Proposals to Investigate Price Increases

Clause 4 – in the House of Commons at 12:00 am on 21st June 1977.

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8.30 a.m.

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

I beg to move Amendment No. 84, in page 5, line 18, after 'Act', insert 'and after consulting with the person by whom the notice was so given and with any Government department appearing to the Commission to have a general duty of supervision over the industry concerned'.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

With this it will be convenient to discuss Government Amendment No. 24 and Amendment No. 16, in page 5, line 20, at end insert—

'Provided that if, after any such consultations as aforesaid, it appears to the Commission that the circumstances mentioned in subsection (5)(b) of this section prevail or would prevail if they gave such a notification, the notification shall not be made.'

Photo of Mr Cecil Parkinson Mr Cecil Parkinson , Hertfordshire South

The Commission activities are triggered off in two separate ways. Large companies in category 1 have to notify the Commission of their intention to raise a price and any investigation takes place under Clause 4. Smaller companies are subject to an identical procedure under Clause 5. We sought to introduce a safeguard to both clauses in Committee—that, before making a final recommendation, the Commission should consult the company which would be the subject of any investigation and the sponsoring Department of that industry. That might lead the Commission to the view that an investigation was unnecessary and save the taxpayer and the company substantial sums. We were successful in amending Clause 5 but not Clause 4, so the Bill is now inconsistent. There have to be consultations under Clause 5 procedure, but not under Clause 4.

Under the banner headline "Total Victory for the Union", the May edition of "The Licensee", the monthly newspaper of the National Union of Licensed Victuallers, described how after discussions, the Secretary of State decided that an inquiry he was planning would not be right and had amended its terms of reference. He found consultations useful. That would be a sensible thing for the Price Commission to do before making an irrevocable decision. The company might then be able to offer a satisfactory explanation.

There is a wealth of information about various industries in the sponsoring Departments. Therefore, it would seem sensible for the Price Commission to discuss with sponsoring Departments whether they could help in arriving at decisions.

I stress that once an investigation has been undertaken, it will be expensive for both the taxpayer and the company. Considerable work would have to be undertaken by the Commission on the books of the company and great expense would be incurred. We argue that, before making the irrevocable decision to incur that expenditure, in the interests of the taxpayer and the company the two consultations which I have outlined should take place.

We were successful in putting that procedure into Clause 5, but unsuccessful in putting it into Clause 4. The Government, showing an obduracy which was absent in a welcome fashion in the previous debate, said "We shall not listen to the Committee. We shall have our way. We shall reject the amendment which was made to Clause 5. In that way we shall produce consistency in the Bill.

We say that is not the right way to approach this matter. We suggest that our proposal is sensible, and we urge the Government to bring Clause 4 into line with Clause 5. Our amendments would effectively bring that element of consistency into the Bill.

Amendment No. 16 introduces a further sensible safeguard. What is the point of having an investigation into a proposed price rise if it is accepted that the company concerned will be below the profit safeguard level built into the Bill in the first place? Why waste public and company money on an investigation when the end result is acknowledged to be that the company will still be below the safeguard level? The whole investigation will prove to have been absolutely pointless.

In Committee the Minister accepted much of the argument on Amendment No. 16. He said that there could be exceptional cases where there would be no real need for an investigation to establish whether the proposed price rise was fair, but that it might reassure the public. The hon. Gentleman quoted coffee as an example. He said that if coffee prices were to go through the roof, then, although a company was being absolutely fair, it might reassure the public to have this investigation, despite the fact that at the end of the day the company would be below the safeguard level built into the Bill and that the price rise would go through.

We think that there are other, rather less expensive, ways of reassuring the public about those unusual situations. We do not think that the legislation should be drawn to cover those few extreme examples. It is nonsense for the Government, if they have not got the machinery to persuade people that coffee prices are to go up in a spectacular fashion, to institute an expensive investigation to tell people what they already know or could be told in a less expensive way.

We suggest that the Minister can demonstrate that the spirit of amity, about which we talked earlier, was not a temporary, transient thing. Here is a chance for the Government to say "Frankly, these three amendments would bring consistency into the Bill, they would in no way undermine it and they could very well save public and company money. Therefore, with the benefit of hindsight, we have decided that we were wrong to resist them in the first place and we now accept them." If the Minister were to say that, he would enhance his reputation as the reasonable member of the Prices and Consumer Protection Department's Front Bench team. I hope that he will do just that.

Photo of Mr Tim Smith Mr Tim Smith , Ashfield

It was with some regret that I was unable to speak in the last debate on Amendments Nos. 10 and12 because I had hoped to say something about the importance of employment in the context of the Bill. I had also hoped to congratulate my hon. Friend the Member for Hove (Mr. Sainsbury), who made a fine contribution to the debate. He referred to bacon and butter, both of which are important.

His speech led me to reflect on the remarks of the hon. Member for Colne Valley (Mr. Wainwright) who referred to a harvest festival by the Liberal Party, to celebrate the Lib-Lab pact, at which they will produce the fruits of the pact. I wonder whether they will include bacon and butter. I suspect that all that will be produced is 300 Labour cabbages and 13 Liberal lemons.

Photo of Mr Clement Freud Mr Clement Freud , Isle of Ely

It is absolute nonsense to refer in that context to what my hon. Friend the Member for Colne Valley (Mr. Wainwright) and I said about a harvest festival. My hon. Friend was speaking in another context about another part of the Bill. It seems unnecessarily pointless and rude at this time in the morning to make untrue remarks about my colleague.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

I should prefer to hear the Nunc DimittisNow lettest thou thy servant depart in peace". Let us return to the amendment under discussion.

Photo of Mr Tim Smith Mr Tim Smith , Ashfield

The amendment would impose upon the Price Commission mandatory obligation to consult before instigating an investigation into a price increase. The distinction between the Government and the Opposition is that we would introduce a mandatory obligation to consult the company, or enterprise concerned. Such a company would be either a category 1 enterprise, which would have pre-notified its price increase, or a category 2 enterprise, which would have notified the price increase subsequent to the raising of the price. It is important that the company should be consulted to ensure that there are no potentially damaging investigations and no misunderstandings at that stage. It is also important to ensure that there is a saving of taxpayers' money, if that can be achieved.

The Price Commission has been an expensive body to operate. I recall that when I worked as a professional accountant for an international firm in the City at the time that the Price Commission was established, one set of staff was hived off to the Government Department and another to the Price Commission. One lot of employers were advising the Government and another the Commission. It is important to save money where we can. The amendment will help to do that.

Money will also be saved by Amendment No. 16 because the same applies—more strongly if anything. It would be a complete waste of time to have any notification if the Commission could say at the time that the enterprise involved had not exceeeded its price levels.

8.45 a.m.

As I understand it, the Government have advanced only one argument in favour of the Bill as it stands. I know that the example of coffee was referred to in Committee. It seems to me that that is a particularly bad example if it is to be the best example that the Government produce of the argument that says that if there is a very large price increase there is a justification for doing all this work and the publicity involved. It is a bad example because most people know why the price of coffee has risen. It has nothing to do with the Government. As far as I can tell, no one has suggested that it has. It is to do with the very poor crop of coffee in Brazil and the shortage of coffee, so the price has risen. People understand that, and I do not think that they necessarily believe that there has been any profiteering in coffee.

For example, during the recent election campaign in which I took part, I produced figures for a food shopping basket and I valued it at February 1974 prices and then at April 1977 prices. But I was not quite so silly as to include coffee, because I knew that people would know that coffee was an exceptional item. People know very well why the price of coffee has risen. If that is the best example that the Government can produce in support of the Bill as it stands, they have not made their case. I hope that they will accept the amendments.

Photo of Sir David Price Sir David Price , Eastleigh

I want to take up one aspect of the amendment that has not yet been touched upon. The phrase used by my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson) was any Government department appearing to the Commission to have a general duty of supervision over the industry concerned". I know that in theory the older of us were brought up under the old-fashioned idea of the collective responsibility of Government. That went not only to the Cabinet but throughout the Departments. Indeed, a very distinguished senior civil servant once put to me the phrase the seamless robe of the Government Departments". A lot has happened since then, not least that Government Departments have become rather larger. However, the Price Commission is not a Government Department in the ordinary sense of the term. Indeed, I suspect that the Government have been deploying the argument of the late Mr. Herbert Morrison over nationalised industries in relation to the Price Commission—namely, that it would be wrong for Ministers to interfere in detail and that they should not take personal or collective responsibility for the detailed work of the Commission, although obviously they would have overall supervision. I think that that would be a fair interpretation.

Therefore, it becomes important that the Commission should have a duty placed on it to consult sponsoring Departments. The degree to which a sponsoring Department matters to the industry concerned varies enormously. 1 think that we all have experiences of industries and Departments where the relationship is very close and on a permanent basis, whereas with others, in normal circumstances, the relationship is distant. It also depends very much on the history of the industry and on how much in the past it has been Government controlled, and the like.

I therefore suggest to the Minister that it is important that this should be written into the Bill. I give the example, to illustrate my point, of his own Department. It is within the knowledge of the House that there is a certain boundary dispute, as it were, between his Department and the Ministry of Agriculture, Fisheries and Food, on the precise responsibilities over the food industry. Traditionally, the MAFF is a sponsoring Department for the food industry. Here I declare a very marginal interest in that one or two of the firms that I advise as a management consultant are in the food industry. I make no political point or criticism of the Departments. I am merely observing the fact.

The example there, of course, was that the right hon. Gentleman's Ministry had responsibility for prices and consumer protection and obviously claimed some locus in the matter of food. On the other hand, the Ministry of Agriculture is traditionally, for the producer, the sponsoring Department and is so regarded, not only by farmers and horticulturists but by the wholesale trade and retailers. As these amendments suggest, it is important that it should be made clear to the Price Commission that it should consult.

There is also the case which will be within the knowledge of the House, where an industry has been too frequently investigated. The Office of Fair Trading will be carrying on and the Monopolies Commission will also be there. It is the view of many of us outside the House as well as in that if one pulls up the plant to examine the roots, it does not grow as well as if one leaves it growing.

There are certain industries—one is brewing, because brewing has been investigated frequently in recent years—which are sensitive about prices because the public get more angry about beer prices than about many other prices. That is the sort of case where, if the Price Commission were minded to look again at beer prices, it should discuss the matter with the Monopolies Commission which has looked at it, and with the Ministry of Agriculture, Fisheries and Food which, by definition is responsible for the industry.

Some industries have a fluctuating demand which depends not so much on their own actions as on Government Departments. I take, for instance, firms supplying building materials. The fortunes of the housing programme were discussed recently. The industry is sensitive to changes in housing policy. It could well be that the sponsoring Government Department will seek a big increase in the housing programme or in office or factory building, in certain parts of the country. Firms are anxious about this. Perhaps in planning agreements they will have made arrangements with the sponsoring Department for rapid expansion. For the Price Commission to be totally independent and to be able to investigate without consulting the sponsoring Department would be a mistake.

It is within the knowledge of hon. Members on all sides of the House that there is a feeling among many firms that they are investigated too often. They ask rather for less legislation and bureaucracy. They ask to be given a better chance to get on with their jobs. But this should not be used as an excuse for the Price Commission not to look at industries. The second leg of the amendment gets that right by stating the duty of consulting the sponsoring Department. That is a perfectly reasonable balance which should recommend itself to the Minister.

Photo of Mr Geoffrey Dodsworth Mr Geoffrey Dodsworth , South West Hertfordshire

I felt that my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson) had made in these amendments a reasonable, logical and practical proposal. It was surprising to find the inconsistency between Clauses 4 and 5.

When one looks at the Standing Committee Report on this point, one finds the Minister's reasons for not accepting an amendment in this form. He is concerned to preserve the independence of the Commission by not requiring a statutory consultation procedure, particularly with sponsoring Departments.

The sponsoring Departments have the closest possible association. If we look at the record of what has happened so far, it seems that the evidence is all too clear. If one quotes from one of the Price Commission Reports, of not long ago, one will find it clearly said that The power to control the nationalised industry prices both initially and subsequently is thus firmly vested, subject to specified conditions, in the Minister responsible and not in the Price Commission. The Price Commission's powers are limited and likely to be of little practical application". What we have is the appearance but not the reality. If one wants to move from that generality to the practical experience of what has happened so far, the best example is that which has been quoted on a number of occasions in the previous debate—the price charged for gas. We had to press the Minister to publish that statement. It was not made until pressure had been exerted by this House. But that statement makes it clear that the Price Commission is considering imposing a restriction under Section 6 of the Counter-Inflation Act 1973 in relation to proposed increases.

The London Gazette, dated 5th April, stated: the Secretary of State after consultation with the Price Commission and being satisfied that there are exceptional circumstances which justify an intervention by him hereby, … consents to the implementation by the British Gas Corporation of the proposed increases for their financial year ending 31st March 1978. The effect was that the whole procedure became a waste of time. We had a situation in which we had a report, investigation and a recommendation. Then we decided to ignore it. When the Minister says that he feels that we should not require a statutory consultation process, I have to ask what other sort of process is there. That underlines the need to lay down clear in this House exactly the sort of procedure we want to have started and followed. If such procedures are not specified, we can suspect—indeed, believe—that it will not happen at all.

We are here to represent the interests of consumers. We have heard a great deal about the interests of the consumer. The best way to protect them is to ensure that the work which takes place is done with the fullest consultation and that we specify the need for that consultation.

In those circumstances it seems to me that my hon. Friend the Member for Hertfordshire, South has made a clear, practical case for the inclusion of the amendment to ensure that this consultation takes place, particularly with sponsoring Departments. From the record that exists at present, the case against the amendment does not bear full examination.

9.0 a.m.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

In opposing the first amendment, and in supporting Government Amendment No. 24, perhaps I can draw upon a precedent which ought to appeal to the Opposition since they made so much of it in previous debates. That is the precedent of references by the Director General of Fair Trading, or by my Department, to the Monopolies and Mergers Commission.

There is not in the Fair Trading Act, and there has not been in monopolies legislation any previous statutory consultation between my Department or the Director General of Fair Trading or the firm concerned or the sponsoring Department. But no one has suggested that the Director General does not consult informally with both the firm or the sponsoring Department. I put that forward both as a precedent for not requiring a statutory procedure and as a precedent for showing how informal consultations do take place.

The second point that I make about the amendment is that in drafting the Bill we tried to restrict to as short a period as possible the time during which firms would be subject to an interim price increase and to a freeze on their prices. We have drawn that period short, 28 days plus three months' maximum for the investigation. If we were to introduce a statutory consultation procedure we would have to make some allowance for it in the time table. A proper consequence of the Opposition amendment would be that the period of freeze would be extended from four months to five months. The moment one introduces a statutory consultation procedure one must allow some time for it.

I assure the House about consultations with the firms. As far as it can, the Price Commission will have consultations before deciding on an investigation. That follows the precedent of the Monopolies Commission legislation.

I give the same assurance in relation to consultations between the Price Commission and the sponsoring Department. But I warn the House about the possible danger of introducing consultation procedures on examination of nationalised industry prices. We intend that the new prices legislation should bear equally on prices of nationalised industries as it does on prices of private industry. Having said all that we have about competition and monopoly, it should actually bear harder on the nationalised industries because they need more countervailing power than those exposed to the winds of competition.

I urge the Opposition not to insist that the Price Commission consults the sponsoring Department over price rises of products of the nationalised industries. If they do, and there is a rise in the price of gas or electricity, the Price Commission would be bound to have statutory consultations with the Department of Energy. If, subsequently, there was no investigation of the price rise, commentators would claim that there was an unholy deal between the Price Commission and the sponsoring Department. If statutory consultation existed and there were price rises in Post Office charges, which were subsequently not investigated, the same accusation would be made about the Department of Industry.

Photo of Mr Tim Smith Mr Tim Smith , Ashfield

I read the report of the Standing Committee on this point but I did not follow the logic of the argument. I understood the necessity for the Price Commission to maintain its independence, and the fact that this might be compromised, especially in relation to the nationalised industries. But no one is suggesting that consultation means participation. The Price Commission has to do no more than take account of the views of the sponsoring Department. It can then ignore them.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

It is a matter of impression. People sometimes can twist the facts. Also, if there were statutory consultation, time would have to be provided for it, and once statutory consultation is provided the legal question is raised whether it has actually taken place. That means that the period in which prices are frozen must be lengthened. It has worked with the Monopolies Commission, and I think that it will work satisfactorily in future under the provisions of the Bill.

On the safeguards provision, the Opposition are saying that if a firm can take account of the safeguards in no circumstances should there be an investigation. Now that the Conservatives have had the chance to examine the consultation document on safeguards they will see that the safeguards are more generous at the beginning of the investigation than at the end. The fact that the nature of the safeguards differs during and after investigation provides a reason why the safeguards themselves should not prevent a firm from being investigated. The circumstances in which a firm can take advantage of the safeguards in an investigation are extremely rare. In most of those cases the Price Commission would be wasting its time.

There are two circumstances in which a firm could claim the advantage of the safeguard. The first is that the firm itself is so inefficient as a result of a monopoly situation that it has to take advantage of the safeguards. That is possible. Some monopoly institutions can have a low level of profit and a comfortable life. It is possible that a monopoly would be able to take advantage of the safeguards. In principle that would not rule out an investigation.

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex

Does the scenario painted by the Minister apply to a nationalised industry?

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

The hon. Gentleman is asking whether a nationalised industry, which has the advantage of safeguards, would be immune from investigations. The answer is that it should not be immune.

I turn to the point about public interest. There may be circumstances in which there is so much public interest and public concern about a price rise that, notwithstanding the fact that safeguards apply, there should be an investigation. I beg Opposition Members not to see the Price Commission as a perpetual enemy or harasser of private industry. In many cases a firm following investigation and examination—as happened with the Monopolies and Mergers Commission—will come out with a clean bill of health, and a good deal of public criticism may be disabused as a result of investigation. One should not rule out that possibility. The circumstances in which safeguards and investigations apply at the same time will be rare, but I would not rule out that possibility on some occasions.

Photo of Mr Robert Rhodes James Mr Robert Rhodes James , Cambridge

I feel that I should ask for the indulgence of the House once more since I am appearing at the Dispatch Box for the first time.

I have listened carefully to the arguments advanced by the Minister of State and also to the points made by my hon. Friends, particularly my hon. Friend the Member for Hertfordshire, South (Mr. Parkinson). I would remind the Minister that we spent some time on these matters in Committee.

