The latest report was published on 22nd January and covered the three months September to November 1975. The hon. Member will be happy to know that the report concludes that there is now ample evidence that the rate of inflation is slowing down.
Has the Minister noted from the report that profit margins in major industries such as engineering, motor vehicles, chemicals, textiles, print and paper are down to 37 per cent. of the Government's ceiling? What action are the Government taking to assist the profitability of these industries, in the interests of new investment and more jobs?
I have noted that profit margins are standing at a lower level than at any time since price control was introduced. A year ago the Government announced an important investment relief, and the Price Commission's latest quarterly report indicates that the take-up of this relief has increased considerably and now amounts to £1,806 million, thus permitting an increase in prices and profits of £348 million, as a contribution towards financing investment.
The whole question of the future of the Price Commission is under consideration, along with the question how the counter-inflationary policy should be developed beyond the current phase. I also noted that this morning the Financial Times survey of business news attributed the decline in profits to the current recession and the difficulties in the market situation.
Just in case there is any Government thinking in relation to the control of wages, will my hon. Friend indicate to his hon. and right hon. Friends that it will not be "on" with my hon. Friends?
The Government's view is that the current policy on prices and wages is working exceedingly well. It will be upon the success of that policy that we shall build.
The Under-Secretary of State is extremely sanguine about prices. Is he aware that a couple of weeks ago the Grocer index showed a record year-on-year increase in grocery prices and a record weekly increase in 713 items? Will the Minister have the honesty to tell the House that, despite any dreams of hocus-pocus price restraints that his Department may have, he has no scope to do anything whatsoever about these prices, because of the extent to which profit margins have been eroded in the retail food trade, partly because of the Price Code and partly because of a pay settlement, within the Government's limits, which amounted to 20 per cent.?
The hon. Lady accuses me of being sanguine—and, I take it, over-sanguine. The facts are clear. There has been a decline in the rate of inflation in the price of food, excluding seasonal foods, in each of the last six months. That must be set beside any reports from unofficial sources that she cares to bring before us. As to the hon. Lady's strictures about lack of scope for the effective restraint of prices, the food and drink industry has proved co-operative in its contribution to the selective price restraint scheme. We recognise that this was not easy for the industry. None the less, its contribution is substantial and real.