§ Mr. Norman Lamont
asked the Secretary of State for Prices and Consumer Protection if he will list the powers that he or the Price Commission have, specifying the sections of existing legislation, to order firms to reduce prices because they have awarded wage claims in excess of the Government's norm.
§ Mr. Hattersley
Neither the Price Commission nor I have the power to restrict prices simply on the ground that a firm has reached a pay settlement above the Government's pay guidelines. However, in exercising our respective functions under the Price Commission Act 1977, both the Commission and I must have regard to the full range of matters referred to in section 2 of the Act. These include the desirability of encouraging reductions in costs by improvements in the use of resources and of securing reductions in prices of goods and charges for services in consequence of such improvements. Increases in labour costs must clearly be taken into account.