The principal point that concerns us is the requirement to statutory mandatory consultation. That still remains the difference between us. I regret this because a spirit of amity has now crept into the Chamber. We feel strongly about this point since it relates to the position and credibility of the Commission and to the value of the Bill.

Although the assurances we have received from the Minister of State and the Secretary of State are acceptable, we return again and again to the question, "Why cannot these assurances, if sincerely meant, as we know they are, be included in the Bill?" We are extremely unhappy that the Government are proposing to eliminate the modest advance in Committee where the provision was amended by eight votes to six. But the present situation is that there is a substantial anomaly between Clauses 4 and 5. Our answer is to amend Clause 4 so that it will fit in with Clause 5. The Government take a wholly different view, whereas we retain our view.

My hon. Friend the Member for Ash-field (Mr. Smith) has made a debut which many of us would envy, and we congratulate him. Although accountants in this House are a small breed in numerical terms, no fewer than three took part in this debate—of whom I am not one.

The Minister was asked by my hon. Friend the Member for Hertfordshire, South what consultations can be guaranteed other than those set out in the Act. The Minister replied on the same lines as he did in Committee. As a man of common sense, the Minister will know that the Commission will be com- posed of people of integrity and responsibility. Is he suggesting that consultation will invariably take place and that there is no need to write that into the Bill? If that is indeed the case—and I am sure that it will be so—I do not see why a similar amendment to that carried in Clause 5 should not be adopted in Clause 4.

I come finally to a point that goes beyond these amendments, although the amendments reflect the problem that concerns us all. We wish to retain the independence of the Commission but we are increasingly concerned—and we have expressed this view before—that the powers of the Commission and the Secretary of State are rather too wide and too general for our comfort.

For those reasons, although I express thanks to the Minister for the characteristic courtesy and care with which he has answered these points, I must advise my hon. Friends to divide on the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 48, Noes 236.

[For Division List No. 168, see c. 1633]

Question accordingly negatived.

Photo of Mr Kenneth Baker Mr Kenneth Baker , St Marylebone

I beg to move Amendment No. 14, in page 5, line 20, at end insert: 'stating their reasons and indicating to which matters listed in section 2(2) of this Act they have in particular had regard in forming their opinion'.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

With this it will be convenient to take Amendment No. 75, in Page 9, line 4, Clause 6, at end insert— '(d) to include in their report an indication as to which of the matters listed in section 2(2) of this Act they have in particular had regard in preparing that report.'

Photo of Mr Kenneth Baker Mr Kenneth Baker , St Marylebone

I seem to recall at about 4 o'clock this morning trying to support with enthusiasm the motion that we should adjourn and report progress. I and my hon. Friends who spoke in support of the motion could not persuade the House to do that. In its wisdom the House decided to continue. Perhaps that is just as well because if the House had adjourned it would not have had the pleasure of hearing me move this set of amendments.

It is a long time since I have addressed the House at this hour in the morning. The last occasion I remember doing so was when we had experimental——

Photo of Mr Hugh Jenkins Mr Hugh Jenkins , Wandsworth Putney

On a point of order, Mr. Speaker. Would it be in order if I were to deny myself the pleasure to which the hon. Gentleman has just referred?

Photo of Mr Kenneth Baker Mr Kenneth Baker , St Marylebone

The hon. Gentleman is a free agent, so he can do what he chooses. The hon. Gentleman is missing a chance that occurs only once in a decade of hearing me speak at this late hour. The last occasion was when the House considered the Post Office Bill, which was introduced by Mr. John Stonehouse in 1968–69. At that time we had experimental morning sessions, which have now become a fashionable heresy in that one of the outstanding procedural reforms would be for the House to meet in the mornings and to finish earlier at night. I hope that hon. Members who have not experienced morning sittings before will have a little flavour of one this morning. They should realise that the principle of morning sittings should remain a heresy and that it is no way to improve the procedures of the House of Commons. We do not know whether we should miss the matins of a new day or the prolonged vespers of the old day.

The amendments, though important, are detailed. We are now getting down to the details that will affect companies and businesses which arc concerned with the provision of goods and services. They want to know how they will be affected by the operation of the new procedures of the Price Commission. Therefore, businesses will be concerned with our debates over the next few hours. The debates in the earlier part of the sitting dealt mainly with points of principle and important points of detail. Here we are coming to the operation of the Price Commission and to seeing how it works.

The mechanism which triggers off the process of investigations under the Price Commission is that those large companies that have to pre-notify price increases must continue to do so, whereas the smaller and medium-sized companies that do not have to pre-notify but just increase their prices will continue to do so. When either of those two events occurs the Price Commission will either be told, or it will pick them up. It must then decide whether it should do anything. That is not the position now. It must now decide according to the provisions of an elaborate code.

The discretion that the Price Commission has at its disposal to say whether it should do anything is limited. In future the occurrence of a price increase event will trigger off the investigatory mechanism. One of the areas of confusion for business and industry is that there need not be a specific price increase. It need not be an increase of over 5 per cent. or an increase within six months of the last increase. It need not be a monthly increase in the prices of seasonal commodities or something of that kind. It applies to any price increase. That creates the first element of uncertainty. Companies do not know from that alone whether they will be investigated.

It is clear that the Price Commission, even with its large staff of 650, cannot possibly examine all price increases of all companies right across the country. There must be an element of selectivity and choice. These two amendments are concerned with what criteria the Price Commission should use in deciding whether to investigate a price increase.

Certain criteria are laid down in Clause 2. It is the contention of the Opposition that those criteria—when it comes to deciding whether a company should be investigated and whether the known price increase event should be investigated—are neither clear nor precise enough.

The criteria in Clause 2 are exceedingly wide. I do not object to them for that reason. The Government have fulfilled the undertaking they gave in the consultative document that before initiating an investigation the Price Commission would have to take into account all these items such as the need to recover the costs incurred in efficiently supplying goods and services and in maintaining the value of the relevant businesses. We had a debate on that. The hon. Members for Liverpool, Garston (Mr. Loyden) and Bristol, North-West (Mr. Thomas) treated us to a canter through O-level economics at about 1 o'clock this morning.

There is also the desirability of encouraging reductions in costs by improvements". But any business man going through this list of criteria would find it difficult to know whether his particular price increase would be subject to an investigation. There is that degree of obscurity.

9.30 a.m.

I do not believe that that degree of obscurity should continue. Investigations are undertaken by the Monopolies Commission only when there is a prima facie case of a monopoly existing, when it can be clearly seen that certain companies are operating in a monopolistic, semi-monopolistic or oligopolistic situation. The Director General of Fair Trading cannot say "I think that is a monopoly. Let us have a look at it." Certain criteria must be applied. That is one of the basic principles of administrative law and general law in our country.

That is not the case under this legislation, and this is one of its most unsatisfactory features. Hon. Members talked glibly during the night of combining the Price Commission and the Monopolies Commission. There is something to be said for that, but only if the criteria for investigations by the Price Commission are much more clearly defined, so that a company knows whether it is likely to fall within an investigation, whether its particular practices would make it liable to an investigation.

The purpose of the amendment is to ensure that when the Commission decides to investigate a price increase it not only tells the Secretary of State—it must do that, under Clause 4—but gives the reasons, that it says which criteria in Clause 2 have led it to believe that a company should be investigated.

The Commission will write to the Secretary of State and its letter will become an open document. The company will be able to make it open, and in the Commission's published report it will be seen. The exchange of correspondence, or the reasons for the reference, could be specified. Therefore, for the first few months and years of operation, for as long as this was the system, one would be building up a series of precedents, building up case law, as it were, so that companies would be able to know why one of their competitors or a company in an associated industry was investigated.

The only guidance that I can find is in the existing Price Commission reports. The present Price Commission operates an entirely different system of allowable costs with a detailed code. We are told that the new system will be much less burdensome to industry from the point of view of administrative costs. But I am advised by some large companies that that will not be so. Their preliminary assessment of the work load they are likely to undertake under the new system is that they are likely to be involved in more administrative overheads in operating the new system.

Representations have been made to me and several of my hon. Friends that the new system, although it has the superficial appearance of being simpler, will be more burdensome because it requires companies to provide information in a rather more detailed and broken-down way. The companies that have made representations are not small traders but substantial companies. One of them has entered a planning agreement with the Government, so I dare say that that information has been passed to the Government as a result of the planning agreement, and I hope that the Minister will take its comments on board.

The only flicker of guidance one can find about the sort of criteria that the new Price Commission will use in its investigations is to look at the sort of criteria that the existing Price Commission uses, not in the main bulk of its work, which is the administration of the Price Code, but in its own investigations.

It is interesting to look at the Price Commission's last two reports, especially the sections dealing specifically with the five or six separate investigations. The investigations that the Price Commission undertakes now, under its investigatory powers under the 1973 Act, will be similar, though in the nature of things less elaborate, than those which it will be undertaking in future.

I turn to the last but one Price Commission report and look at the five investigations carried out and reported on. The first concerned diabetic foods. The Commission states: Here the problem was that the diet of a diabetic person is inherently more expensive, because he has to avoid high carbohydrate foods such as cereals and potatoes, while special diabetic products cost more to make and are not sold in economy sizes in super markets. The criterion there was that a specific group in society had to pay rather more than others because of their illness.

The report is interesting. It confirmed that the prices of diabetic foods were usually higher than ordinary foods, because of the higher cost of production". That was not perhaps a blinding shaft of light. One could perhaps have picked that out from the nature of diabetic foods.

The second investigation was interesting, too. The Price Commission undertook to investigate food prices in outlying areas. This point was touched on briefly in an earlier debate.

Photo of Mr Kenneth Baker Mr Kenneth Baker , St Marylebone

But so well. I think that the hon. Gentleman is sitting on the wrong side of the House to appreciate this point.

That investigation was triggered off by public concern about the price of food in outlying areas. The great paraphernalia of the Price Commission was therefore geared up again and, sure enough, the Commission came to the conclusion: The difference was greatest in the North of Scotland. It also discovered—again, the value of these reports is highlighted by the conclusions—that The cost of transport to outlying areas was a factor in higher prices. We are trying to draw out of these investigations the same criteria, and it is difficult to do that. The only investigation which has a clear criterion was that into sanitary towels and tampons. The report states: The Commission drew attention to the price-relationship between towels and tampons. The market for tampons is dominated by two companies". Clearly here was a semi-monopolistic or limited competition area. I thought that the Commission came to a sensible conclusion. It recommended an immediate cut of 10 per cent. in the recommended retail price. The criterion there is clear. It ties in with one of the criteria in subsection (2).

The other reports are not of much guidance. I do not know what triggered off the investigation into the price of fish. It happened at the time when the Secretary of State had other ministerial res- ponsibilities concerned with the cod war and so on. There was probably a feeling that the price of fish was very high in the shops and that, therefore, there should be an investigation. That is the kind of temptation to which Governments invariably fall victim. It was not a very effective report.

There was an investigation into small packs. I suspect that this was triggered off by the consumer movement. The report states that it is well known that goods bought in small packs often cost proportionately more than larger sizes because the expense of making and slocking them is higher". The Commission looked in detail into 16 products, but it— found no evidence of unreasonable profits". Therefore, some of the work of this Commission has been helpful.

There was then an investigation into small electrical household appliances. The Commission found that trade was very competitive.

Two subsequent reports have been published. One again tries to find the criteria on which they were conducted. A report on funeral charges has been published. I have never been able to decide why the Commission decided to examine funeral charges. The Commission found no evidence of the kind of abuse that was widely published in North America. Members of the Commission had clearly read Evelyn Waugh's "The Loved One".

One still does not know why it decided to study funeral charges. They must be competitive. If hon. Members picked up their local papers and turned to pages six or seven they would find a mass of advertisements for funeral directors, who are usually associated with small builders because business is not all that regular. One has only to spend half-an-hour looking up these funeral directors to realise that price competition operates. The Commission investigated these charges because it received complaints from several hon. Members and 12 members of the public. It certainly could not have received complaints from dissatisfied customers.

I wonder whether it is correct use of State money to investigate such a business, because the facts spoke for themselves. The profits of coffin manufacturers appear to be modest. It is nice to know that the cost of dying at least is not rising as much as the cost of living.

Two investigations, including one on brewing, have not yet resulted in reports. Another investigation involved soft drinks sold on licensed premises. This clearly was an area of limited competition. The report recommended certain reductions in prices.

It is difficult to find out from all this why the Price Commission decides to look into some matters and not into others. Under the existing régime that is bearable because over a period of one year it might examine only four or five sections of industry. In only one or two cases has it been limited to a small number of firms. But in future the day-to-day work of the Commission will be to undertake investigations. The Minister owes it to British industry to make it clear under which circumstances certain parts of it will be investigated. British industry needs certainty, stability and the knowledge about where it stands to enable decisions to be made on pricing and investment programmes.

There is no doubt that the system of investigation in the Bill will create uncertainty and instability. Companies will not know when they are to be investigated. Some prices will be investigated and some will not. I have no doubt that some will be investigated when the Minister is subjected to pressure from his Back Benches. Some increases will be investigated because the particular Minister has a fad about the price of certain goods. Some will be investigated because the wives of Ministers have said over the weekend "Did you know so and so?" I understand that already the wife of the new Chairman of the Price Commission, pictured in yesterday's edition of the Daily Express, is hard at it showing her husband the price of soap suds or something. This is the sort of quixotic way in which investigations will be initiated. I do not believe that one should establish a system of investigations that depends upon quixotic chance.

9.45 a.m.

I ask the right hon. Gentleman what thought he has given, if any, to the criteria that will be used. He knows that they will not be the criteria under Clause 2. I have heard a rumour that there may almost be a random selection by the Price Commission. As it cannot possibly investigate all price increases, it will say "Right. In the next month we shall investigate 100 price increases where the increase is over 5 per cent."—or perhaps 1,000. It may say that there will be 200 investigations in the South-East, 200 in the North-West, 100 in the South-West, and so on—almost taken by random sample, in the way in which pollsters select the numbers and types of people they use in their opinion polls.

I emphasise how vague and uncertain this is. Perhaps the Secretary of State will be able to be more specific. If it is to be something more than a random sample, what is it to be? Will it concern companies that frequently raise their prices, or companies that operate in certain types of fast-moving consumer goods? I hope that the right hon. Gentleman will clarify this matter.

However, in the absence of clarification in the Bill as it now stands, we are pressing that when the Price Commission decides to investigate a price increase, for either goods or services, it not only tells the Secretary of State that it wants to investigate the particular price but gives the specific reasons—namely, for instance, that there has been a price increase in the product of 5 per cent. within the last three months, or that the Commission thinks that the profits may be unreasonable—if it could ever define what that is—or that there is a limited area of competition. Companies ought to know and not have only this rather vague quixotic Sword of Damocles hanging over all their business decisions and operations.

In Committee, the Secretary of State accepted the case that I have been putting forward. When I asked him how the Commission would operate, I put this question: suppose a company applies for a price increase of 15 per cent. and the Commission says that it will investigate that increase, and that entails investigating the operations of the company because all the factors affecting its operations must be taken into account. Then let us suppose that, threatened with the whole panoply of a full investigation, the company says to the Commission "We would like an increase of 15 per cent. but we could get by with one of 12 per cent. If we have one of 12 per cent., will you then still investigate us?"

That is a form of bargaining which in the American courts would be called plea bargaining. The Minister said that he thought that that was quite likely to be the procedure that would develop. That, of course, does not make the Commission so much a Price Commission as a mart, where one puts in one's bid and then discusses it with the Commission to see what it will bear, and indeed, this increases the uncertainty even more.

It seems to be absurd, even at this early or late hour—whichever way one likes to look at it—that British industry should have this degree of uncertainty thrust upon it at the very time that the Government, through their industrial strategy—if those two words mean anything—are trying to increase the confidence of British industry, trying to get British industry to invest more, to expand more, to build more factories and to expand export sales. While all this is taking place on the one side, on the other side we are saying "We are setting up a whole machinery to interfere and make your business life much more difficult and confused". The Secretary of State will know that I am not against the Commission looking into things, but if it is to work fairly, it must work by criteria laid down in machinery by which the Commission is to undertake investigations.

That is why we are saying that when an investigation is undertaken, the Secretary of State must be told why it is to be undertaken so that, as the years and months go by—and it is only months in the case of this Government—a series of precedents will be established, a series of guidelines, and a body of case law will emerge, which industry will be able to look at, to turn to as a reference, so that it knows when a particular price increase will be examined.

That is why I hope the Government will realise that these amendments will be helpful and are needed by British industry. I hope that the Secretary of State will accept them.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Perhaps inevitably, perhaps not, this has turned into a debate about the criteria which will govern the behaviour of the Price Commission when it investigates specific price increases.

Before I turn to the amendments specifically, I must do my best to answer the more general questions put by the hon. Member for St. Marylebone (Mr. Baker). He says, with amazing assurance, that we are all aware that whatever those criteria are by which they are judged, they will not be those in subsection 2. That is absolutely wrong. The criteria by which they will be judged will be strictly those in subsection 2. Those are the criteria which the Commission is required by law to take into account.

Because of that, we constructed the criteria as carefully as we could and then improved on them. We were the fortunate recipients of the advice of others and made the criteria simultaneously more extensive and more precise, because there is a statutory duty on the Price Commission, when it decides to look at companies or to investigate prices, to probe or to freeze, to judge their decisions against the criteria in Clause 2.

Inevitably the hon. Gentleman drew a parallel between the operation of the Monopolies and Mergers Commission and the Price Commission in the conduct of investigations. I am always glad when that parallel is drawn because it is the appropriate one. What I have been failing to understand is the degree of difference in operating techniques to which the hon. Gentleman referred as the reasons for defining the criteria even more, so producing even more precise criteria.

The hon. Gentleman will recall, from his ministerial days, that the Government policy is crude and arbitrarily clear financially. Mergers have to be of more than £5 million, disregarding the special case of newspapers mergers. That is the size under which we cannot investigate and that is exactly what is said in respect of the Price Commission. It is a matter of size first, and both bodies then go on to exercise discretion. I hope that the hon. Gentleman will confirm that discretion is exercised by the Director General of Fair Trading and the Monopolies and Mergers Commission, against which the wider criteria are used than we have laid down in the Bill. Both bodies, the Director General—if I may call him a body—and the Monopolies and Mergers Commission, are required to take account of the public interest and, by any standard, that is a very wide criterion. In the Bill we have tried to give a degree of certainty to make the whole operation a good deal more precise.

