HC Deb 04 February 1965 vol 705 cc314-5W
79. Dame Irene Ward

asked the First Secretary of State and Secretary of State for Economic Affairs if he will seek powers to enable Her Majesty's Government to analyse the increased prices of nationalised industries.

Mr. George Brown

Two sets of considerations underlie the pricing decisions of the nationalised industries. On the one hand it is important, if we are to secure economic expansion and avoid a possible misallocation of scarce resources, that the nationalised industries should earn a reasonable rate of return on the extensive capital which they employ. We accordingly attach importance to the achievement of financial targets agreed between the individual nationalised undertakings and the Government. On the other hand we attach the greatest importance to the prices and charges of the nationalised undertakings being increased only where this is justified. We expect them to make every effort to absorb increases in costs by increasing efficiency, as they must if they are to remain competitive.

Where a price increase cannot be avoided, we regard it as important that the justification for it should be capable of being publicly demonstrated in an appropriate manner. In some cases (for example, passenger fares in the London area) these charges are, of course, subject to statutory forms of control; in others (for example electricity and gas tariffs) proposed increases are submitted More decision to independent consultative bodies, set up by statute, whose findings take into account views expressed by consumers and whose reports are published. My right hon. Friends are in close and continuous contact with the nationalised bodies for which they are responsible and we see no present need to seek further statutory powers.