Orders of the Day — Prices and Incomes (No. 2) Bill

Part of the debate – in the House of Commons at 12:00 am on 10 July 1967.

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Photo of Mr Terence Higgins Mr Terence Higgins , Worthing 12:00, 10 July 1967

Not at all. As the hon. and learned Member well knows, it depends also on the standard of efficiency in the industry and the arrangements which are made for raising capital.

My hon. Friend the Member for St. Ives (Mr. Nott), who admirably proposed the Amendment, certainly did not, as the Chancellor of the Duchy of Lancaster suggested, congratulate the Government on the way that they control prices. On the contrary, he condemned them out of hand. It is only one or two gullible individuals on the back benches opposite who can believe that they were right to vote for this policy last year because the Government would succeed in controlling prices as well as incomes and would continue to do so this year. The time span over which we must judge their performance in controlling the general level of prices is not merely from the date of last July's heavy deflationary measures to this July, but the two-year period extending to next July.

The hon. Member for Willesden, West (Mr. Pavitt) said that because there was mass advertising, and manufacturers were trying to persuade people to buy one thing or another, we should not accept the Amendment. That mass advertising in no way reflects directly on the retail margin. Indeed, some retailers seek to offset it by introducing own label brands, and so on. The hon. Gentleman was off the point there.

What was much more to the point was the brilliant speech of my hon. Friend the Member for Ormskirk (Sir D. Glover) who spoke with great experience and who stressed that, in allowing for individual retail price changes, allowance must be made for the fact that the price of some items will be decreased by the forces of the market and the retailer will make a loss and that in other cases it will be necessary for the retailer to increase the price so as to make a profit on a particular item when the demand for that item has increased.

That brings me to the heart of the matter. I well recall, I think at the 1959 General Election, speaking at a street corner opposite the right hon. Member for Battersea, North (Mr. Jay). I spoke in Battersea Market. I got a question from the audience in the market asking me, "Why do you not control the price of goods sold at this market at the weekends?".

This brings us to the heart of the problem. If an attempt is made to control individual retail prices, one is inevitably forced either into the position of rationing, because it will be found that more people will want to buy at the lower controlled price—the price below the competitive level—than there are goods to supply them with, or there is the problem of a black market.

If the Government seek to control retail prices at a level which they regard as fair, as against one which is competitive, this is the kind of position which will inevitably arise. In view of the White Paper, I cannot believe that they would be so stupid as that. On the other hand, we need to know very clearly what the Government's proposals are here. I hope that we shall have a reply from the First Secretary.

I turn now to the question of what will happen about retail prices. Are we to understand that these are now to be included in the voluntary notification scheme? If so, this raises some administrative difficulties of enormous magnitude. Or are we to understand that retailers do not have to volunteer and notify increases hut, instead, Government snoopers will go round and pick on individual retailers, who will then be referred to the Prices and Incomes Board—in other words, "You need not volunteer under this part of the system, but our inspectors will go round chasing you up"?