The hon. Member for St. Marylebone is right to compare the two institutions, but the conclusion to which he ought to come is that in this Bill we have done something a good deal more precise and a good deal more reassuring.

We shall do so, of course, on the information supplied by the notifying companies. The hon. Gentleman asked a specific question about that. He said that he had heard that what we asked for by way of information would be even more onerous than the present information requirement concerning cost and margin control.

I hope that I can reassure the hon. Gentleman. We produced information some months ago, and I confess without embarrassment that we showed it to those with whom we negotiate—the CBI, the FDIC and the Retail Consortium—and we merely allowed them to rewrite it for us. I would not claim for a moment that the three industrial and commercial institutions with whom we negotiate are wholly in agreement with every detail in the Bill. But the initial information was something that they helped to construct and about which they are wholly satisfied.

The other reassurance—[Interruption.] I find it difficult to answer the hon. Gentleman's questions when he is talking not only to one of his hon. Friends but to several simultaneously. I am literally trying to answer the hon. Gentleman. It would be a great help if he listened to the points that I am struggling to make.

Photo of Mr Kenneth Baker Mr Kenneth Baker , St Marylebone

The right hon. Gentleman has my undivided attention.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I am very grateful. The other criterion to which the hon. Gentleman referred was the criterion of case law. I agree with him entirely that this is a very important element. He must remember that many of his questions concerning the case law that I might lay down, or the Government might provide, are wholly inappropriate and that the case law will be established by the Chairman and the Commission.

One of the essential features of the new powers is that the initiative for price inquiries will be taken by the Commission itself. That is part of the Bill written in at the request—I might even say the insistence—of industry. It feared that if the initiatives for price inquiries were made by me or by any other Minister in the Government there might just possibly be a political overtone, and that we might just possibly choose a sensitive item about which the hon. Gentleman was so concerned.

After my initial proposals were published I agreed that the initiatives should be removed from Government and placed in the hands of the Commission. It is not for me to lay down case law. It is for the Commission to do so. I hope it will be expected that the Commission will do so in a way which calms the fears of some sections of industry.

I must say, as I have said before, that now that the names of the deputy chairmen and chairman are known, the essential reassurance of the Commission is the appointment of members in whom industry can have confidence. I was grateful to the hon. Member for Uxbridge (Mr. Shersby), since I announced the names of the deputy chairmen and the chairman in answer to him yesterday. If he puts down a Question some time next week he might get a similar response with regard to the names of the members. It is that body of people who must lay down the criteria establishing the case law. It would be quite wrong for me to do so within the terms of the Bill.

But now that the chairman has appeared in public and answered some questions, there are some things on which reassurances can be given.

10.0 a.m.

The hon. Gentleman quoted the Minister of State being asked whether the Commission would proceed on the basis of "15 per cent. suggested, and 12 per cent. accepted". I am not sure about that sort of bargain. But the chairman-elect told the newspapers yesterday or the day before—the days this week all seem to have merged into one another—that his certain hope was that he would proceed by discussion and negotiation with industry, rather than rigidly and automatically interpreting the legal powers. If that attitude can be interpreted as "15 per cent. suggested, and 12 per cent. accepted" so be it. That is the important thing to bear in mind.

Another error that the hon. Gentleman made was the comparison of the inquiries that the new Price Commission will make with those made by the old Price Commission. There is no relationship between the two. The present Price Commission made its general inquiries on the initiative of the Secretary of State. Inevitably, many of my suggestions resulted from the enthusiasm, fears, and concern expressed to me by hon. Members and my constituents. That will not happen in future. The new procedure will be similar to that which applies to Monopolies and Mergers Commission. The forms will come in, examination will be made, and the results measured against the criteria. Those which seem to give cause for concern will be examined in a wholly objective fashion.

Because of this I do not believe that there is a necessity for either of the amendments which have been the coat hangers on which the hon. Member has hung his elaborate garment. There is no need for the Price Commission to describe, or be obliged legally to describe, the reasons for a move towards an interim investigation. Its method of approaching this is already limited by the criteria and in extreme cases by my veto, if I find myself under pressure which leads me to believe that the Commission is behaving in an unreasonable fashion. The Commission is obliged to behave reasonably, and if it acts in an arbitrary fashion the courts are the final redress.

In this initial period there is no doubt that the investigated company will know which criterion is giving the Commission concern, and its reason for pursuing the investigations. There is no way for the Commission to pursue an investigation without describing its interest to the firm concerned. This job cannot be done blind. The Commission must write to the Company and tell it that it wants certain information. In the request for information there will be a clear statement of the criterion under which the investigation is being conducted.

The same rule applies to Amendment No. 75, which is being taken with No. 14. Clearly when the report is made, since the Commission is obliged, if it recommends a prolonged freeze to me, to give reasons for that recommendation, there will be no doubt about the powers and the criteria under which the Commission is operating.

I understand the hon. Member's fears, but I believe that they are wholly groundless. A wholly reasonable House of Commons would regard the amendments as unnecessary. If it does not, I must, partly because of the drafting and partly because the amendments are unnecessary, ask my hon. Friends to vote against them.

Photo of Sir David Price Sir David Price , Eastleigh

The Secretary of State drew a comparison between the operations of the new Price Commission and the operations of the Monopolies and Mergers Commission. He will acknowledge that at the beginning of an investigation there is an important difference of kind and not simply of degree between the actions of those two bodies.

The first task of the Monopolies and Mergers Commission under monopolies legislation is factual—namely, "Is there within the meaning of the Act a monopoly?" That is not an easy question to solve. It is a matter of defining the market area and also of defining the product area and how far there are subsidies. It is a matter of fact. If the Monopolies and Mergers Commission discovers as a matter of fact that there is not a monopoly situation, that is the end of the matter and it will not proceed further. If it discovers that there is a monopoly, it comes to consider the second question—namely, whether the monopoly is, in its judgment, contrary to the public interest.

If it is decided that that monopoly or certain features of its monopolistic position are contrary to public interest, the Commission comes to its third task, which involves putting recommendations to the Secretary of State. I repeat that there are three elements in that situation, but the first is purely factual. When we come to consider the actions of the new Price Commission the first question "Have there been price increases?" is not for the Commission to determine. That is the reference point.

The difficulty that arises is that in an inflationary situation there are bound to be some price increases in the vast majority of products and services. One might argue that a price increase up to the level of the common level of inflation would not be a cause for great investigation, but that does not fall to the Price Commission. When there have been price increases, it has to determine whether to investigate. What it is not able to do is to express a view on the facts at this stage. The fact that there has been a price increase is sufficient reason, whereas with a monopoly investigation it has to determine whether there is a monopoly. There is an important difference.

The Price Commission, coming to that second tier of investigation, has to decide whether there have been price increases and whether it should investigate. The amendment suggests that the Price Commission should state its reasons for deciding that there should be an investigation. The whole range of product, even those above the de minimis rule, in an inflationary age will be many. Guidance should be given why a firm has been selected for investigation—and that is all the amendment seeks to do. The third question, with which we need not deal, is what the recommendations are to be once an investigation has taken place.

In Committee the Minister of State said: In practice, the Price Commission will try to inform the firm to be investigated of its prima facie reason for coming to the conclusion that there ought to be an investigation."—[Official Report, Standing Committee "B", 12th May 1977; c. 217.] It seems to me that there is little between us on this matter. The Secretary of State apparently agrees with the order of things, but he seems to object to spelling out what we propose in our amendment. I do not see much here that he could find objectionable, whereas we can see considerable virtue in having this written into the Bill. It ties in with the point made earlier that in the early stages of the operation of the new Price Commission it is important for criteria to be given so that case law may be built up and so that industry, the trade unions and the general public know how the Commission will act.

I cannot believe that there is anything of substance between us and I should have thought that by this time—10.10 a.m., when we have been going on the Report stage for some time—this would be a reasonable amendment for the Government to accept.

Photo of Mr Tim Smith Mr Tim Smith , Ashfield

I should like to make some brief observations about important matters that are encapsulated in these amendments. I wish to refer to an obser- vation that was made by the Secretary of State about the extent to which the previous Price Commission and the reports that it made were relevant to the proposed Price Commission and the reports that it will be making. The right hon. Gentleman said that the reports of the previous Price Commission were made by order of the Secretary of State but that in this case, in order to strengthen the independence of the new Commission, the Commission itself would initiate investigations.

However, there will be a parallel with the sort of unwritten code that arose under the previous practice. In practice there were five different stages with codes and revised codes. Firms of accountants and professional advisers built up their own sort of case law. However detailed the code, some questions must always be left to the discretion of the Commission. It is helpful for those involved in trying to determine matters fairly if a case law can be built up.

I want to raise some other important points of principle. It must be recognised that administration law must apply to such a case because the Commission is a quasi-judicial body. It should therefore, for example, be possible for the principle of audi alteram partem to apply, and for us to ensure that nobody should judge his own case.

Another important part of administration law is that when a decision has been taken by a quasi-judicial body the reasons should be stated, because if they are not, it makes it more difficult to challenge the decision.

I notice from the report of the Committee that the Minister said: if the Commission mounts an investigation on a wholly unreasonable basis, its action will be open to challenge in the courts."—[Official Report, Standing Committee B; 12th May 1977, c. 214.] We should not welcome it and one does not run a country fairly on court cases. However, that is a longstop.

It is important that we should be given details to widen the basis upon which one can challenge a decision. Reasons, built up over a period of time, would give guidance and set precedents so that a series of customs will accrue. We said during the debate on Clause 2 in Committee that the matters that can be taken into account on Clause 2 vary greatly. It would help in the elimination of uncertainty if people were told not only the reasons for arriving at a decision but the criteria under Clause 2 that had been referred to. It would then be possible for case law to be built up. That would be helpful to everyone involved in trying to pilot the new Price Commission in the most efficient manner.

10.15 a.m.

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex

Unfortunately I was not present in the Chamber to hear the Minister's first few remarks. However, I listened with care to what was said by my hon. Friend the Member for St. Marylebone (Mr. Baker) when he introduced the amendments. My hon. Friend should speak more frequently at 9.20 a.m. My hon. Friend did not know whether he was in a late vespers or early matins mood—but some of us may have a Nunc Dimittis feeling—but he rang with all the clarity of a matutinal bell.

I should like to take issue with my hon. Friend because he complained that the Price Commission had investigated the cost of funeral services in this country. Although, as a result of the Commission's investigation, the Minister said that there was no evidence that they were making excessive charges, it was good that the Price Commission undertook that investigation. There was a general fear that whatever the initial price quoted for a coffin over the telephone, charges were added once the client was in the grip of the funeral parlour and crossed the threshold on behalf of the bereaved relative. All sorts of additional services were virtually forced on him that he was hesitant to decline. It was good that the inquiry was undertaken.

I remind my hon. Friend the Member for St. Marylebone of Jessica Mitford's important book "The American way of death" in which she refers to the experience of a friend who arranged a funeral on behalf of her brother-in-law. She went to a "reputable" undertaker and, in the interests of saving the widow expense, chose the cheapest redwood casket and was quoted a suitably low price. However, the salesman called her back and said that the brother-in-law was too tall and did not fit into the cheap casket. He would have to go in a bigger one—costing 100 dollars more. The woman objected and the salesman said that the undertakers would use the cheap casket, but they would have to chop off her brother-in-law's feet. The image of that sort of bizarre and macabre experience haunts the undertaking profession and it was right that the Commission should have held its inquiry.

The amendments are eminently reasonable. I agree with what my hon. Friend the Member for Ashfield (Mr. Smith) said and I am sorry that the Secretary of State feels unable to accept the amendments. As I returned to the Chamber, I thought that I heard the right hon. Gentleman saying that the cost to major companies of the new procedure would, in his judgment, be less than the present cost.

From comments made to me about discussions on the pre-notification scheme, all the indications are that the cost to major companies will be considerably greater. We have been told that in the pre-notification procedure it will be necessary to give details about return on capital, profit margins, return on home business and forecasts for four quarters ahead. This is likely to lead to very much higher costs than at present. Last year, ICI published a figure of £500.000 as its cost of meeting the administration of the Price Code. Clearly it is important—if prices are to be kept down—that the new code should not add to manufacturing costs. It would be helpful if the Secretary of State could give an assurance that it is the intention of the Bill to reduce the administrative work load substantially rather than to add to it. That would help the discussions over the consultative document.

I do not understand the Secretary of State's reluctance to accept the amendment. The consultative document foreshadows such a degree of contact between the Commission and industry. We expected that it would follow naturally that the reasons for undertaking an inquiry should be published. Paragraph 4 states that the Commission will wish to consult industry and clarify the ways in which it will exercise its powers on such matters of concern to industry as". The right hon. Gentleman then lists a number of matters, but two or three are as follows: the extent to which contact can take place between the Commission and a firm before the latter is selected for investigation, so that the firm knows the reasons for an investigation being consider; the need for consultations with the firm about the factual content of a report before it is finalised". If there is to be this degree of communication between the firm and the Commission, surely it follows logically that the reasons and the facts should be published. If they were published, it would give a degree of assurance to other companies that the inquiry had not been undertaken for frivolous or unnecessary reasons.

As the hon. Gentleman knows, there is a general degree of disquiet in British industry about these investigations, about the level of costs and about the degree of time and work that will be involved. If the hon. Gentleman undertakes to publish the reasons that we request in the two amendments, it will go a long way to calm down that degree of disquiet.

I end by reminding the right hon. Gentleman of an advertisement that appeared in a Peterborough evening newspaper last night. The right hon. Gentleman might not have had time to read it because he has been busy, but over a box number of the Peterborough evening newspaper there is an advertisement from an anonymous business man who says that he has spent the past 15 years building up his firm and that he is now so exasperated with the mountains of paper work that has been thrust on him by the Government that he wishes to give his business away free. He writes: Due to the extra work caused by continuous stupid Government legislation I am now more civil servant than businessman, a situation that is quite unacceptable and must end. In view of the fact that in these recessionary times it would probably be impossible to sell my company, I propose to give it away. The person to whom 1 give my company will require no capital or other financial outlay, merely the guts to walk in and take the opportunity of a lifetime. Basic qualifications are the preparedness to work 60 hours a week, some engineering or sales experience and a clear appreciation that no British Government will ever have any time for a small firm.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

It seems that the hon. Gentleman has all the qualifications to apply for the business.

Photo of Mr Timothy Renton Mr Timothy Renton , Mid Sussex

If that means that you are inviting me to apply for the Peterborough Hundreds, Mr. Deputy Speaker, I must take up the matter for considera- tion. The advertisement appeared in bona fides. It is a tragedy for British industry that such an advertisement should appear anywhere in the country.

The worry about the Price Code that I have mentioned is deep within British industry, and it is important that the two amendments to which we are now speaking are accepted by the Government.

Photo of Mr David Crouch Mr David Crouch , Canterbury

I make a short intervention in this short debate. I spent most of last night in the Library searching for the Peterborough newspaper but I did not find it. I wish that I had done so. I am glad that my hon. Friend the Member for Mid-Sussex (Mr. Renton) has drawn our attention to it. However, that is not the point that I wish to take up. My intervention is the first that I have made on Report and I hope that I may have the opportunity to make further interventions.

I was surprised that the Secretary of State reacted as he did to what has been described as a reasonable amendment—indeed, "eminently reasonable" by my hon. Friend the Member for East-leigh (Mr. Price). These are not merely reasonable amendments. In my opinion they are necessary amendments. I am surprised that the Government do not consider that they are necessary. They add something to the Bill; they do not take anything away. They add a restriction to be applied by Parliament on a new arm of the Executive that has emerged in recent years. In fact, many new arms of the Executive have arisen in recent years under both Administrations. We have commissions and various controlling bodies. All we are seeking in this debate is that these two amendments, which add a little extra restriction, be accepted, but the right hon. Gentleman seems to turn them down.

This is a necessary control on this arm of bureaucracy. I am not against bureaucracy, but I am in favour of controls on bureaucracy. It is strange that the Secretary of State does not think it necessary that the Price Commission should state its reasons in the first instance. If we are talking of case law and history and understanding the working of the Price Commission, surely industry wants to know what is in the mind of the Commission as it starts its new life. It would help if industry could see the standards on which the Commission is to work, the way it was being guided in its own councils, what is driving it to make interventions and to seek to call in a concern and establish an investigation into a price.

Unless we adopt an amendment such as this, we shall see more than just a glimpse of a corporate State emerging in this country. I should have thought that the Secretary of State would give thought to that. He has never been one to hang his hat on that type of institution. He is to some extent alone in the Labour Party in not wanting to see that happen. Therefore I am surprised that he has not welcomed this amendment.

The amendment is not merely reasonable. It seeks to provide a valuable addition to the clause saying that the Commission should state its reasons. Its reasons should be known. We need to know the reasons and the way in which the Commission will act. It is right that there should be this extra control and that it should be required to pause before it intervenes, and consider whether the reasons are sound and whether it dare state them.

Photo of Mr Kenneth Baker Mr Kenneth Baker , St Marylebone

I thank the Secretary of State for his courtesy in giving a longer reply to this debate than to the others. It is one of the longest that we have heard in this sitting. However, I do not believe that he answered many of the points which my hon. Friends and I put to him. Nor has he allayed the anxiety that will be felt in many large and small businesses when the new Price Commission operates.

The criteria which we have tried to firm up and establish, so that companies will know when their price increases are likely to be investigated, still remain vague and obscuring. One question remained unanswered. The Minister said that some matters are not capable of investigation. Will a company be investigated if it has increased its prices in the past three or six months, if it has increased its prices by 10 per cent, or 20 per cent, in the last period, if its profits have risen sharply, or if its profit margins have increased sharply? Will it be investigated if its investment programme is poor of if it has not entered into a planning agreement with the Government? Those remain areas of confusion.

We are trying to establish a set of precedents as case law so that companies may refer to them and say "If we do X we are likely to be investigated but if we do Y we are not likely to be investigated." The Minister refused to answer that point. Nor did he meet the point of my hon. Friend the Member for East-leigh (Mr. Price) who stressed the tremendous area of uncertainty which will be increased and intensified in British industry by not having these matters spelled out.

The evidence that my hon. Friend the Member for Mid-Sussex (Mr. Renton) adduced on the extra administrative burden that companies will bear as a result of the pre-notification procedures under the new Commission has not been adequately met. I ask the Minister specifically to look into the matter as the representations that we have received from substantial business companies indicate that their administrative costs under the new system will be greater than under the present system.

