§ Mr. John Fraserasked the Minister of Housing and Local Government if he will now issue a circular to local authorities advising them not to consent to requests from fixed price contractors for price increases attributed to devaluation, where it can be shown that home-produced substitutes are available for those imported elements or products which give rise to additional costs.
§ Mr. MacCollAuthorities seeking advice about ex-gratia payments to meet the effect of devaluation on existing firm price contracts are being recommended to consider payments only towards losses on the contract as a whole which are due to devaluation. These losses can only be assessed when the contract is completed. While my right hon. Friend recognises the importance of import substitution, it would be difficult to establish retrospectively how far and at what cost it would have been possible. In many cases the effect would have been to increase the total cost and therefore the size of any ex-gratia payment.