis and Littlehampton)

Does the Minister think that the massive increases in diesel duty levied by his Government, which have increased the price of diesel by 21 per cent. since the Government came to power, and which have added enormously to the cost of transporting food and consumer goods, have helped or hindered consumers in what they pay for products in the United Kingdom?

Dr. Howells

I had discussions recently with a number of companies, which told me that that increase was not a great hindrance to prices and competition. We have an extremely efficient transportation system in the UK and it is well used. Given that the previous Government introduced the fuel escalator, it is a bit rich for the hon. Gentleman to ask such a question now.