We all agree that in areas of imperfect competition there is a rôle for the Price Commission. One area where there is imperfect competition is the state of complacency in some parts of the House. Is that because the right hon. Gentleman has cornered the market in complacency? He complacently assured the House and asked us to leave matters in his hands, to his judgment. Few people have any confidence in either his hands or his judgment.

10.30 a.m.

The Secretary of State speaks as if he had a successful record in his Department. He has not. He has a dismal record, as he recognises himself, since hardly a week passes without his telling his friends in Fleet Street or any other wayside pulpit that his ambition is to leave his Department. He may rest assured that his ambition will be met not by elevation but by election.

Question put, That the amendment be made:—

The House divided: Ayes 212, Noes 242.

[For Division List No. 169, see c. 1635]

Question accordingly negatived.

10.45 a.m.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

I beg to move, That further consideration of the Bill be now adjourned. This is the second time during these proceedings when the Opposition have attempted to terminate them. We have now sat for 18 hours and debated 12 amendments. [Interruption.] That is about one and a half hours for each amendment, including voting time.

I should be interested to know whether the Secretary of State thinks that is an unusually—[Interruption.]

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

We have spent approximately one and a half hours debating each amendment, including voting time. I think that is a reasonable amount of progress to have made.

I think that at this point the Secretary of State should tell the House what his intentions are regarding this sitting. We have now been sitting for 18 hours without any indication from him and without any filibustering on the amendments. We should be pleased to hear what he thinks about progress of this nature and about reporting further progress.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I should like to make clear the fundamental point that I tried to make clear earlier in answer to the question about what progress we mean to make. The progress that we mean to make is clear. On 1st August, if the Bill has not passed through all its stages, there will be no price control in this country. We intend that there should be price control. [Interruption.] I repeat what I said at 3 o'clock this morning. When the House rises at the end of the week, some of us will take the opportunity of reminding the country how the Opposition have behaved. That means that we must proceed.

The hon. Member for Gloucester (Mrs. Oppenheim) asked how far and for how long we must proceed. I can give her a very clear answer. If, through the operation of what I understand to be the usual channels, there seems some reasonable prospect of the Bill leaving the House of Commons in time for it to go to the House of Lords and, if their Lordships so choose, for it to be returned here in order that we can have price control after 1st August, clearly many of my right hon. and hon. Friends, and me among them, will be delighted to go to bed. As things are, our duty to the policy that we support requires that we must go on—and go on we will. [Interruption.]

Several Hon. Members:

Several Hon. Members rose——

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. I think that we should conduct the business in a more peaceful fashion. After all, this is probably part of the House of Commons' contribution to the Jubilee celebrations.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

I rise to support the motion moved by my hon. Friend the Member for Gloucester (Mrs. Oppenheim). [Interruption.] I am surprised that the Secretary of State should have replied to a reasonable motion in such an arrogant fashion.

The right hon. Gentleman talked about getting through the House a piece of legislation to which the Government are committed. At no stage in his brief reply to my hon. Friend did the Secretary of State talk about the problems that this legislation would create for that sector of our country which produces the wealth upon which our prosperity and future are based. I refer, of course, to industry and commerce. Is it right that the interests of industry and commerce should be so sacrificed and that the House of Commons should consider legislation that is ill-drafted and to which the Government refuses to allow amendments? That is a sad situation.

If the Government are serious about their concern for the high level of unemployment they should be more understanding and give more sympathetic consideration to the reasonable amendments that are being moved by all parties on this side of the House. As my hon. Friend pointed out so well when she moved the first motion for the House to adjourn, we have not endeavoured to delay the passing of this legislation. [HON. MEMBERS: "You have not been here."] That last intervention from a sedentary position obviously came from hon. Members who have not been here, otherwise they would have seen me sitting in this place for a large proportion of the night. I have endeavoured to catch the eye of Mr. Deputy Speaker during the evening, but because of the excellent contributions from my hon. Friend the Member for Chingford (Mr. Tebbit) I have been unable to do so.

I took this opportunity of requesting the Government further to consider my hon. Friend's request that the House should adjourn. I do not believe the legislation can be adequately considered and scrutinised by hon. Members who have been debating for 18 hours and gone throughout the night without sleep.

My hon. Friend the Member for Cambridge (Mr. Rhodes James), in an excellent contribution during our earlier deliberations, quoted some examples of the ridiculous drafting of this legislation. There was no reply to those points from the Minister or the Secretary of State. I am tempted to ask my hon. Friend to intervene in my speech to draw attention yet again to the pathetic drafting of this legislation.

Photo of Cyril Smith Cyril Smith , Rochdale

Is that a threat or a promise?

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

Bearing in mind the sedentary intervention by the hon. Member for Rochdale (Mr. Smith), I am even more tempted to ask my hon. Friend to draw the attention of the House to some of the ridiculous drafting that we are passing because the Government refuse to accept any of the reasonable amendments that we are putting forward. [HON. MEMBERS: "Go to bed."] I have not been to bed tonight. I would sit up all night and every night to drive this pathetic Government out of office. [Interruption.] I am delighted that my contribution is receiving response from the Government Benches.

In the coming months, when unemployment climbs higher and higher as a result of the misguided policies of the present Government, Labour Members will find themselves accountable to the people of this country because they are creating unemployment. This legislation will add to that unemployment.

I make the plea that the House should adjourn so that the Government might give further consideration to the legislation because it is badly drafted. Some of our amendments might be acceptable to the Government if they gave further consideration to them. They have adopted their present attitude through pique in their determination, following the briefing that they have had from the Prime Minister that they must not concede anything and must get all their legislation through come hell or high water.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

The hon. Member for Luton, West (Mr. Sedgemore) has made a telling comment. He says that the legislation is going through—despite the fact that it is ill-drafted. That is not to the advantage of the House or to those who are seeking employment. If the legislation reaches the statute book in its present state, I am convinced that it will increase unemployment.

My hon. Friend the Member for Hove (Mr. Sainsbury) made an outstanding speech. His understanding of the food-processing and distributive trade is unmatched in the House. [Interruption.] If the noisy rabble on the Government side of the House were to read my hon. Friend's speech they would see that it contained much good sense. The people of this country are being sadly let down by this Government.

Photo of Mr Max Madden Mr Max Madden , Sowerby

On a point of order, Mr Deputy Speaker. Your low boredom threshold is well known. I wonder whether you would consider the remarks made by the hon. Member for Maccles-field (Mr. Winterton). He appears to be marshalling the same arguments as did his colleagues when this motion was moved earlier. I ask you, Mr. Deputy Speaker, to consider ruling the hon. Member out of order for tedious repetition or to accept that the motion be put to the House.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

I think that the Chair should make some allowance for the fact that hon. Members have not been to bed and that their contributions might not be up to their usual standard. I suggest that the hon. Member for Maccles-field (Mr. Winterton), instead of shouting at the top of his voice, should conserve his energies, because he has not been to bed.

Photo of Mr Tim Rathbone Mr Tim Rathbone , Lewes

On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Macclesfield (Mr. Winterton) is making good points which have not been appreciated by everyone because they were not here when they were made earlier. I ask you, Mr. Deputy Speaker, to request my hon. Friend to repeat his argument because it was difficult to hear what he was saying from where I am sitting.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

It does not seem a very friendly suggestion to the hon. Member for Macclesfield that he should start all over again. He will collapse completely.

11.0 a.m.

Several hon. Members:

Several hon. Members rose——

Photo of Sir John Hall Sir John Hall , Wycombe

On a point of order, Mr. Deputy Speaker——

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. Has the hon. Member for Macclesfield finished his remarks?

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Well, just a moment. I take it that we are now on points of order. I call the hon. Member for Wycombe (Sir J. Hall) on a point of order.

Photo of Sir John Hall Sir John Hall , Wycombe

The hon. Member who originally raised with you the point of order, Mr. Deputy Speaker—the hon. Member for Sowerby (Mr. Madden)—based it on the fact that my hon. Friend the Member for Macclesfield (Mr. Winterton) had been repeating statements that had been made previously. It will be within your recollecton, Mr. Deputy Speaker, and that of the House, that it is by no means unusual for hon. Members making speeches to repeat what has been said by other Members from time to time. Indeed, I have myself sat through a debate and heard the same speech, more or less, three or four times from both sides of the House. I have yet to hear, however, any hon. Member being called to order on that account. Therefore, it seems to me—and I am sure from your reaction to the original point of order that you agree, Mr. Deputy Speaker—that there is nothing that my hon. Friend has done which is in any way out of order.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

I shall rule upon that matter within the next 24 hours.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

I am grateful for the comments that you have just made, Mr. Deputy Speaker. However, I assure you that I have unlimited energy when it comes to opposing the present Administration. I should be happy—without any feeling of imminent collapse—to repeat the arguments that I have advanced to you in support of the motion before the House.

A moment or two ago I referred to the very strange drafting of this legislation. I put forward to you the proposition that the House should adjourn because the Government, in their present frame of mind, were totally unprepared and unwilling to consider reasoned amendments to improve the legislation.

I want to quote to the House the very excellent example given by my hon. Friend the Member for Cambridge. I refer to page 9 of the Bill and to Clause 6(4)(b). I should be very interested to hear from other hon. Members whether they can understand this: if the report relates to an increase"—

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. I am afraid that I must rule that the hon. Member must address himself to the question of the motion before the House. To start to go further and to deal with the drafting of the Bill is, in my opinion, strictly out of order.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

I have never, Mr. Deputy Speaker, challenged the Chair, and I do not—

Photo of Mr Ian Gow Mr Ian Gow , Eastbourne

On a point of order, Mr. Deputy Speaker. For the clarification of the House, will you please tell us what is the motion that we are debating?

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

With all the noise in the House, I did not think that hon. Members were sleeping in the Chamber. The hon. Member for Gloucester (Mrs. Oppenheim) read out her motion, and I repeated it. Now I am being asked what the motion is. It seems that there is a good case for adjourning if that is the situation.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

I am inclined entirely to agree with your last comment, Mr. Deputy Speaker.

I was saying that I have never challenged the Chair in the six years in which I have been a Member of this House. I do not intend to do that now. However, one of the reasons why I am supporting my hon. Friend the Member for Gloucester in requesting the Government to accept the motion is that the Government appear totally unwilling to see sense and to consider reasonable amendments. I believe that it would be right for them to be given a short period for reconsideration of some of the views that have been expressed by Opposition Members.

In advance of that proposition, I was quoting from the very Bill that we are considering. It will be a very short quotation. It reads as follows: if the report relates to an increase, a recommendation by the Commission as to whether the price"— [HON. MEMBERS: "Order."]

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. I shall not allow any quotation. If we were to adopt the practice that the hon. Member is now suggesting, every Bill that comes before the House could be subjected to the same sort of criticism, and hon. Members would move Adjournment motions to give the Government time to think. I ask the hon. Gentleman to confine himself to the strict terms of the motion before the House.

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

I fully accept your ruling, Mr. Deputy Speaker. I shall conclude my very brief comments by reiterating my support for my hon. Friend the Member for Gloucester, because I believe that the Bill has very far-reaching implications for commerce and industry. It is commerce and industry that produce the wealth of this country and provide the employment. The Government state—falsely, I believe—that they are seeking to reduce unemployment and to improve people's standard of living. I believe that this legislation is very damaging, both to people's chances of employment and to the prosperity of commerce and industry in Britain.

For that reason I believe that it is wrong for the House, with hon. Members exhausted or very tired after an all-night sitting—[Interruption.] Labour Members would not be bellowing as they are unless they were exhausted or tired. The House should now adjourn to allow this important legislation to be considered by people who are alert and who know what they are talking about and can tackle the Bill in the way in which it should be tackled, so that when it reaches the statute book—although I personally detest this legislation from start to finish—it will be as good as the House can possibly make it, and that when it goes to another place for consideration, their Lordships will not have too long a job to do.

I fully support the motion so briefly but eloquently put over by my hon. Friend.

Photo of Mr Michael McNair-Wilson Mr Michael McNair-Wilson , Newbury

On a point of order, Mr. Deputy Speaker. Have you been given any advice from the Government whether the Leader of the House will come and tell the House whether Questions are to be taken today? Are you aware that 57 hon. Members have tabled Questions to the Secretary of State for Transport and that there will be only one other occasion before the Summer Recess on which they will have a chance to question the Secretary of State for Transport? Has the Leader of the House given you any intimation whether it is the Government's intention to allow time for Questions this afternoon?

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

It is not the duty or any responsibility of the Leader of the House to tell the occupant of the Chair what the business is. All that the occupant of the Chair has to do is to discharge the Standing Orders of the House itself.

Photo of Mr Victor Goodhew Mr Victor Goodhew , St Albans

Further to that point of order, Mr. Deputy Speaker. It might be for the convenience of the House, and it might shorten the debate—which I am sure is what you want and what all hon. Members want—if the Secretary of State were to answer the question that has been posed about his intentions. We have asked him this question and he has not answered. He just says that he wants the Bill through all its stages by 1st August. That does not tell hon. Members whether Questions will be answered today, or whether they can attend luncheon engagements today. It tells us nothing. Surely the right hon. Gentleman could give some better information to the House.

Several Hon. Members:

Several Hon. Members rose——

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

I call the hon. Member for Rochdale (Mr. Smith).

Photo of Cyril Smith Cyril Smith , Rochdale

My intervention will be very brief, but it will at least be an intervention. I want to intervene, and not, unlike the hon. Member for Maccles-field (Mr. Winterton), because a Whip comes to me and says "Please will you speak?"

Photo of Nicholas Winterton Nicholas Winterton , Macclesfield

I wish to advise the hon. Member that, whether it is good or bad, I have a reputation in this House for not acceding to requests or demands from the Conservative Whips' Office. As I tried to make clear earlier, I have been endeavouring to catch Mr. Deputy Speaker's eye on many occasions during the debate that we have been having in the last 18 hours.

Photo of Cyril Smith Cyril Smith , Rochdale

I hope that this part of the debate on the Adjournment will not be a repetition of what happened at 3.30 this morning when we debated for a full hour about nothing. That is clearly to be the tactics of the Opposition once again—to spend a full hour about nothing. They are the same Opposition who say that they are concerned about prices in this country. It is clear, and it becomes clearer as the debate continues, that the Conservative Opposition do not wish to see any mechanism in this country for the control of prices. That is clear, and I hope that Labour MPs and certainly Members of my party will make this clear in their speeches. [HON. MEMBERS: "Where are they?"] Having said that, I appeal to you, Mr. Deputy Speaker, to accept the motion which I now seek to move, That the Question be now put.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

We shall go on just a little while longer.

Photo of Mr Marcus Kimball Mr Marcus Kimball , Gainsborough

I dare say that in considering this motion, Mr. Deputy Speaker, you are aware that the last occasion on which a sitting day ran on to another, when it was not a Thursday running into a Friday, was on 12th June 1951, on the Committee stage of the Finance Bill of that year. The Leader of the House is absent and cannot give us his guidance on this motion. We find ourselves in a difficult position, and the Leader of the House should be here to help us with guidance. When the business runs through from Thursday to Friday we are not faced with the problem of the Order Paper and Questions being lost.

For the first time for a long time I find myself having the second Question on the Order Paper. It is to ask the Secretary of State for Transport what representations he has had about the need to improve rural transport, which is nonexistent in my constituency. What is to happen to this Question? To have second place on the Order Paper and thus to be certain of getting one's Question answered is very valuable and I am reluctant to lose that valuable position through the Government's incompetence.

Will the 57 Questions mentioned by my hon. Friend the Member for Newbury (Mr. McNair-Wilson) take precedence on Wednesday 20th July when we have our next chance to question the Secretary of State for Transport? Will they be carried through from today or have we to struggle again in the queue, hoping to get second place to pin down the Secretary of State on a matter which is causing great concern throughout Lincolnshire?

The absence of the Leader of the House means that we cannot have guidance from him as to how he intends to handle that situation.

A previous Member for Gainsborough was a distinguished Leader of the House and never left the Chamber on these occasions. He was always here to help and advise the House and he would have been here at 10.55 a.m. to consider the motion which my hon. Friend the Member for Gloucester (Mrs. Oppenheim) moved. It would have helped us to deal with the problem. In view of the Questions which may be lost we should adjourn now so that the Leader of the House can be found and brought here to make a statement to explain how a situation which has not arisen since 12th June 1951 can be handled.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

To short-circuit any possible queries which the hon. Member has just addressed to the Chair I would tell him that the Standing Orders on the situtaion in which we find ourselves state that if we go beyond 2.30 p.m. with our business, all Questions are dropped and have to be put down again. Therefore, the situation is still open. We have not lost Wednesday's business and will not have lost it until 2.30 p.m. There is a lot of time to go yet and a lot of steam to be let off before 2.30 p.m.

11.15 a.m.

Photo of Mr Max Madden Mr Max Madden , Sowerby

We began consideration of this motion at 10.46 a.m. and this was the second attempt by the Opposition to terminate the debate. It has been extended unduly by their filibustering attack all through the night. Questions are endangered only by the actions of the Opposition and the solution is in their hands. The amendments which they have tabled can be withdrawn or not moved and today's business and questions secured.

I ask you, Mr. Deputy Speaker, as we have heard a number of speakers on this motion and as there is a general anxiety to proceed, and as the arguments being put are exactly the same as those put hours ago, to consider a motion to the effect that the Question be now put.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Mr. Deputy Speaker withheld his assent and declined then to put the Question.

Several Hon. Members:

Several Hon. Members rose——

Photo of Mr Walter Harrison Mr Walter Harrison , Wakefield

Mr. Walter Harrison rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House proceeded to a Division—

Photo of Hon. Tim Sainsbury Hon. Tim Sainsbury , Hove

(seated and covered): On a point of order, Mr. Deputy Speaker, you called me before that point of order was taken. I had the Floor.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. The position is that a closure motion can be accepted in mid-speech of any hon. Member.

Photo of Mr David Crouch Mr David Crouch , Canterbury

(seated and covered): On a point of order, Mr. Deputy Speaker. Further to your recent ruling about the continuance of business in the House up to 2.30 p.m., can you tell the House whether there is any intermission time—time to roll the wicket for example? If we go to 2.25 p.m., are we in danger of losing the business, or has it to be 2.30 p.m.?

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

So long as it does not override 2.30 p.m., the business for Wednesday stands.

The House having divided: Ayes 245, Noes 194.

[For Division List No. 170, see c. 1639]

Question accordingly agreed to.

