Utility Clothing and Footwear (Prices)

Oral Answers to Questions — Trade and Commerce – in the House of Commons at 12:00 am on 26th July 1951.

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Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough 12:00 am, 26th July 1951

asked the President of the Board of Trade how far the prices charged for utility clothing and footwear produced by the Co-operative Society differ from those charged for similar articles produced by private companies.

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

I am afraid that I have no information on this subject.

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

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?

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

No, Sir. I am not prepared to accept either the facts or the assumptions in the hon. Member's statement without further consideration.

Photo of Mrs Jean Mann Mrs Jean Mann , Coatbridge and Airdrie

Is it not the case that almost every Co-operative Society gives a dividend of 2s. in the £ and does that not represent at least 10 per cent. difference in the prices between Co-ops and private enterprise?

Photo of Mr Herbert Williams Mr Herbert Williams , Croydon East

Is it not true that all the Co-ops have been cutting the "divi" recently, under pressure from the Board of Trade?

Photo of Mr Will Nally Mr Will Nally , Bilston

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?

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

I can only say that to the best of my recollection no such letter was on my desk yesterday afternoon.

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

asked the President of the Board of Trade what proportion of the increase on utility clothing and footwear prices is due to increased profits.

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

In allowing increases in maximum prices for utility goods, no provision is normally made for any increase in profit margins.

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

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?

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

I have no doubt that utility prices could have been lower if no one had made any profit at all, including the manufacturers of utility goods.

Photo of Major Lyall Wilkes Major Lyall Wilkes , Newcastle upon Tyne Central

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?

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

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.

Photo of Mr Cyril Osborne Mr Cyril Osborne , Louth Borough

Would not the President of the Board of Trade agree, in fairness to Courtauld's, that the profit they have shown recently is partly due to the new spinning company which has been in existence for nearly 10 years, but only paid a dividend last year?

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

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.

Photo of Mr Robert Hudson Mr Robert Hudson , Southport

Will the right hon. and learned Gentleman take steps to see that his reply to the last supplementary question but one gets due prominence at the Labour Party Conference?

Photo of Mr Charles Gibson Mr Charles Gibson , Wandsworth Clapham

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?

Photo of Mr Will Nally Mr Will Nally , Bilston

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?

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

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.

Photo of Major Lyall Wilkes Major Lyall Wilkes , Newcastle upon Tyne Central

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?

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

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.

Photo of Mr Dryden Brook Mr Dryden Brook , Halifax

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?

Photo of Mr Hartley Shawcross Mr Hartley Shawcross , St Helens

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.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

But the consumer pays.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Kidderminster

Save that for Scarborough.

Several Hon. Members:

rose

Photo of Mr Douglas Clifton Brown Mr Douglas Clifton Brown , Hexham

I hope that we shall get through one or two more Questions before Question time finishes.