Price Stabilisation (Coal Price Increase).

Oral Answers to Questions — National Finance. – in the House of Commons on 7th July 1942.

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Photo of Mr Alfred Edwards Mr Alfred Edwards , Middlesbrough East

asked the Chancellor of the Exchequer whether he is aware that the increase in the cost of coal to steelmakers will raise the price of steel by 7s. 6d. per ton and cause a new spiral in all costs of armaments and the cost of living, which will in the end be paid by the Government; and whether he will consider covering the initial increase by a subsidy and thereby stabilise prices with a resultant saving to the Exchequer?

Photo of Mr John Tinker Mr John Tinker , Leigh

asked the Chancellor of the Exchequer what steps he proposes to take to prevent the recent 3s. per ton rise in the price of coal increasing the cost of living and so upsetting the policy laid down in the White Paper on Price Stabilisation?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

As to the bearing of the increase in coal prices on the Government's stabilisation policy, I would refer my hon. Friends to the reply which I gave to the hon. Member for Moseley (Sir P. Hannon) on 2nd July. As regards steel prices, the effect on steel costs of the increase in the price of coal, and the question how it should be dealt with, must be discussed with the industry, in order that we may decide on the necessary measures. The Government considered but rejected the expedient of a direct subsidy to the coal industry to meet the increase of miners' wages.

Photo of Mr Alfred Barnes Mr Alfred Barnes , East Ham South

Does that reference deal with increases in the cost of gas and electricity?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

My original answer dealt with all these matters, and I will send a copy of it to my hon. Friend.

Photo of Sir Herbert Butcher Sir Herbert Butcher , Holland with Boston

Would not an allowance towards the cost of carriage avoid an increase in prices?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

This matter was very carefully considered.

Photo of Mr Alfred Barnes Mr Alfred Barnes , East Ham South

Is this cost to be passed on?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

It will be a matter which will have to be examined first by the industries in question.

Photo of Mr Emanuel Shinwell Mr Emanuel Shinwell , Seaham

If it is examined by the industries in question—the gas and electricity undertakings—and they discover that the increase in the price of coal leads to increased costs, as no doubt it will, will they be permitted, without Government control and direction, to increase gas and electricity charges?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

No, Sir, only after the consent of the Government and after examination.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and Eastern

Will the Chancellor seriously consider the original Question, because, if the price of steel and other products rises as a result of the increase in costs for primary products, the extra work in costing and re-pricing will dislocate all the work done by Government Departments up to the present?

Photo of Sir Kingsley Wood Sir Kingsley Wood , Woolwich West

No, Sir. I do not think that is so, although there may be a certain measure of what my hon. Friend indicates, but this matter was very carefully considered by the Government as a whole when I announced my decision.