Question put accordingly, That further consideration of the Bill, as amended, be now adjourned:—

The House divided: Ayes 197, Noes 251.

[For Division List No. 171, see c. 1643]

Question accordingly negatived.

Photo of Hon. Tim Sainsbury Hon. Tim Sainsbury , Hove

On a point of order, Mr. Deputy Speaker. I should be grateful for your guidance on the proceedings immediately prior to the acceptance of the closure motion, which was, so to speak, two Divisions ago.

As I recall the sequence of events, there was a Back-Bench motion to closure discussion which you were not inclined to accept. You called me to speak and I rose to my feet, but before I commenced to say anything a point of order was raised by the Government. It was a somewhat lengthy point of order, and, indeed, one began to think that it might be a speech. At the end of that point of order I rose to my feet, but before I had spoken you accepted a closure motion from the Government Front Bench.

I accept that that may be technically in order, but it seems to me that the rule which allows acceptance of a closure during an hon. Member's speech must be intended to prevent unnecessarily long-winded speeches. That was not the case in this instance.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

The position is clear. I was not prepared to accept a motion from a Back Bencher, but I accepted a motion from the Government Whip. When he moved that motion, I decided to accept it and to put the Question.

Photo of Mr Peter Rost Mr Peter Rost , Derbyshire South East

On a point of order, Mr. Deputy Speaker. As the Government have rejected the invitation to adjourn proceedings on the Bill, may I have your guidance as the protector of the interests of hon. Members? It is not just a matter of Question Time having to be abandoned by the Government's antics in this debate, but, far more important, there will be no opportunity for hon. Members to raise urgent matters this afternoon. You will be aware that the deadline for applications for Private Notice Questions is 12 noon. Hon. Members might wish to hear statements on urgent matters such as the siege at Willesden, the huge rise in unemployment figures or the breakdown in transatlantic communications.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. I think that I can short-circuit the hon. Gentleman's point of order. The facts he is relating are well known to every hon. Member. We are continuing Tuesday's business. We shall have lost Wednesday's business if this sitting goes beyond 2.30 p.m.

The position as the hon. Gentleman stated it is correct. If there is no Question Time, Private Notice Questions, which normally follow Question Time, cannot be dealt with during the proceedings on a Bill. Furthermore, it is not for hon. Members in points of order to challenge the Standing Orders of the House.

Photo of Mr Peter Rost Mr Peter Rost , Derbyshire South East

Further to that point of order, Mr. Deputy Speaker. I was not challenging your ruling in any way, nor was I challenging the Chair. I was seeking your guidance. As it is now clear that Private Notice Questions will not be acceptable today, nor, presumably, will applications under Standing Order No. 9, I seek your guidance. What remedies are available to hon. Members who have urgent matters which they wish to raise in the House?

11.45 a.m.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. It is not yet 12 o'clock and we do not know what may happen up to 2.29 p.m. Everything could by then be back to normal. The only advice I can give the hon. Gentleman is that he should seek to arrange for the matters he mentioned to be dealt with on Thursday—provided that we have finished with this Bill.

Photo of Mr Mike Thomas Mr Mike Thomas , Newcastle upon Tyne East

On a point of order, Mr. Deputy Speaker. Is it in order for the Opposition to raise points of order which abuse and waste the time of the House when they know that they have brought this situation upon themselves?

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

There is nothing that gives the Chair the power to refuse to take points of order, even though 99·9 per cent, of them may not be points of order.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

There is a point of grave concern to be considered, and it was referred to by the Prime Minister yesterday. He said that the Bermuda Agreement would be fixed by last night. The whole country and the House are concerned about this matter because it affects transatlantic travel. May I put this question to you, Sir? If Question Time is lost, is it possible for a Minister to come to the House to make a statement about the Bermuda Agreement?

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

That is a matter entirely for the Government.

Photo of Mr Michael McNair-Wilson Mr Michael McNair-Wilson , Newbury

On a point of order, Mr. Deputy Speaker. May I seek your guidance? If the Government were to adjourn their business by 2.30 p.m., they could then restart the business. They could begin with Questions and then continue with the Bill at 3.30 p.m. In that way, nothing need be lost to the House of Commons.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

That would be a possibility, but it is not for the Chair to rule whether it is or is not acceptable.

Photo of Mr David Crouch Mr David Crouch , Canterbury

On a point of order, Mr. Deputy Speaker. It is not open to us to question the Chair, and I shall not do so, but I hope that you will understand the surprise I felt in view of the short period of time which was allowed to debate the motion to consider adjourning the debate. I repeat that I am not challenging your ruling in any way. [HON. MEMBERS: "Oh."] It is not the duty of any hon. Member to curtail debate. It is the decision of the Chair. We had barely 27 minutes and six speakers, two of whom spoke formally. The Secretary of State responded formally to the formal moving of the closure by my hon. Friend the Member for Gloucester (Mrs. Oppenheim). We heard only some points, and they were all reasonable, sound and sensible. My hon. Friend the Member for Macclesfield (Mr. Winterton) made a serious point that the Bill needed redrafting.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. The hon. Member for Canterbury (Mr. Crouch) has said that he is not challenging the ruling of the Chair, but in fact he is doing so. I made the decision, for which I accept full responsibility, and I have no regrets for having taken it.

Photo of Mr David Crouch Mr David Crouch , Canterbury

I did not want to question the Chair but merely wanted to point out that when the Chair curtailed debate there were still four hon. Members who wanted to make points, and the Chair was not to know what were the points they wanted to make. I was upset that the debate on whether to adjourn was curtailed so soon, because we had heard some good reasons about why the debate should be adjourned. The hon. Member for Rochdale (Mr. Smith) said peremptorily that he wanted the debate to continue and that he did not want the motion approved—that was a fair comment—but we do not know what the other four hon. Members wanted to say.

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

There may be another 44 hon. Members wishing to speak, but that does not affect the situation. I take full responsibility. I did not create any precedents. I now appeal to hon. Members not to pursue points of order which are, in fact, not points of order, because they are prejudicing the chances of business being finished by 2.29 p.m.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

On a point of order, Mr. Deputy Speaker. When you replied to my hon. Friend the Member for Newbury (Mr. McNair-Wilson), you said that it was not impossible that the House might adjourn before 2.30 p.m. and that it would then be able to take Questions on transport. Are there any rules of the House or conventions that would prevent the Chair from taking another motion to adjourn the debate before 2.30 p.m?

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

There is a sort of unwritten rule about how we do this, and usually a closure motion is taken about once every seven hours. I cannot speak for my successor in the Chair, who will be here at 12.30 p.m.—and I shall be grateful to leave. However, if I were in the Chair it would be about six to seven hours before I accepted another motion to adjourn.

Photo of Mr Ian Gow Mr Ian Gow , Eastbourne

On a point of order, Mr. Deputy Speaker. On today's Order Paper there is a motion in the name of the hon. Member for Crewe (Mrs. Dunwoody). The motion asks That leave be given to bring in a Bill to prevent European Community legislation from coming into effect in the United Kingdom without the prior approval of the British Parliament, and to amend the European Community Act 1972 accordingly. Am I right in thinking that if we lose that motion today there will be no chance of its being moved again?

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

That is absolutely correct.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

I beg to move Amendment No. 18, in page 5, line 36, after 'increase' insert 'in excess of cost increases incurred since the previous price increase'. The interest and liveliness which have just been shown about a fundamental point during the last 45 minutes indicate that after 18 hours of debate on the Bill the Opposition are in thoroughly good heart. I must make clear to those who may think otherwise that my hon. Friend the Member for Gloucester (Mrs. Oppen-heim) and I, and the other hon. Members who served in Committee on the Bill, have the greatest possible interest in ensuring that the Bill is not enacted in a form that is deeply damaging in its effects upon employment, upon the viability of industry and upon certain sectors of the economy. We regard it as our duty to ensure that every amendment is carefully argued and that the facts and the pros and cons are weighed in order to ensure that we enact a Bill which has been substantially improved through its progress in the House.

The reason why the debate is being held over such a protracted period is that there were no concessions in Committee—although there were 16 tied votes—and that although the Government have made one or two modest concessions on Report there have been no major changes in the Bill.

Photo of Mr Max Madden Mr Max Madden , Sowerby

I am interested in that explanation. I believe that it is related to the Opposition's attempt to filibuster and their failure yet to win a vote.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

That cannot be sustained on either count. The Chair would have ruled us out of order if we had been filibustering, and if one considers the amendments that we have been debating during the long hours of the night one can have no doubt of their significance and importance.

Photo of Mr Max Madden Mr Max Madden , Sowerby

On a further point of order, Mr. Deputy Speaker. I apologise for rising to put yet another point of order, but as the attempt to kill the debate has been defeated by a substantial majority, and as we have been joined by the day shift of Tories against price controls, would the Chair consider it appropriate to appeal to the Opposition to limit their speeches in the knowledge that the Bill is supported by the House and the public who want price controls?

Photo of Mr Myer Galpern Mr Myer Galpern , Glasgow Shettleston

Order. That is typical of the device of points of order that are not points of order.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

No doubt the hon. Member for Sowerby (Mr. Madden) could have an election tomorrow if he wished. If he could find people to vote for him who regarded prices legislation as important and significant in its contribution to the level of prices in the shops, I should like to see them.

We regard Amendment No. 18 as of great importance, and I shall explain why. This portion of the Bill deals with the powers of investigation. The Price Commission will be entitled, having received an application, to set in train an investigation into that application if it so wishes in the light of the criteria set out in Clause 2 of the Bill. In consequence of that investigation being put in train, the price application must be frozen for 28 days and it can continue to be frozen for a further three-month period of investigation. There could then follow a period of four to six weeks in which the Commission could arrive at its report and make a recommendation to the Secretary of State. A period of six to eight weeks or more of price-freezing could be deeply damaging to companies, even though the application might have been made in good faith and the investigation might finally show that there was no reason why the increase should not be granted.

It must be noted that the principle upon which the clause operates is that those who make a price application will be presumed to be guilty until proved innocent. Equally, it will be noted that although there are control powers available—and I shall refer to them shortly—the period of five months or so could be one in which great damage was being done to the company which had made the application.

12 noon.

In Standing Committee we argued that there should be different procedures for handling price increases and applications, as well as for the price-freeze powers of the Commission. We sought to provide that if an application were made which satisfied the normal criteria and the Commission wished to investigate it, it should do so without a freeze being applied until the result of the investigation was known. If the investigation held that the application was faulty, the price could be rolled back and the consumer should get the benefit. The rolling back of prices has been introduced by the Government recently in respect of telephone charges. Many subscribers will be delighted to receive a £7 roll-back in October. This is a perfectly acceptable way of handling a case of excessive costs leading to excessive charges and of their being reduced in the price to the consumer. However, that procedure was not accepted. We still feel that a provision to freeze prices for as long as four or five months cannot be allowed to pass.

The amendment seeks to tackle the problem in a slightly different way. It provides that during an investigation in which it is proposed that the price should be frozen all costs incurred by the manufacturer or the operator of a service industry during that period should be allowed to be passed on. It is admitted that profit margins would remain the same. The costs incurred are, in most cases, outside the control of the applicant companies. The vast majority of companies to which the procedure applies would have removed the threat of a price freeze, and with that would go the removal of the threat to the viability of the company.

I cannot stress too strongly the likely consequences to a company of a substantial freeze. Labour Members think that prices can be turned on and off like taps, that they can be frozen or subsidised or that the mechanism can be interfered with to produce an illusion of price restraint. In every case where intervention takes the form of an artificial restraint, whether by subsidy or a freeze, two things happen. An artificial force is introduced into the market place, and at the end of the period different action has to be taken to restore the position.

The Government have lambasted their predecessors for intrefering with the price mechanism of nationalised undertakings. The subsidies to these industries are now being phased out. We applaud that fact, because there has to be a true relationship between the cost of a product or service and, allowing a fair profit margin, the price charged to the consumer. It is in restoring this balance in pricing policy that the amendment can make such an important contribution.

We know how the Commission will deal with most applications. We are told that it is likely to launch about 40 investigations a year. These are bound to be based on inadequate information, because if the Commission knew the pricing policy of the company concerned there would be no need for an investigation. We must assume that during an investigation a freeze could be imposed virtually at will and on a random basis in such a way that the company would have to hold down prices.

In the vast majority of cases there is little evidence that the pricing mechanisms of most competitive markets result in excessive profit or the consumer getting a bad deal on prices. This matter has been frequently referred to by Ministers, who have acknowledged that by and large the operation of the Price Code and the Commission has not resulted in a large number of defaulting British companies. We may assume that under the new régime there will be investigations on a random basis that will cause substantial freezing and dislocation of British industry and commerce.

Even with a freeze for as short a period as three months, it could take a full year to recover the profit margin lost during that time. The company could be put substantially at risk in terms of employment, investment and continued expansion of markets. Is this really an equitable or sensible way to proceed?

There is evidence to suggest that among the sectors that will be investigated is the manufacture and distribution of food products. I declare my interest in the food industry. Certainly facts have emerged in recent months about food prices. The publication of the Food and Drinks Industry Council shows the profitability of the major food-producing companies in terms of sales, historic cost profits and profits adjusted for inflation in 1976. The historic cost profits of these major companies, whose total turnovers exceeds £5 billion, is 4·11 per cent. for the third quarter and 4·23 per cent. for the fourth quarter. Adjusted for inflation, the figures are 0·21 per cent. and 009 per cent. respectively. This gives no indication of excessive profiteering in the food manufacturing sector. If there is a price freeze on food companies, they will go completely liquid in a very short time.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

On the figures that the hon. Gentleman has just quoted, the companies would fall within the safe- guards in relation to percentage turnover. It would be wrong for him to mislead the House. These companies would not be subject to harmful intervention because, on the figures that he gave, they would be protected by the safeguards.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

I recognise that the figures I quoted are within the safety margin, but the Minister of State knows that if we are discussing a freeze for a potential five months the question of safeguards and whether companies can survive is much more acute. The present proposals seriously reduce the profit safeguard levels obtaining even last year. A price freeze for four or five months could play havoc with the trading patterns of most major food-producing companies which have to rely considerably on commodity prices which fluctuate extremely widely.

The position is even worse for those who buy and sell seasonal products, whether they be seasonal consumer products, fresh products or gift-market products. The companies responsible for those products would obviously be at greater risk if their prices were to be frozen for as long as five months.

We consider it important that we find a way of allowing legitimate costs to be recovered to protect industry from unnecessary freezing when at the time the freeze is undertaken there is no evidence that it is fully justified. The Government must admit that the consequence of most price investigations will be that most prices are found to be satisfactory. That is the average run of industry today, and there is no reason to suppose that on 1st August the average performance of British industry will suddenly change.

If the result of investigations is that on average the prices that were applied were reasonable, surely we can argue that it is unreasonable that those prices should have been frozen for a period. If we also recognise that when it investigates the Commission will be largely determining the factors of profits and costs, I suggest that the costs factor is the one most likely to be accepted by the Commission. That is because it is usually the case that costs are levied upon a company from outside and are not of its own generation, except for internal costs which largely take the form of wage costs, which I am sure Labour Members would hardly wish to be the subject of a freeze.

We argue most strongly that it is necessary to amend the Bill to provide for the recovery of costs during the period of the price freeze.

I turn to the consequence of price-freezing not merely on applicant companies but on others. We have already had a debate on the consequences for smaller businesses of price investigations into a market leader. The House must be under no illusion that when a price freeze takes place on a market leader the Commission will largely be examining the larger companies with the larger brands and turnovers. We must bear in mind that a price increase in those circumstances will have a major effect upon the levels of all goods in a reasonably competitive market. If that it so, many other companies that are in no way affected by the direct investigation of the Commission will have their prices frozen. The consequence of that upon jobs, investment, cash flow and viability will be extremely severe.

The consequences of price-freezing could have a major disincentive effect on the very objectives that the Government seem to lose no opportunity of pronouncing from the roof-tops. They seek to suggest that they are desperately anxious to improve the trend in unemployment, which price-freezing will damage. They say that they are desperately anxious to see investment increase, and price-freezing will damage that. They seem to say at every turn that they wish to see more competitiveness and more effort put into British industry so as to generate products to sell overseas, and price-freezing will damage that.

From all those points of view, we believe that the Government are wrong to use a power that could put at risk large sectors of industry when there is insufficient evidence to show that that risk is justified. If a company had to produce what is virtually a potted investigation in advance, there might be a case for saying that the price freeze is a reasonable mechanism if it could be shown as a prima facie case that a price freeze was called for because the price application was out of order. However, as we understand the criteria under which the Commission will operate, it has general guidance under Clause 2 but a power at any time, if it has a price application. to decide to launch an investigation. The Secretary of State has the power to ask the Commission to intervene in that way.

12.15 p.m.

We are dealing with an open-ended danger which is poised at the heart of many industrial companies. What will be the position under this legislation? How will the Commission operate, and what are the safeguards that can be taken to try to maintain employment, investment and viability? We believe that the amendment offers such an opportunity. It would allow for the recovery of legitimate costs. It would allow the Commission to investigate profiteering, which we accept should be discouraged and investigated. However, it will not allow the Commission to freeze prices with totally damaging consequences. In that way it would make a substantial improvement to the Bill.

Even at this late stage, we hope most sincerely that the Government will agree that this is an amendment which should be considered and should become part of the Bill.

Photo of Mr Michael Shersby Mr Michael Shersby , Hillingdon Uxbridge

As my hon. Friend the Member for Pudsey (Mr. Shaw) has said, the amendment is intended to modify the power of the Commission to freeze a pre-notified price during investigation. As my hon. Friend has said, it is an amendment which is vital to the food and drink industries in particular. The industries have told me that they are concerned that they may be more subject to investigation than almost any other industry. That is because their prices are continually exposed to intense public scrutiny and interest.

I believe most hon. Members will agree that when we talk about price control we are talking most of the time about food price control, which is reasonable and understandable. The industries are in a situation in which their costs include commodities bought on the world markets and the prices of which are liable to be more extreme and more erratic than almost any others, thus making a three-month price freeze potentially extremely damaging as compared with its effect, for example, in the capital goods sectors. Moreover, the food and drink industries have a good reputation for their fair pricing policies. They are moderate, socially responsible and highly responsive to the competitive forces of the market place. That has been acknowledged in a number of the Minister's speeches.

