Prices

HC Deb 22 October 1979 vol 972 cc47-8W

Mr. Kilroy-Silk

asked the Secretary of State for Trade what steps he proposes to take to reduce prices.

Mrs. Sally Oppenheim

We shall ensure price restraint by adhering to firm economic and monetary policies and by promoting competition. The Government are progressively reducing the rate of growth of the money supply and the Competition Bill, which the House will debate tomorrow, will promote the cause of fair and vigorous competition.

42. Mr. Torney

asked the Secretary of State for Trade what has been the effect on retail and wholesale prices of the increase in oil and petrol prices.

Mrs. Sally Oppenheim

An increase in world oil prices affects British retail prices in three ways. First, it raises the retail price of oil products in Britain. Secondly, it raises industry's costs of manufacture and distribution, and thus raises the retail prices of all goods and services. Thirdly, it tends to raise the exchange rate for the pound because it hits other industrialised countries harder. The two latter effects are impossible to quantify precisely, and work in opposite directions. No firm estimate can therefore be given of the overall effect.