Is not the right hon. and learned Gentleman aware that the Co-op utility prices are practically the same for quality as those manufactured by private traders and, since the Co-op make no profits, is it fair to assume that high prices do not result in excessive profits?
Allowing for the inaccuracy in the Question—there is no such thing as "the Co-operative Society "; there are, in fact, 1,400—does my right hon. and learned Friend agree that he had on his desk yesterday morning a letter written on behalf of the whole Co-operative movement bitterly protesting against the recent action taken by his Department in allowing maximum prices to be lifted on utility goods against the will of the whole of the organised collective Co-operative movement?
Whilst thanking the President of the Board of Trade for that fair answer, may I ask him if it is not a fact that utility prices could have been lower if the Government monopoly in wool had not made a profit of £13,500,000 in the last 12 months and the Government monopoly in cotton had not made a profit of £9,500,000 in the previous 18 months?
Could my right hon. and learned Friend enlighten the House by telling us why it is necessary for rayon clothing prices to go up and up, while Courtauld's rayon profits increased in 1950 over those of 1949 by no less than £94¼ million? Is it not a fact that if the prices are creeping up the profits of manufacturers and retailers are creeping up as well?
No, Sir. It is not a fact. We shall have an opportunity of discussing the matter later, in the course of the day's proceedings. Large profits may well be made by firms, such as those which have been mentioned, out of their trade in goods which are not subject to price control, particularly exports. It is our desire that proper profits should be made by firms exporting goods to foreign countries. We seek, in turn, to obtain a proper proportion of profits so earned by appropriate taxation.
I can only say that as far as price control on utility goods in the Board of Trade field is concerned, while we have certain proposals for tightening up the system of price control, I do not think it would be fair to say that excessive profits have been made in that field.
Is not a great deal of this increase in prices of utility goods due to the increased maximum margins allowed by the Board of Trade since last March, which maximum margins, on the evidence of people employed in a big way in the distributive industries, are, in many instances, becoming minimum prices?
In view of the replies to supplementaries given by my right hon. and learned Friend, and in view of the desirability that he should be informed of what is happening in the Department, how, if his answers are accurate, does he account for the fact that there is circulating in his Department a memorandum which points out that certain Lancashire textile firms manufacturing utility and non-utility cloth are producing non-utility cloth of inferior quality and making a far greater profit on the cloth of inferior quality than the utility cloth they are producing?
That may well be so; I have no control over the former cloths and it is the policy of the Government to build up the export trade of this country as high as it can be built up. I hope that the commodities are of the highest quality. It is not our policy to control profits on exports in that way although, as I have said, we get back an appropriate proportion of the profits by not insignificant taxation.
While agreeing, of course, with the necessity for and desirability of maintaining our export trade and, indeed, increasing it, may I ask whether it would not be wise, when requests are made to raise utility prices, to have regard to the profits that are being obtained in other fields?
Unless we were to introduce an elaborate system of production control, and unless we were to allow manufacturers some profit on their utility production— and we allow them only what we believe to be a fair and reasonable profit—we would get no production in the utility field. We must have regard to the actual costings of utility production. We allow what we consider to be a fair and reasonable profit in order to ensure that utility production continues.
Has my right hon. and learned Friend seen in the last month prospectuses of two Lancashire textile firms which have shown increases of profits, in the one case from £35,000 in 1936 to £350,000 last year, and in the other case from between £40,000 and £50,000 in 1939 to over £500,000 last year? Does my right hon. and learned Friend think that those are fair profits?
With respect to my hon. Friend, what he has failed to realise is that our wool and cotton textile industry is one of our principal exporting industries to dollar countries. Its exports are something of the order of £30 million in a half year. That is a very important consideration. It may well be that profits have been made out of that trade. We tax them if they are excessive.