The powers under the Bill to be granted to the Commission during investigation are such that it has been calculated that a three-month freeze could easily eliminate a year's profit. Such a loss could have an extremely harsh effect on firms engaged in seasonal trading. Consequently the amendment, if accepted, would provide the next best alternative to the roll-back system which my hon. Friend proposed in Committee but was not accepted.

Another important factor that the House should take into account in considering the amendment is industrial confidence. That is at stake, because under the provisions contained in the Bill any firm, however responsible or moderate in its pricing policy, could be subjected to investigation on notifying a price increase, however legitimate it might be. There is no protection in the Bill since the criteria are not entirely satisfactory. That is an issue that we have debated at considerable length in Committee and on Report. That is the main reason why the food industry regards the new proposals contained in the Bill as less desirable than the expiring code, with all its faults.

I must say for the expiring code that it provided certainty and a basis on which cash flow could be predicted, thus allowing investment to be planned. Under the Bill there will be no certainty whether an increase will be allowed since there will be no allowable cost provisions. Uncertainty whether an adequate interim increase will be granted during investigation if the increase is disallowed is another important factor that must be taken into account.

There is uncertainty about what the recommendation of the Commission and the decision of the Secretary of State will be up to five months after the pre-notification. That is causing uncertainty of great magnitude. As the Minister knows, it is that accumulation of uncertainty that can damage investment plans. We are moving the amendment because we wish to remove that uncertainty and remove damage to investment plans and to the prospects of greater employment in those industries.

It is all very well for Secretaries of State to say that industry must trust the Commission not to act unreasonably. I hope that the Minister is right. When I asked a Question of the Secretary of State on Monday, I welcomed the fact that he had announced the names of the Chairman and Deputy-Chairman of the Price Commission. I hope that the Commission will not act unreasonably. Certainly that is one of the key factors in the arrangements proposed in the Bill.

The amendment seeks to bring a greater degree of certainty to the operations of the Commission. If the amendment is accepted, the position will be that a firm selected for investigation will be allowed during the investigation period to charge a price to reflect at least the total additional costs incurred in respect of the product since the last authorised price increase. That would be a mandatory interim price increase during the investigation, and dating from the day the investigation was notified, to reflect total increased costs rather than to allow 80 per cent. of the base margin at the time of the last price increase over total costs. The costs would be listed by the firm when originally pre-notifying its increase and would be checked by the Commission during the investigation, so that there would be no possibility of their being incorrectly changed. Nor would there be any question of inequity to the consumer as it is extremely unlikely that the Commission, after investigation, would not recommend that all costs actually incurred should be allowed.

I believe that this amendment is one of the most important that we have debated during the Report stage of the Bill. It is important to the consumer and industry. We shall not hear any more nonsense of the kind we heard today in the House about Conservative Members wishing to prevent the Bill becoming law. On the contrary, we are here to discuss the detailed provisions of the Bill which were previously discussed in Committee, with the result that many Divisions were tied. It is not my intention to prevent the Bill becoming law. On the contrary, my intention is to see that we debate it properly and that we have an Act which is workable and which has the confidence of industry and the consumer.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

This is the first time I have spoken in the debate. I do so as I wish to address my remarks on the amendment to an industry which is of great significance to my constituency and to the future viability of the new town of Northampton. I wish to raise the question of the processed meat industry, which is greatly affected by the implications of the clause and would be substantially helped by the amendment. The problem for the processed meat industry is one of time and the relationship of movements in the prices of raw materials which make up between 50 per cent. and 70 per cent. of the finished article. Raw material prices are volatile and may move suddenly in a market situation.

I am not talking about a small industry. Its total turnover of controlled products is of the order of an estimated £515 million this year. The definition of "controlled product" was based on a survey of 20 companies' controlled results made by Messrs. Peat Marwick Mitchell & Co. The comparable figure in 1975 was £400 million. That gives an indication of the rate of inflation in this market.

The estimated profit on turnover is only 1 per cent. That is a tiny figure in relation to total turnover, as the Minister will concede. The comparable figure in 1975 was only 0·39 per cent. There has been a marginal increase in the viability of the local industry.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I ask the hon. Gentleman to express to those in Northampton who may be genuinely worried that, on those figures, they would be well protected and well within the safeguards published in the consultative document.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

I am grateful to the Minister.

On Friday I had a meeting in depth with the management of this major supplier, Telfers, which has a major factory. Its management is by no means satisfied that the safeguard provisions that the Minister mentioned are adequate in its situation. Indeed, my hon. Friend the Member for Pudsey (Mr. Shaw) explained in detail why there is still this worry.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

The House is interested in the way the Minister keeps referring to the safeguard levels. He says that the bulk of British industry is living on the supplementary benefit of a Price Code, whereas British industry should be earning a rate of profit sufficient to enable itself to invest and develop.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

That clarifies the situation.

I should like to explain the figures. The Minister may wish, through his officials, to approach the processed meat industry, and reassure it, if he thinks he can do so. However, I must develop the argument put to me by those who are experienced in the industry.

As the Minister keeps in contact with the market, he will recall that there was a 20 per cent. increase in prices last year. The forecast for the remainder of this year is that for pigmeat, which is substantially used in this industry for sausages and pork pies, we are talking in terms of a forecast 12 per cent. increase in raw material prices for beef, which is essentially used in burgers and similar products. Against that background, we must look at a 4 per cent. increase in application terms. This would amount, in terms of profit, to an increase in turnover of over £20·6 million and a loss of profit of £5·1 million, which on my figures would virtually wipe out the industry's profits.

There is concern over the delaying factor. Neither the industry nor I am clear whether the pre-notification system for sausages and pies will be maintained in future if the Bill becomes law. At the moment the industry is in a difficult situation, which needs clarification.

The Minister must be concerned about housewives. The average household has switched from red meat, which rocketed in price, to processed pork products such as sausages and meat pies. We anticipate that with the inevitable substantial increase in price there will be a further switch to burgers. The industry is confused and worried and needs reassurance and clarification. I should be grateful if the Minister would clarify its situation.

12.30 p.m.

Photo of Mr Anthony Durant Mr Anthony Durant , Reading North

I intervene for the first time on the Bill. I support the amendment on behalf of small businesses, which would have great difficulty in sustaining extra costs during a freeze of five months. One of their difficulties is cash flow, especially in the face of increased nationalised industry costs. The amendment does not derogate from the purposes of the Bill. It provides a safeguard, so that during the interim period a company can continue to pass on increased costs.

Without the amendment, debts will increase. Most companies spend a great deal of time getting money in for cash flow purposes; some employ someone just for that purpose. Six weeks' delay is common now in the payment of bills, and it will increase. That could be serious for a small company, perhaps with a running overdraft.

Many small companies make specialised products—we lead the world in this area—from specialised materials like copper, which fluctuate widely in price. They may have problems deciding when to purchase extra supplies. That is the sort of practical problem that small companies will face unless they can pass on these costs quickly.

There is a great lack of understanding in this place about the day-to-day problems of industry, which are tied up with the paying of bills. There is a constant problem of keeping the money coming in. A normal increase in pay, perhaps under an annual review, and even under the pay policy, might come during that period. The company will naturally wish to pay its staff, but it will face these difficulties. I urge the Minister to be sympathetic to the amendment.

Photo of Mr William Shelton Mr William Shelton , Lambeth Streatham

This is the first time I have intervened since yesterday. The amendment should be accepted. I agree with my hon. Friend the Member for Uxbridge (Mr. Shersby) that we do not want the Bill to fail. I do not believe that it will affect the rate of price increases. Over the last two or three years the present Commission has not achieved that, and the new one will not do so. The Secretary of State's words on that have been quoted. Nevertheless, while bargaining is going on towards stage 3 there must be some control of prices as a cosmetic operation, although little will be achieved.

If we accept the necessity for a Bill like this and accept the loss of our first amendment which attempted to limit its life, we must do all we can to reduce its damaging potential. The first area in which damage can be caused is that of confidence. The situation will be like a lottery. Industry will not know where the rifle is pointed, where the bullet will strike or which company will be hauled before the Price Commission. As one of my hon. Friends said, the wife of the Chairman might come back from shopping complaining about the price of a meat loaf, thereby sparking off an investigation.

The second area of potential damage is related to the amendment. A company whose prices are frozen unexpectedly, while its costs increase might not go bankrupt, but there would be one unacceptable consequence. If a market leader receives this treatment, all its smaller competitors, with perhaps a few per cent. of the market, will not be able to increase their prices above those of the market leader. Inevitably, the smaller companies will have to impose an involuntary freeze on themselves. If raw materials and wage costs increase, that may badly affect the finance of smaller companies.

The market leader will not go bankrupt, but even when its increases are granted—as we have seen, the great majority are granted—it will have lost what it needed to maintain its planned profitability. It will then almost inevitably have to cut back on investment in labour, research and development and plant—just what we desperately need to spur on the economy.

Labour Members stress the importance of investment. Unamended, much of the Bill will damage investment and confidence. We have said this time and again. I hope that we shall be proved wrong, but I fear that we shall not.

My next question springs from my not having been on the Standing Committee. It relates to the penalties which will apply should an order be contravened. I have studied the Bill but I cannot see where they are specified. However, I understand that penalties will be heavy if a company increases its prices because of increasing and unavoidable costs. That cannot be right if at the end of the day the price increase proves to be justified and is permitted.

This is analagous to the situation enshrined in our law, which has always seemed to me to be rather unfair, that if a man is accused of a crime and is found to be innocent he is in some cases expected to bear the costs. I am not a lawyer, but I have never understood why that should be. If a man is accused of a crime and the Crown has made a mistake and the jury finds the man innocent, why should he have to bear the costs of his defence? Similarly, if a company makes a price increase which is frozen but is eventually granted, in the meantime the company suffers and has no redress.

Finally, I repeat that the smaller companies which were unable to increase their prices above the market leader's prices, which were frozen, may face the far greater penalty of bankruptcy. This amendment, which will not create any fundamental change, will restore some of the confidence in industry which has been shaken by the Bill. I strongly support the amendment.

Photo of Mr Tim Rathbone Mr Tim Rathbone , Lewes

I intervene in the debate again to accentuate the point so ably made by my hon. Friend the Member for Reading, North (Mr. Durant) concerning small companies. I do so because the Minister gave the impression yesterday afternoon that he dismissed the effects of the Bill as a threat to small companies. I made the point, as did my hon. Friend the Member for Reading, North, that the real threat to the small business was as a supplier to rather than as a customer of big business. The Minister said that he did not mention that aspect because it was not raised in the debate. That is a statement of fact which is true. However, by not raising that aspect at the time the hon. Gentleman left the House with the impression that there was no threat, or only a minimal threat, to small businesses.

I remind the House of what my hon. Friend the Member for Gloucester (Mrs. Oppenheim) said on 11th October: one of the things of which we complain is the uneven effect of the code—and indeed that it is far more repressive in the case of some industries and businesses than in others."—[Official Report, 11th October 1976; Vol. 917. c. 181.] I reaccentuate that point now.

The amendment attempts to make it easier for small companies in particular to anticipate the needs of a fast-changing market situation—fast-changing because of competition form abroad. I cite par- ticularly the competition that we are expecting from Japanese manufacturers of sound systems, cassettes and radiograms, which represents a direct threat to Thorn Electrical Industries Ltd. in my constituency. But it is evolving even more because the Government have repeatedly led people to believe that the economic situation would be better than it has turned out.

12.45 p.m.

I do not need to remind the House of the optimistic projections of inflation made by the Chancellor of the Exchequer over the years—down to single figures by year end, down to single figures by the autumn, and down to single figures by year end yet again. Now we are not even down to single figures by year end. We are down to between 10 per cent. and 12 per cent. by the end of the year.

When a business is trying to work out its price structure to meet competition from other businesses, particularly other businesses abroad, and to enter into competition in foreign markets, it is virtually impossible for it to anticipate accurately the cost of its raw materials, especially if it has been misled by the Chancellor's projections. One of the unfortunate effects of the Bill is uncertainty on future corporate planning.

The amendment seeks in some small way to reduce that effect. It has no overall substantive effect on the principle of the Bill, but it seeks to make it much easier for companies to plan within the operation of the Bill.

If the amendment is not accepted by the Government, the clause will have another deleterious effect on business—namely, in not allowing anticipated cost increases to be accommodated quickly in price increases for the goods manufactured. Decisions to raise prices may be advanced to allow sufficient time for the additional cost of the raw materials to be incorporated in them. The amendment would meet that point to some degree if it were accepted.

I ask the Minister to apply his mind most carefully to the effect that the clause, unamended, will have on all kinds of businesses, but particularly on small businesses. I ask this because earlier he showed himself to be lacking in understanding about the effect on small businesses.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I resent slightly the remarks made at the end of the speech by the hon. Member for Lewes (Mr. Rathbone). I listened to four and a half hours of debate yesterday. I felt that I had a duty to the House to reply to the many points which were made in that time. I think that after that assiduous attendance I can hardly be expected to comment on a point which had not been made during that time.

In Standing Committee I said, and I repeat now, that we have no wish to change the viability, investment plans or employment opportunities created by any company.

In most cases—indeed, in all cases according to the criteria—costs incurred by an efficient firm will be recoverable. That is one of the items in the criteria. The Price Commission will have to pay regard to that criterion in selecting a price increase or firm, if it is a non-notifying firm, for investigation. It will have to bear that point in mind in considering whether to allow an interim price increase.

The debate relates to what more properly can be discussed in the context of safeguards. We do not feel that it is possible to build into the Bill, which moves away from cost increases, a safeguard based simply on costs. The amendment is defective in that it does not define costs. Indeed, the Price Commission would not know what costs were increasing during the course of an investigation. It could unknowingly expose firms to criminal proceedings because of the difficulty of interpretation of the word "costs", but we think that would be uncertain and unfair and would cause administrative chaos. Therefore, we have taken a different approach—the safeguard approach. In virtually every case that has been mentioned in the debate the firm would already be protected by the proposed safeguards in the consultative document. I hope that that is a reassurance.

Since there is to be a safeguard during the course of investigation of over 80 per cent. of the recent margins, a firm which makes a 10 per cent. margin on its product, if there is a price increase, would have to bear 2 per cent., at the most, of the increase in cost that takes place. With other safeguards, including those involving 2 per cent. on distribution, 3 per cent. on manufacturing and 10 per cent. on return on capital, that should give the House some reassurance.

I am prepared to go further, because I do not want to see damage done. Whilst I cannot undertake that all cost increases can be automatically allowed, I undertake, in formulating and discussing the safeguards, to consider carefully all the points made in the debate, particularly those relating to the food distribution industry. I hope that that will be taken as a genuine attempt to meet the fears which, in most cases, are unjustified. I hope that the House will not press me to go further at present.

The question of sausages and meat pies was raised. It made my mouth water. The exemption from pre-notification for sausages and meat pies will continue in the new notification order. I hope that that is reassuring

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

In contrast to the Undersecretary of State, the Minister of State made a sincere attempt to answer the question put to him in the first four and a half hours of the debate. It was the second four or five hours that were so unsatisfactory.

However, my anxieties are not altogether allayed by what the Minister said. The issue is one of considerable importance to the Opposition. It seems to us to be one of simple justice. There can be nothing closer to the heart of our concern than that. I hope that that concern is shared by other hon. Members. To judge from their lack of contribution to the debate it does not seem to be evident on the Labour Benches.

Mr. J. W. Rookcr:

On a point of order, Mr. Deputy Speaker. The public should not have to sit and listen to the hypocrisy of the Opposition. I spy strangers and ask you to clear the Galleries.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

If the hon. Member for Birmingham, Perry Barr (Mr. Rooker) persists with such a motion, I shall have to put it in accordance with the rules of the House.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

I beg to move, That strangers do withdraw.

Question, That strangers do withdraw, put and negatived.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Order. Will hon. Members kindly withdraw from the Chamber if they do not wish to participate in the debate? Mr. Neubert.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

As it was my speech that was so abruptly interrupted by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) may I say that I regard him as one of the last to——

Photo of Mr Tim Rathbone Mr Tim Rathbone , Lewes

On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Romford (Mr. Neubert) was described as a hypocrite before that motion was moved. Is that a parliamentary term?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

The Chair has no recollection of any direct accusation being made in those terms, which are, of course, unparliamentary. The Chair did not hear it.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

The hon. Member for Perry Barr is one of the last who should jump to that kind of manoeuvre. On the Second Reading of the Bill he made an important point about the powers residing in the Commission. He said: simply because my Government are proposing these powers, I do not necessarily accept that that is a good way to govern the country. The powers are much too wide. There is no accountability to this House and to the people's elected representatives. In the short time that I have been a Member of Parliament, I have seen more and more Bills corning forward giving a greater degree of discretion to Ministers. It is a trend which I do not like. I do not like the principle."—]Official Report, 27th April 1977; Vol. 930, c. 1321.] For the hon. Gentleman to interrupt proceedings within two minutes of my rising to my feet on what we regard as one of the most important issues in the Bill is reprehensible in the extreme, and although no direct reference was made to my speech I still think that it should not have been made in relation to the debate in general.

1.0 p.m.

I intend to speak to the amendment. It is a matter of simple justice to those who would be the subject of these random selected interventions by the newly-constituted Price Commission. It has already been indicated that in such circumstances the balance of advantage ought to lie not in favour of the Price Commission but in favour of the company to be investigated; in other words, that the company should not be regarded as having exceeded any of the criteria in the Bill until it is proved so by investigation and that it should not suffer by doing so—not the reverse.

To develop my argument I need to go back to the point about the Commission and the likely way in which it will go about its work, and the way in which companies will be selected and their activities and, in particular, their price increases, be subject to investigation.

As has been indicated by the Secretary of State, there is already a precommit-ment to 40 specific price increase investigations during the course of a year and some 10 sectoral surveys. That is already an advance on what might be expected, not just for this year but, as we have seen on the first amendment, for the years to come. There will, therefore, be a considerable number of these investigations undertaken. When one sees how easily they can be undertaken, one has natural apprehensions about how long they will take or how quickly they will be completed and how much damage will be done during the course of them.

When reference was made to this matter in Committee, I pointed out that the references already made to the Price Commission had been made on evidence which had appeared, in so far as public representations were concerned, to be fairly scanty—namely, letters to the Department and complaints made to Members of Parliament. I am not putting more than the bare face-value facts on that information. I quite understand that the Department and the Price Commission, and even the Minister, when coming to a conclusion that a price or an industry ought to be investigated, take into account not merely the simple factor of letters received from the public making complaint but wider issues, including their own knowledge of the industry, their observation of the price increases and the developing situation in that industry. None the less, I do not think that the evidence so far is altogether encouraging.

