Utility Goods (Prices)

Part of the debate – in the House of Commons at 12:00 am on 3rd November 1949.

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Photo of Mr John Boyd-Carpenter Mr John Boyd-Carpenter , Kingston upon Thames 12:00 am, 3rd November 1949

I beg to move, That an humble Address be presented to His Majesty, praying that the Order, dated 25th August, 1949, entitled the Utility Footwear (Maximum Prices) (No. 2) Order, 1949 S.I., 1949, No. 1608), a copy of which was laid before this House on 27th August, be annulled. The subject of these orders was first raised in this House in a statement which the President of the Board of Trade made shortly before the House rose for the Summer Recess on 28th July, 1949. It was a longish statement, beginning at Column 2,690 of the OFFICIAL REPORT. The right hon. Gentleman there indicated his intention to make a number of orders, of which the two with which the House is now concerned are only, I think, a fairly small proportion, reducing among other things the margins to which, under his price-fixing orders, retailers were to be entitled on the sale of certain categories of utility goods. The principal part of his statement which is in my view, wholly relevant to the issue now before the House, occurs at Column 2691 of the OFFICIAL REPORT. He there describes, if I may say so completely accurately, the effect of these orders: The changes will mean lower gross margins for these utility goods than has hitherto been allowed, and will probably necessitate a reduction in costs which may take the form of smaller staffs and curtailment of services to the public. We were told that the orders giving effect to these changes would come into force early in September. Then, and I ask the House to mark these words, the right hon. Gentleman said: I have been unable to consult the trade associations concerned as has been usual before substantial changes were made in controlled prices."—[OFFICIAL REPORT, 28th July, 1949; Vol. 467, c. 2691.] Two days later, the House adjourned for the Summer Recess, and the right hon. Gentleman departed on, I have no doubt, a well-earned holiday in, I believe, the South of France.

There was naturally some reaction in the trades concerned, and in his absence, the right hon. Gentleman's unfortunate Parliamentary Secretary had to deal with the matter. When he returned, he had some discussions with, at any rate, some of the trade organisations concerned; but it is abundantly clear that he did not satisfy them as to the merits of these proposals or of their justice. On 20th October, shortly after the House resumed, I asked the right hon. Gentleman a Question on the subject of these discussions, which is reported at Column 737 of HANSARD for that date.

The particular point with which I would trouble the House is a supplementary question, in which I asked the right hon. Gentleman if he had succeeded in satisfying the people with whom he had the discussions that he was treating them justly. The right hon. Gentleman replied: If the hon. Member who I noticed engaged himself in some activities on this subject during August, is asking me whether I received full agreement from all the interests concerned in the discussions, the answer is, of course, 'No, Sir.' If I had had to wait until I got agreements we should not have got these reductions probably for two or three years."—[OFFICIAL REPORT, 26th October, 1949; Vol. 468, c. 738.] That, I think, is a rather ungracious comment for the right hon. Gentleman to have made about trade organisations with which his department had been in consultation on a number of previous price changes.

I pressed him farther and said I had not asked if he had obtained agreement—a fact which was well within the knowledge of every Member of the House—but whether he had satisfied the people with whom he had had discussions that he had treated them justly. He gave no answer, but the answer so far as some of those people are concerned was given last month at Cardiff when three resolutions were passed and sent to the Prime Minister by the National Chamber of Trade. The first referred to the arbitrary manner in which the President of the Board of Trade had treated the traders concerned, and the third asked that he should be removed from his appointment. When a section of the community—and whether it is right or wrong is no matter—has a sense of rankling injustice, it is right and proper that hon. Members should discuss the matter in this House. From the point of view of the people concerned, this matter should be raised, apart from the fact that it also gives the opportunity for the right hon. Gentleman to put his side of the case.

I want to deal with two points; first, the method, and, secondly, the substance of these price reductions. As to the first, the right hon. Gentleman, in his original statement to the House, said it was impossible to discuss the matter with any of the bodies concerned. In previous cases discussions have taken place, and no one knows better than the right hon. Gentleman that in the highly complicated circumstances of the business of retail distribution injustice is imposed unless one first goes into the facts with the people intimately concerned. That is what the right hon. Gentleman and his predecessors previously did. The right hon. Gentleman has not yet told us what the urgency was which made the normal procedure inapplicable in this instance.

We are here talking of the end of July, at which time His Majesty's Government had not made up their minds to devalue the pound. What, therefore, was the urgency of the matter? The only circumstance which might have given a little urgency was the fact that the Trades Union Congress was meeting in the middle of September and it was desired to strengthen the hand of the Prime Minister in his not very successful appeal to them. I do not know, but perhaps the right hon. Gentleman will tell us, what the urgency was which prevented the right hon. Gentleman having the normal discussions.

I am sure that he will appreciate that, particularly where he is going to inflict substantial hardship on a section of the community, it is all the more important that their minds should be properly prepared by proper discussion in advance, so that they could not only be certain that what the right hon. Gentleman was doing was a serious attempt to deal with a serious problem, and that it was not the arbitrary act of an ignorant Department. That is how the matter will strike people if there are not preliminary consultations. I am not saying whether this is a right or wrong impression, but I am saying it is an inevitable impression.

The object of these orders—the reduction of the retail profit margin—is an admirable one, to which hon. Gentlemen opposite pay lip service with great frequency. The object is, of course, the reduction of the cost of living, and in view of the way in which it has risen in recent years it is obvious that, even belatedly, the right hon. Gentleman should apply his mind to it. The question is whether, in pursuing this admittedly laudable idea, the right hon. Gentleman has taken a wise or equitable course. The consequence, the deliberate consequence, of this action is to reduce the earnings of the retailers. We are dealing here with the retailer who deals in utility goods, and, therefore, it is a reduction in the earnings of the small retailer a large proportion of whose turnover consists in utility goods.

I am not suggesting that these orders will give the slightest discomfort to the large scale multiple stores such as Harrods or Fortnum and Mason's. The people it affects are the substantial number of small retailers in the poorer areas, who rely for the greater part of their earnings on the sale of utility goods. The object of the orders is to reduce the earnings of these people. It reduces the price, but in order to do so there is a reduction in the earnings on which those people live.

That is a marked differentiation in the treatment of a section of the community by His Majesty's Government compared with the rest of the community. As I understand it, the policy of the Government is to freeze incomes and to hold money wages at their present level. That is their declared policy as regards the rest of the community, but with respect to this section, the right hon. Gentleman, by a deliberate act, inflicts a reduction of income. It seems on the face of it, and I think he will agree it seems to the people concerned, to be unjust to discriminate in this way and to impose this selective reduction on this one section of the community.

These small shopkeepers have to share in the inevitable hardship caused by the general rise in the cost of living. On top of it they are to have inflicted upon them a reduction in their income. The right hon. Gentleman in his statement suggested that they should deal with the matter, in part, by a reduction of staffs. It is interesting to see that the right hon. Gentleman is suggesting the creation of a certain degree of unemployment, which I did not know was his declared policy. That suggestion is clearly made because nobody knows better than he does that the non-mobility of labour because of the housing shortage will make it difficult for the persons rendered redundant to find other employment within reach of their homes. The position might be different if housing were tackled in other areas, but the right hon. Gentleman knows perfectly well the brake that absence of housing imposes upon the otherwise highly-desirable mobility of labour.