§ Mr. Tierney
asked the Secretary of State for Prices and Consumer Protection (1) if he will take steps to assist retailers to reduce prices wherever possible by ensuring that manufacturers and distributors pass on all possible price reductions;
(2) if he will take steps, as the prices of basic foodstuffs and raw materials are reduced, to ensure that prices are not stabilised at their present level but that the benefits are passed on to retailers and consumers.
§ Mr. Maclennan
The Price Commission was asked in 1975 to study the effect on manufacturers' and retailers' prices when the cost of raw materials fell between 1974 and 1975. The report, published in July 1976, found that, in general, manufacturers' profit margins were eroded over this period. It found no evidence that manufacturers failed to pass 15W on the benefit of reductions in the cost of materials in order to increase their margins, but that reductions in the cost of raw materials were often offset by rises in other costs, and therefore moderated increases in retail prices rather than causing actual reductions. Now that many commodity prices have fallen once more, my right hon. Friend is determined to see that the benefit is properly reflected in retail prices, and is ready to use his statutory powers if necessary.