The Minister considers that he has scored some successes in the subjects that he has invited the Price Commission to investigate—but, to my mind, not very conclusively. Without going over one issue that has been discussed at some length, namely, television rental charges, I remind the House that in Committee we touched on funeral charges, which axe again subject to an investigation by the present Price Commission, which did not interfere with pricing policy while the investigation was undertaken.

However, the report of the Price Commission, as summarised in the latest quarterly report up to 28th February of this year, said that the Commission had found no evidence of the kind of abuse of funeral charges which had been so widely publicised in North America. While the cost of a funeral was a real burden on poorer people, funeral costs in this country were low compared with elsewhere. There was little or no complaint about standards of service; complaints related almost entirely to prices and pricing practices. That may lead people to think that there is, in some way, a question about the profits that are made. However, the report goes on to say, very fairly, For the smallest businesses, disclosed profits of funeral directors were usually no more than sufficient to provide the proprietors with a reasonable remuneration. But for the larger businesses, profits were generous, though not excessive. Profits of coffin manufacturers appeared to be very modest. The Commission were concerned at the steep rise in local authority charges; but most authorities still showed heavy losses on cemeteries and at best only marginal profits on crematoria. That is just one example of the results of investigation. If that investigation had been conducted under the new régime, the price increase charged by funeral directors would have been frozen.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I am sorry, but it would not have been frozen. There would have been a reference by the Secretary of State for sectoral examination. There would have been no freeze. One would have to act afterwards. I hope that the hon. Gentleman will try to come to order. I have tried to be helpful during the debate. What he is saying has nothing to do with the subject under discussion.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

It has indeed. I am not saying anything about sectoral examinations; I am talking about prices being investigated. Whether it is by price sector or individual company is neither here nor there; the issue is the same. Here was an investigation commissioned by the Price Commission, and it found no evidence of profiteering. Therefore, one ought to be extremely cautious in subjecting industry at large to this kind of investigation.

Perhaps I may come to the next matter, on which the results have been announced since we were in Committee—intruder alarms.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I am sorry to intervene again, but intruder alarms have nothing to do with price notifications. With respect, what the hon. Gentleman is saying is out of order. An examination taking place in such cases under the existing régime would need a reference by the Secretary of State, and under the new régime it could again take place only under reference by the Secretary of State. There would be no freeze. It has absolutely nothing to do with cost increases allowed during investigation.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

I think that the Minister is being—unwittingly, perhaps—too literal. I am trying to illustrate from incomplete evidence what the likely activities of the Commission may be. It may be that under the new régime an individual price increase for an individual intruder alarm will be sought. I am merely trying to illustrate the thinking and the likely motivation of the Price Commission by reference to the present régime. I know that they are not exactly comparable, but I am trying to give an indication of the care that should be taken to see that justice is done to those investigated.

Again, in the case of intruder alarms, it was also found that profits were not excessive and that fees and charges had generally increased in step with the Retail Price Index". If there were to be concern about the price of intruder alarms, the Price Commission would conduct an investigation, prices would be frozen and the company concerned would be in danger of suffering material damage by it.

There are two ways in which damage can be brought to the company involved in an investigation. The first is the potential damage to its reputation. The very fact that a company had been selected would do damage.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

This has nothing to do with cost increases during the course of the investigation.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

I leave you, Mr. Deputy Speaker, to judge whether my argument is exigent. To my mind, it most certainly is cogent, because we are discussing the potential damage done to a company through an investigation. If I am allowed to develop my argument and to come to the crux of it, perhaps the Minister will be able to understand more clearly than he does now the point that I am making.

There are two ways in which a company could be affected by an investigation. One of them is the potential effect to its reputation, which cannot be erased.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Order. The hon. Gentleman must relate his arguments specifically and closely to the question of cost increases since the previous price increase. It is very important that this should be done.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

I can do that straight away by saying that the second way in which the effect would have its impact on the company would be in material damage by the price freeze. The amendment seeks to provide that at least the company should be allowed to recover its unavoidable extra costs during the course of the freeze. We should have preferred very much that companies be safeguarded quite differently—that they should be accepted as innocent until proved guilty and should be allowed to carry through their price increases while they are being investigated. Then, if they are found to be excessive, they would be reversed by what is called, in the popular jargon of the day, the rollback procedure.

We examined this matter very deeply in Committee. It is an alternative for which we are arguing today, but not an altogether satisfactory alternative. Rollback would have ensured justice for the consumer. It would also have ensured justice for the producer being investigated. Only minimal justice is sought by this amendment, because it does not mean that the company investigated will recover its full price increase.

Although I questioned the Secretary of State closely on this in Committee he made clear that once a company is selected by this relatively arbitrary system—which I endeavoured to turn to at the beginning of my speech—it has no guarantee that it will recover what it lost as a result of being investigated.

Even that investigation could go on for one, four or five months and could come up with a clean bill of health, but the company would not recover 100 per cent. of what it lost by postponing its price increase. That is simple injustice, and we are arguing that at the very least it should not be pushed into a loss-making situation.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

The Minister of State said that that is what he said but he will forgive my scepticism after my having to listen to blatant attempts to ignore our points and after Ministers have taken no notice of our speeches and have read out almost the same answers as they did in Committee.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

I did not mention the Minister by name, but having heard Ministers making no attempt to respond to arguments or even to debate during this 21 to 22-hour session I am naturally sceptical that if we let this pass without challenge today no action will be taken to secure the valid point that we have made, which is merely that companies are subject to wildly fluctuating costs and if a particular period is chosen which is so critical to profitability in a key area, particularly if a company is involved in seasonal activities or in commodities on volatile world markets of which we have a classic current example, it should at least be assured that if will get its costs covered.

The Minister says that it is all part of the safeguards, but he will know that industry challenges the proposed safeguards in Clause 9 as not going anywhere near the safeguards that it has requested but being about two-thirds of what it now has.

Is it not simple justice, if a company is selected for a price investigation and even on investigation it is not found to be making excessive profits in charging the price, that after a month has elapsed it should recover all the loss? We have no help of recovering the full market value, but there is some hope of recovering all the costs incurred during a freeze. I hope that my hon. Friend the Member for Gloucester (Mrs. Oppenheim) will extract the necessary guarantees to make this watertight, because industry will be satisfied with nothing less.

1.15 p.m.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

I thought that it would be helpful for me to intervene now, and I do so because I see a genuine sign of the Minister trying to be helpful in dealing with this matter. It was notable that my hon. Friend the Member for Pudsey (Mr. Shaw) mentioned this. It is a consideration of which we have been very conscious on the question of roll-back, and, as the Minister has acknowledged, the people mostly concerned are in food manufacture. Cocoa, coffee and tea have shown commodity price increases of more than 100 per cent. in a year. Whereas it is true that forward buying enables extremes of these increases to be partially smoothed out, the actual increase in one month for a manufacturer can be 10 per cent. The proportion of these raw material costs is very high in the food industry, and the Minister will accept that a year's profit can be lost in one month and three years' profit can be lost in three months of an investigation.

It is true that a variation can be made during a period, but I submit that, where an 80 per cent. erosion safeguard is applicable during an investigation and commodity prices are rising at that rate based on May 1977, that will not be sufficient.

I understand that the point has been put to the Secretary of State, who told the Food and Drinks Industry Council that this would be equivalent to a 100 per cent. margin. No doubt he will correct me if I am wrong. Margins in the food manufacturing industry are very small. In 1976 the pre-tax profit as a percentage of sales was ·09 per cent. for 31 leading companies. Therefore, the Minister would clearly not want to see substantial further erosion of such profit margins in the event of an investigation and a rise in commodity prices coinciding with each other.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

That margin is still within the safeguards.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

Within the safety net? That is 80 per cent. of the margin and 10 per cent. a month.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I hope that the hon. Lady has read the consultative document. Apart from one speech at the beginning and two others to delay the Bill, this is the first speech of substance that she has made on it today. There are safeguards of 2 per cent. on distribution and 3 per cent. minimum on manufacture.

Photo of Mrs Sally Oppenheim Mrs Sally Oppenheim , Gloucester

I hope that the Minister will make that point in his speech. To my sorrow, I have read the consultative document and I have spoken on more than the occasions that the Minister mentioned. I moved the first amendment, and I shall be speaking considerably more from now on.

I hope that when the Minister is considering the safeguards—this is an important point relating mainly to safeguards—he will see the great importance of the points we have made, particularly about the coincidence of a priority price rise with an investigation. I should like to learn from the Minister that the undertaking which he has given is that he will consider this proposal for inclusion in the safeguards when they are published. If I am correct in thinking that that is what he said, can he confirm it? On that basis, I would seek leave to withdraw the amendment.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I cannot be precise in that undertaking. I indicated that cost increases could not be automatically allowed for, but I undertook to consider the points made and the question of safeguards. I have now to withdraw that statement in view of the long speech by the hon. Member for Romford (Mr. Neubert), which did not relate to the topic of the debate. He spoke about intruder alarms while the debate should have been about food distribution and manufacture.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

I am thoroughly confused. I raised the question of processed meat, which is part of the food industry. I understood that what the Minister said would satisfy my constituent, and that he would look seriously at the raw material situation and say what safeguards could be provided after an investigation. Am I to understand that the hon. Gentleman now totally withdraws that because we got into funeral parlours of some other country?

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I do not want to mislead the House. When I talk about points which have been raised, I exclude almost entirely the speech made by the hon. Member for Romford.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

Surely the Minister is not contriving to leave me in an invidious position. I was speaking to the amendment, which makes no special reference to the food industry but relates to the general principle of the recovery costs of all companies involved in an investigation. That is a perfectly proper statement to make and I hope that the Minister will reply to it.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

It is an issue to which I have already replied and on which the hon. Gentleman followed me.

In order that there shall be no dubiety in subsequent debates, I would make the point that the Food and Drink Industry Council intends to make further representations on the point about increases in costs, especially rapid changes in costs. It proposes to do this in the course of a consultation period on the safeguards which extends up to 15th July. We shall, of course, be glad to consider the matter further in the light of the council's supporting arguments and in the light of the points that have been made in this debate relating to the arguments that the Council will be putting forward in the discussion on the safeguards. What I do not want to do is to give the impression that I shall discuss the wider matter relating to funeral parlours and intruder alarms.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

The House will forgive me if I appear to be somewhat confused about how to reply to what the Minister has said. I initially formed the impression that he was genuinely seeking to state that, in view of the problems associated with food manufacturing companies in particular, he was seeking to pay genuine attention to them and in due time to cover them in the regulations which, no doubt, he will have to introduce in relation to price applications. If that is the case, my understanding is that it goes very far towards meeting what we sought to achieve—namely, that where there is clear evidence of allowable costs, which are allowed for in a company's trading position, the regulations under which applications may or may not be frozen will bear that in mind. I take that as being a genuine undertaking by the Government to allow the regulations at least to have a real chance of resolving this problem and that, where the case can be established, the prices will not be frozen during investigation in relation to the element of costs.

We obviously cannot discuss the other factors involved in the regulations because they are not germane to the amendment. In any case, it will be accepted that before the end of the consultation process the Minister is not in a position to discuss them in the House. In so far as we refer to costs, however, my understanding is that the matter of costs which accelerate during a period of investigation will find its way into the regulations. That would particularly allow the food companies to have some security. If that is the undertaking that the Minister gives, I think it is fair that we should withdraw the amendment.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I must be careful not to mislead the House. I did not give an undertaking that all these costs would find their way into the safeguards. I said that in the context of the food and drink industry we would simply consider the point which has been put forward seriously and sincerely. That is the undertaking I give.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

I respect the Minister's comments, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Mr Geoffrey Dodsworth Mr Geoffrey Dodsworth , South West Hertfordshire

I beg to move Amendment No. 64, in page 6, line 2, at end insert: 'Any such notice as may be given by the Secretary of State pursuant to this subsection shall be laid before the House of Commons in the form of a Statutory Instrument, and shall be subject to annulment by a resolution of that House'. The subject matter of the amendment is familiar to the House, and to hon. Members who served on the Committee, as a matter of principle. But I felt it proper that on a matter of such significance as the operation of the veto powers we should ventilate the question of the exercise of those powers subject to parliamentary authority. During the Committee stage, there were two interesting debates on this clause with regard to two different amendments. One amendment sought to delete the actual authority itself due to the suspicion of a number of hon. Members about whether it was safe to place such powers in an unlimited form in the hands of the Secretary of State.

The Secretary of State referred to the problem of the negative procedure solution during that debate. I recognise the difficulties that he outlined during those proceedings. He said that if there is a freeze, the investigation is suspended and three weeks later the House of Commons might debate a negative resolution and overrule his decision. As I understand the problem, that puts the position quite fairly.

However, I do not feel that it overrides the need for parliamentary control and authority.

Although it is a difficult situation, I do not think that it is beyond the wit of my hon. Friends, or indeed Labour Members, to resolve that matter. That part of the proceedings in the Standing Committee was more concerned with the Secretary of State's power to delete or veto investigations and more concerned about special representations that may be made on behalf of substantial companies in the private sector.

However, there was a further debate on the same point but framed in a different form. An amendment was proposed by my hon. Friend the Member for Gloucester (Mrs. Oppenheim) to accept the veto powers in the case of the nationalised industries. That matter gives me some cause for concern. We have some clues about the Minister's intentions. During the Committee stage a number of references were made in various parts of the discussions about parliamentary control and about the furore and excitement there would be if the Secretary of State exercised powers which were beyond the spirit and intention of the House. That is how I understood the terms of that debate and the substance of it.

But the fact is that the suggestions made relate more to statements being made in the House and to Question Time itself. We are all very familiar with the problems that arise over the tabling of Questions about nationalised industries. When we look at the current record of the nationalised industries, we see that Parliament is failing in its duty to exercise authority in an area where it has public responsibility. It is not enough for the Government or Parliament to say that a nationalised industry is not a matter with which we should concern ourselves. Parliament has to grasp this nettle. It must look at other mechanisms. But that would fall outside the terms of the amendment.

During the course of these discussions, there was an earnest consideration of the affirmative order procedure. That was debated at length. There was some discussion on the negative procedure. I feel that in proposing an amendment of this sort we should be able to ensure that a mechanism exists for Members of this House to highlight discussions if they feel the need to do so. The original consultative document "A New Prices Policy" says under the heading "Investigations": The Government therefore propose to strengthen the investigatory system as a central part of the new policy. Their objective is to establish a strong but flexible instrument within their overall prices policy, preserving a balance with the other objectives of economic policy including the industrial strategy.The Government's proposal is a policy of price control within which the Secretary of State would have well defined powers to act in the cases of price rises which are unreasonable or prices which are unjustified. The chief characteristics of the new approach are:—all prices and all enterprises would come within the scope of the new policy …". The Secretary of State and his colleagues went to great lengths to argue that these are all-embracing powers with no special exceptions. However the document goes on: … subject to certain exceptions to be specified by order, (eg. coal and steel prices). The number of exceptions would not be large; In these circumstances, it is surprising that we are asked to rely on the veto. There would be a parliamentary furore and excitement in this House——

1.30 p.m.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

We have now said on no fewer than five occasions that the examples which the hon. Member gives of the special exceptions are classed as such because we have obligations under the Treaty of Paris. Those obligations do not give this House, the Government or any agent of the Government the right to determine prices. Therefore, by definition, these are special cases. I wonder how many more times I shall have to say it before the hon. Member understands. Also, this is absolutely nothing to do with exercising the veto.

Photo of Mr Geoffrey Dodsworth Mr Geoffrey Dodsworth , South West Hertfordshire

I am obliged to the Minister, and I understand him. But I am seeking to apply an amendment to the Bill which I thought—although the Secretary of State obviously doubts it—would give the House an opportunity of exercising its authority. I fully take the point about certain prices being covered by the ECSC. However, we have an overall responsibility for the nationalised industries and we should assert our rights to take part in any discussion on any veto and on whether there should be any exclusions.

We have heard some of the problems of consultation that might arise with the sponsoring departments. That would be regretted. Especially regrettable would be the possibility of creating suspicion in the minds of hon. Members. We see clearly that prices in the nationalised industries have not been under control, and I have heard repeatedly the explanation given by the Government that they had to recover from the stability of prices within the nationalised industries, and the fact that this was not consistent with the proper economic operation of those industries.

If one examines the indices of all items and compares them with those of December 1973, taking 100 as the base rate, the average has increased to 172. Coke and coal prices have increased to 192, gas to 160—and we have had a very clear illustration of the problems of controlling gas prices and we find that authority rested nowhere at all, other than in terms of political manoeuvre. Electricity prices have increased from 100 to 221 and Post Office charges to 202. All this is a sign and symptom of the state of concern to which we must address ourselves.

While I accept any reflection that the Secretary of State may cast on the form of the amendment, I am quite clear that in this House we have an obligation constantly to address ourselves to this problem. It is not enough for the Secretary of State to tell us that we must trust him or that we have got it all wrong. We must debate it, and that is my purpose in moving this amendment.

I think that we should move towards new means and mechanisms of control. The opportunity to detail that is not available to me today, but the number of amendments that I have tried to table are designed to look at the whole question of public accountability. Other matters are ventilated by document or debate, but these are our obligations in this House. If there is not proper publication of draft orders and documents, the House and the public will not know, and on that basis I have tabled this amendment.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Before I talk about the amendment itself I want to clear up one point that has been repeated throughout the debates, and most recently by the proposer of Amendment No. 16, who is apparently not on the afternoon shift. Hon. Members seem to believe that the Bill is based on a principle of "Trust me". It is not. It is based on the principle of "Trust the Price Commission". In order to meet the anxieties of industry we deliberately excluded the idea that any Government, let alone this Government, should be trusted. Therefore, we built in an element of trust around the Price Commission.

The hon. Member for Hertfordshire, South-West (Mr. Dodsworth) continually confused two different items in the Bill. One part of the Bill enables certain commodities to be excluded from the powers. The example he quoted was iron and steel. As I have said, that is excluded for legal reasons. There are other things which are excluded because by their very nature they are not susceptible to price notification and examination. I emphasise to hon. Members that the veto power does not concern things that are excluded from the Bill; it relates to the way in which we treat things which, by definition are within the terms of the Bill. Therefore, only about half of what the hon. Member said is even remotely concerned with the Bill.

