HC Deb 07 July 1977 vol 934 cc589-90W
Mr. Ioan Evans

asked the Secretary of State for Prices and Consumer Protection when the report of the Price Commission on recommended retail prices will be published.

Mr. Maclennan

This report is being published today. Copies are being placed in the Library of each House.

In the terms of reference which my right hon. Friend gave to the Commission in September last year he asked for an examination of the practice and not for the Commission's recommendations. The Commission's study is essentially one of statistical fact.

Meanwhile in Clause 12 of the Price Commission Bill we have proposed provisions prohibiting certain practices relating to the recommendation of prices where that would be appropriate in consequence of a report made by the Commission under Clause 11.

The Commission collected over 6,000 observations of prices for 87 selected products and covered the whole range of different types of outlet throughout the country. It found that there are three distinct types of case.

The first is where the prices actually charged are close to the recommended retail price. On this the Commission observes that the recommended retail price has inherited the rôle of the former resale price maintenance. The second case is where prices in the shops bear little resembance to the recommended retail price. In these cases the Commission suggests that one factor in the persistence of recommended retail prices may be their use in double pricing. In the third case some prices charged are the recommended retail price, but many others are not linked to it. This is usually related to types of outlet.

I propose to pursue discussion of the report and of the practice of recommending prices with a number of organisations which are concerned with this question. This includes the manufacturers of small electrical appliances, whom we last year called on to abandon the practice of recommending prices and whose response so far has been disappointing.

Otherwise we will use the Price Commission's report as a guide to situations which the new Price Commission might be directed to examine under the powers in the Price Commission Bill.

A related report is also being published today concerning sanitary protection articles. Following a Price Commission recommendation in an earlier report the manufacturers who recommended retail prices agreed to stop doing so. The report examines the effect on prices of that change, and the Commission believes that it may have added impetus to the trend towards increased competition in this field.