§ Mr. Ioan Evansasked the Secretary of State for Prices and Consumer Protection whether she will make a statement about the future of the voluntary agreement between her Department and the retail trade concerning the prices of items of particular significance in the household budget.
§ Mrs. Shirley WilliamsThe voluntary agreement sought to hold down prices of food and other items which are of particular significance in the household budgets of those with low incomes. It did so by building on existing trade practices such as lower than average margins on frequently purchased items and special promotions. The circumstances which determined the precise form of the agreement when it was negotiated last year no longer obtain. In particular, the effect of the 10 per cent. cut in gross margins has been largely eroded by the increase in retailing expenses. However, although the agreement has run its term the Retail Consortium, the Retail Food Confederation and the voluntary groups which are members of the CBI has agreed to recommend to their members that, during the period in which the possibility of restraining increases in the prices of essential products is under discussion between the Government, manufacturers and the distributive trade, they should continue the trade practices and pricing policies on which the agreement was built, with the objective of helping to hold down the prices of basic household budget items.