§ Mr. Cartwrightasked the Secretary of State for Prices and Consumer Protection what progress has been made with the Price Commission's inquiry into the coal trade; and whether she will make a statement.
§ Mr. MaclennanThe Price Commission's report on the distribution of coal and solid smokeless fuels for domestic consumption was published yesterday and copies have been placed244W in the Library. The report brings out the extent to which prices of similar types and quality of fuel can vary between different regions, within regions, seasonally, and between different retailers, and makes certain recommendations aimed at benefiting consumers.
I welcome the report. It will, I hope, stimulate competition in retail coal distribution and encourage discrimination in the purchase of fuel. I understand that some consumers may still be under the misapprehension that they are tied to a single coal merchant, as in the days of rationing and registration, and that retail prices are controlled. I am glad of the opportunity to say that these are misapprehensions and should be dispelled by the Commission's report. Coal merchants, like other distributors, are subject to the general Price Code restraints on net and gross profit margins, but within these limits there is plenty of scope for healthy competition on price and quality of service.
The Price Commission makes five specific recommendations.
First, it recommends that prices of domestic solid fuels should continue to be monitored over the next few months, to assess the effect at retail level of recent changes in NCB prices and rail freight charges. I have asked the Commission to undertake this monitoring and to keep me informed of the results.
Secondly, it recommends that fuller consumer information about domestic solid fuel prices should be made available. Local authorities which undertake food price surveys with the aid of Government grants are being invited to consider whether they might vary these occasionally by surveying prices quoted by local merchants for coal and solid fuel. The Price Commission's conclusions will be brought to the attention of local consumer groups through my Department's Consumer Information Bulletin, and the Domestic Coal Consumers' Council, whose help the report invites, will have an opportunity to advise me on whether there is further action that could appropriately be taken to disseminate price information.
Thirdly, the Commission draws the attention of the trade to the wide variation of profits between different traders, and invites them to consider what might 245W best be done to narrow this range. Within the general limits imposed by the Price Code, I consider that further pressure to restrain profits and prices can best be achieved by stimulating competition in the trade. To this end, action following the Commission's other recommendations should make an important contribution.
The Price Commission's fourth recommendation relates to the National Coal Board's contracting system for domestic coal and for smokeless fuels, and recommends that any such system should be designed with regard to the needs of consumers and the effect on prices.
The NCB system is for first buyers to make contractual arrangements for specific quantities of various types of fuel. The system has been revised since the Price Commission completed its study. It will be reviewed in April, in the light of experience through the winter season.
The National Coal Board considers that its contractual arrangements are necessary for orderly marketing and should not be disadvantageous to domestic consumers in terms of price nor should they inhibit competition between coal merchants. The Board is conscious of the need to adjust contracted quantities to changing requirements, and there are formal and informal arrangements to secure this. There is no reason why a consumer should have difficulty in obtaining supplies from the merchant of his choice, except in cases where a fuel is in short supply nationally.
I am inviting the Domestic Coal Consumers' Council to consider the operation of the scheme in its revised form in the light of the Price Commission's recommendations, and to let me have its views. My right hon. Friend the Secretary of State for Energy is similarly requesting the National Coal Board to report to him on the operation of the scheme following the review.
Finally, the Price Commission draws attention to indications of a degree of price uniformity in certain areas that suggests that prices are effectively, if sometimes only informally, agreed. It recommends that any such arrangements should be discontinued. I am advised that the Price Commission has drawn the attention of all the traders who participated in its inquiry to the relevance of the restrictive practices legislation. Members of the public with evidence to suggest the exist 246W ence of a registrable agreement should bring it to the attention of the Office of Fair Trading.