I understand the suspicions that arise in the minds of hon. Members. On Second Reading, when I talked about exercising the veto I used the magic phantom words "planning agreements". I know the kind of feeling which they arouse on the Conservative Benches. But there is nothing sinister about the veto. I am sure that it will not be used very frequently, and if it is it will be a cause célèbre. Knowing the nature of the Price Commission, the idea of the Secretary of State of the day publicly announcing that while the Commission had begun an investigation the Government were preventing it from continuing, would be absolutely extraordinary. I cannot imagine the Price Commission that I have appointed under the chairmanship that I have named acting in such a manner as to require me to use that extraordinary fail-safe protection.

Hon. Members on the Opposition Benches may speculate about these fantasies, but the acceptance of the amendment would be deeply damaging to industry, so much so that, having described the damage that would be done during our Committee stage debates, I wonder why the Opposition thought it necessary to put down a similar amendment with the same basic disadvantage for industry.

The Price Commission would begin en investigation and would either bring about a freeze or refuse to allow the full price increase. In these extraordinary and exceptional circumstances envisaged, because I believed that the Commission had acted in an arbitrary and damaging way, I would veto the process. I suspect that if I did so some Conservatives would be cheering more loudly than all others. If this amendment were carried, industry would not be certain that my veto would spare it from the ravages of the phantom Price Commission. It would have to wait 40 days to see whether the House of Commons was prepared to allow me to protect industry or whether it would remove my power of protection.

This point, as we made clear in Committee, was so against industrial interests that we wondered why the provision was tabled again. I am not so irresponsible as to say to the hon. Gentleman "Carry it if you can", because it is very much in industry's interests that we should not allow it to be damaged by the kind of uncertainty contained in the amendment.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

The Secretary of State endeavoured to treat us with sweet reason at the beginning of his remarks, but he ended up by being completely scathing.

I welcome the initiative displayed by my hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth) in tabling the amendment, because he has a consistent record of seeking to probe the accountability of the Executive, and in particular the nationalised industries, to this House.

The right hon. Gentleman would claim that one of the attractive features of the Bill is that it brought nationalised industries into the same régime as private enterprise bodies for the first time in this respect. If the Secretary of State wonders why we are so concerned about this point and why so much time has been taken in debating the matter thoroughly, as it deserves to be, I must tell him that it flows from the fact that the Government yesterday afternoon did not accept the first amendment. That would have given us an opportunity to review the powers and activities of the Price Commission at the end of the year and at yearly intervals thereafter. We have been obliged to consider all those proposals in the context of a permanent Price Commission which is being established from now for all time.

These issues of accountability are of the greatest importance. The Secretary of State claimed that he did not need to proclaim his widely known honesty and integrity because it was a case of trusting the Price Commission. But only a month or so ago there was a proposal in the Bill for the right hon. Gentleman to have power to initiate price investigations. That was abandoned, following an adverse reaction. However, I believe that my hon. Friend has every right to be alarmed at what is proposed and at the fact that the veto will still exist, whether or not investigations continue.

There is recent evidence to back the reasonableness of our amendment on the subject of the nationalised industries. On that subject I do not think we would press very hard the argument that the Minister might seek to exercise the veto and revert to other objectives, such as planning agreements. We have a doubt about the possibility of the Minister's failing to veto an investigation into the nationalised industries. We have had a recent example of this in the 10 per cent. increase in gas prices from 1st April. That was condemned by the Price Commission as not coming within the code but by the use of ministerial power that increase was imposed on the gas industry. If, in comparable circumstances, the Price Commission proposed such an investigation and the Secretary of State vetoed an increase, we would regard that matter as sufficiently important to justify the exertion of pressure in the House of Commons by one or other of the procedures available—for example, that which is proposed in the amendment.

1.45 p.m.

The House has had no opportunity to debate that issue, yet it is an important issue of principle. The Secretary of State, with the aid of powers given to him by the legislation, was able to establish an important principle. There has been no opportunity, other than by questions, to raise the matter in the House. It came up at the end of March when, suddenly, the Government and the Opposition faced an imminent General Election. There was a vote of confidence and the opportunity to debate that price increase was lost. Therefore, we are grateful to my hon. Friend for tabling this amendment and for giving us an opportunity to discuss this subject.

Another matter that is still pending is the commissioning of the Drax B power station in advance of the electricity generating industry's needs. There may be a conflict between Government objectives and the direct and immediate consumer interest, and the Secretary of State may have to exercise his veto. Although what was proposed was an outlandish and remote possibility, there have been recent situations in which the Secretary of State might have chosen to exercise his veto. There is grave concern about the accountability to this House of the Executive's actions. Since it is proper to probe the relative rôles of Parliament and the Executive, we welcome the opportunity that discussion of this amendment has given to debate these issues.

Photo of Mr Tim Smith Mr Tim Smith , Ashfield

My hon. Friend the Member for Romford (Mr. Neubert) was right to imply that a constitutional issue of some importance is at stake on this amendment. Following the Tameside and Laker Skytrain cases, it is clear that the Secretary of State's decision is not subject to review by the House of Commons.

I accept that the amendment does not perhaps provide the most satisfactory way of a decision to be reviewed. The decision would be subject to review by the courts. This power would probably be used on only rare occasions, and I do not see how the amendment would damage industry.

The 40-day period involving a resolution of the House would take up less time than a court action which could take a number of months to decide. The power given to the Price Commission in Clause 1 clearly is subject to review in the courts, and that matter has been established in this debate. Indeed, that is clear from the criteria set out in subsection (2). It is clear that the discretion is open to challenge.

The power of veto is described in Clause 4(3): If the Secretary of State considers that an increase in respect of which he has received such a notification should not be the subject of an investigation it will be his decision. No criteria are laid down on how he should reach that decision.

It could be argued that if a decision were overridden there would be a veto as a last word. I go along with what was said by my hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth) in proposing the additional powers and review by the House. I support the amendment.

Photo of Mr Geoffrey Dodsworth Mr Geoffrey Dodsworth , South West Hertfordshire

I am obliged for this opportunity to respond briefly to the debate. The doubts that I expressed earlier, which are the basis of my amendment, obviously are shared by many hon. Members on both sides of the House. I have in mind what was said by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on Second Reading, on the subject of parliamentary control. He said: After this Bill is on the statute book and we have conned the country into thinking that we have toughened up price control, the Treasury may decide to tell the Post Office to put another 1p or 2p on the price of a stamp in order to cut down the borrowing of the Post Office. The Price Commission will not have a chance to conduct an investigation. It will be cut out straight away by the Minister."—[Official Report, 27th April 1977; Vol. 930, c. 1321.] That may be unthinkable to the Minister, but apparently it is not unthinkable to one of his hon. Friends.

In the debate in Committee amendments were withdrawn at that stage, or were not pressed, but we expected the Secretary of State to bring forward an amendment on Report to clarify the point. I feel that these matters have now been fully canvassed and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

I beg to move Amendment No. 20, in page 6, line 7, leave out 'may if they think fit' and insert 'shall'.

This amendment was discussed—and there was a tie in the vote on it—in Committee. It concerns the situation that would arise when a company making a price application which was the subject of consideration and investigation by the Commission withdrew its application. It is our contention that when a price application is withdrawn the need for investigation should also be withdrawn. However, the Bill as now drafted in Clause 4(4) allows the matter to be the subject of discussion and consideration by the Commission. I remind hon. Members of the wording of Clause 4(4): If, after a notification in pursuance of subsection (1) of this section has been given in respect of an increase, the relevant person gives notice to the Commission stating that he withdraws the notice of the increase in consequence of which the notification was given, the Commission may if they think fit give to the Secretary of State a notice cancelling the notification. In our view the withdrawal of the price application should carry with it a mandatory requirement that the Commission should cease its investigation. The Minister said in Standing Committee that he did not believe that the Price Commission would continue with an investigation when the application for a price increase had been withdrawn. The Minister said that in good faith. However, at this stage of the game we have no idea how well the Price Commission will operate. It is just as necessary that we should write such a simple requirement into the Bill so that there will be no doubt that the Commission should operate in this way.

There has been a tendency—and this has been exemplified by some of the Secretary of State's remarks in previous debates—to leave everything to the Commission. The Minister took that view when it was suggested that we might be leaving too much to him. It is part of our intention that although the Government are forcing the Bill through, the Bill will not pass finally into law without our making it clear that the Commission is given the correct guidance as to how it should behave and a guideline to its activities. None of the guidance that the House gives is more important than in the matter of the investigatory powers of a prices application.

It is therefore appropriate to put the amendment before the House again, and, hopefully, to seek agreement from the Government so that we can right the Bill and obtain this small concession. That would have the effect of making it clear to companies that one way of stopping the application—and many hon. Members may think that this view is desirable—would be by withdrawing the cause of such an investigation. I believe that I am in order in separating investigations of price applications from other kinds of investigation. I propose the amendment in the knowledge that it was nearly accepted in Committee and that the Minister feels that this is the way in which the Price Commission should operate. I hope that he will accept the amendment.

Photo of Mr Michael Morris Mr Michael Morris , Northampton South

I should like to draw an analogy between the Price Commission and other kinds of commission. We have withdrawn the discretionary powers of the New Towns Commission and made them mandatory.

The Minister may believe that it would be fairly exceptional for a price application connected with food to be withdrawn. However, there was the internal situation on the coffee market where there was a 60 per cent. rise in coffee prices in one week. If we look back at the coffee market it is possible to recall that a few years ago there was a sudden turn-round in that market. We hope that that will happen again.

The Minister must know that it is in an enormous disruption for any company to have the Price Commission descend upon it. No industry lightly enters into allowing that to happen, and therefore it is only fair that if the company decides to withdraw its price increase application in order to hold off and reconsider the situation, it should know that the result of that decision will be a withdrawal by the Price Commission and not investigation. Companies need to have a degree of certainty. I therefore hope that the Minister will accept the amendment.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

The point is fairly narrow but first I must withdraw something that I said in Committee. I suggested that there might be circumstances in which a company could withdraw an application and then submit another immediately. That is extremely hypothetical and I wish to withdraw any suggestion that I made in Committee that the average category 1 and 2 firm would do any such thing. It was purely hypothetical. If a company made an application for a price increase and then, while the investigation was in train, withdrew the price increase, it is likely that the Commission would have to consider the criteria in Clause 2 in deciding not only whether to initiate the investigation but whether to terminate it. There is a duty upon the Commission to consider the criteria in relation to the permanence of the investigation as well as to common sense. It is likely that it could be a duty upon the Price Commission, if the criteria under Clauses 2 and 3 were being fulfilled, to end the investigation.

I have searched my mind, and there is no one convincing example that I can give about whether it might be in the interest of the Commission to continue and to publish its report. In many cases the Commission will want to husband resources carefully and will not consider it possible to continue investigations where price increase applications have been withdrawn. However, it may be that at the end of an inquiry into a price increase the Commission will decide that it is in the public interest—because a great deal of investigation has been carried out—to continue the investigation. On the other hand, one must husband the resources of the Commission carefully, and there may be some value, if the inquiry has gone as far as the report being produced in draft, for the report to be published even if it could do no more than reassure the public. In most cases I assume that the Commission would terminate its report and that it would have a duty to do that.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

I welcome the Minister's reconsideration of the views that he expressed in Committee. We consider it timely and we feel that his remark in Committee was rather neurotic. The Minister now agrees on that. The Price Commission must be able to trust category 1 and 2 companies to act responsibly in such matters. Certainly the sanction of public opinion when the issue received publicity would be sufficient to warn off any such company.

We are not sufficiently reassured by what the Minister has said. The price application is the trigger that gives rise to the investigation, and if a company withdraws an application for an increased price, it should be left to get on with its business.

Question put, That the amendment be made:—

The House divided: Ayes 194, Noes 240.

[For Division List No. 172, see c. 1647]

Question accordingly negatived.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

On a point of order, Mr. Deputy Speaker. You will know that a number of applications have been made to you or your predecessors in the Chair on the possible adjournment of the debate, principally in the context of the business for Wednesday, which we are not likely to reach. I understand that there is a procedural reason why the Chair should not receive a motion to adjourn for the purpose of allowing the House to proceed to Transport Questions. You will know, Mr. Deputy Speaker, that 57 hon. Members have tabled Questions on transport matters, and I feel sure that the Government must be anxious to reveal some of the secrets about their transport policy. In the belief that the Government must be anxious to accommodate the House and to answer some at least of the 57 Questions, will you advise us whether you would be prepared now to receive a motion from the Government to adjourn the debate so that the House may proceed at 2.30 to take Transport Questions?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

I take note of what the hon. Gentleman has said, but a dilatory motion was moved and debated for a reasonable period. The Chair is not prepared to accept such a motion at the present moment.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

Further to that point of order, Mr. Deputy Speaker. Naturally, I accept what you say, but I do not think that the House would necessarily agree that a reasonable amount of time was provided on that occasion.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Order. That is entirely for the discretion of the Chair.

Photo of Mr Roger Moate Mr Roger Moate , Faversham

I understand that the motion was debated some three hours ago and that under the normal convention of the House this would be a reasonable time to make a further submission. I am asking whether the Government might be given the opportunity of moving a motion now. If they are concerned about Transport Questions, surely they will move such a motion.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

That is entirely a matter for the Government and not for the Chair.

Photo of Mr Michael McNair-Wilson Mr Michael McNair-Wilson , Newbury

On a point of order, Mr. Deputy Speaker. Is it not remarkable that throughout the whole of last night the Leader of the House appears to have voted but to have resisted coming into the Chamber, thereby denying the House of the benefit of his advice and leaving it uninformed of the Government's intention?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

That is not a matter for the Chair.

Photo of Mr Robert Adley Mr Robert Adley , Christchurch and Lymington

Further to that point of order, Mr. Deputy Speaker. It will be within your knowledge that the lengthy negotiations over the Bermuda Agreement have been concluded in the early hours of today. My understanding of the position of the Department of Trade is that the Secretary of State would welcome an opportunity to make a statement. I have consulted Mr. Speaker's Office and it appears that there is no way in which any contingency could be met by way of a statement in the light of the Government's intransigence. If it is not possible on this occasion for the Secretary of State to make an important statement, would I be in order in asking you, Mr. Deputy Speaker——

2.15 p.m.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Order. I understand the hon. Gentleman to say that he has consulted Mr. Speaker's Office. No doubt he will receive a reply from Mr. Speaker in due course.

Several Hon. Members:

Several Hon. Members rose——

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Order. There have been a number of attempts by the Minister to rise. I do not know whether he desires to do so in connection with this question or whether he wishes to proceed with the business.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I simply want to get on with having a form of price con- trol in this country. I do not know whether I am now permitted to do so.

Photo of Mr Anthony Fell Mr Anthony Fell , Yarmouth

On a point of order, Mr. Deputy Speaker. I think that the House is in a difficulty. It has been treated in the most extraordinary way by the Leader of the House. We now have only 12 minutes to half-past two, after which the Leader of the House cannot say anything to the House by way of a statement or anything else. It is extraordinary that the Leader of the House should so obviously absent himself from the House, thus not serving the position that he should hold—namely, that of advising Members of the House of Commons. Where is he?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

That is not a matter for the Chair.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

Further to that point of order, Mr. Deputy Speaker. We are in a unique position because we are losing the whole of the business for Wednesday. We are losing Prayers, and the occupants of the Labour Benches need praying for. We are also losing a Bill under the Ten Minutes Rule to amend the European Communities Act. I should have thought that that would appeal to Labour Members. Is it possible to have Prayers, Questions and the Bill to amend the European Communities Act after 10 o'clock? I understand that it will still be in this day's business if we take those matters after 10 o'clock.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

The answer to that is "No". If we sit beyond half-past two, the business for Wednesday cannot be taken, as the hon. Gentleman well knows. Can we now proceed?

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

On a point of order, Mr. Deputy Speaker. I should be grateful if you would clarify one point. Am I correct in thinking that if the business goes beyond 2.30 p.m. any Questions that have been tabled do not, as we might have expected, receive a Written Answer but must be retabled, thereby ensuring that the Government gain several days, in which time the information might well have been of interest to our constituents?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

The hon. Gentleman is correct. The Questions must be retabled.

Photo of Mr Robert Adley Mr Robert Adley , Christchurch and Lymington

I shall not pursue the last point of order. Mr. Speaker's Office advised me that there was no way in which a statement may be made. If war is declared on this country we must sit here until this piece of legislation is finished. Is that not a slightly unsatisfactory situation? May I ask you, Mr. Deputy Speaker, to use your good offices to see that if this situation ever arises again——

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

Order. I suggest that the hon. Member's point is hypothetical. This is a matter for Mr. Speaker, who will no doubt deal with it in due course.

Photo of Mr Anthony Fell Mr Anthony Fell , Yarmouth

This has become a farce. The job of the Leader of the House is to look after the worries of Back Benches and other Members on both sides of the House. Surely we may have something better than a junior Minister present at a stage such as this, when hon. Members—or, at least, Opposition Members—are obviously worried about what is going on. Why may we not have the Leader of the House here, instead of his skulking in the shadows somewhere behind the Chair?

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

That is not a matter for the Chair.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I beg to move Amendment No. 21, in page 6, line 20, leave out from 'that' to 'or' in line 21 and insert: 'the whole or part of the increase ought not to be restricted by virtue of subsection (2)(i) of this section'.

Photo of Mr Oscar Murton Mr Oscar Murton , Poole

With this we may take Government Amendments Nos. 22, 26, 27, 28, 29, 30 and 39.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

The Government made clear in discussions and statements before the Bill was published that, in satisfying the requirements of the Bill, where a price increase was not restricted as a result of an investigation, during the currency of the existence of a code—if the code does continue to exist after 1st August—a restriction would still be placed on price increases by the code. The Bill was so drafted. However, on examining the wording of the Bill one may mistakenly receive the impression, from the wording of the clause and a later clause, that the fact that a price increase was not restricted after an investi- gation meant that it was similarly not restricted by the code.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

On a point of order. I apologise to you, Mr. Speaker, and to the Minister for raising this point of order. The House is in a difficulty. You, Mr. Speaker, look after the interests of all Members of Parliament. The Leader of the House looks after the interests of all hon. Members, especially Back Bench Members. There is a serious situation that is worrying many hon. Members. It may be amusing to some but it is not amusing to others.

Many Questions must go by the board. The Leader of the House has made no appearance to give an explanation to the House. We have exactly five minutes before all the Questions, statements and other matters must disappear for today.

I know that it is not within your power, Mr. Speaker, to order the Leader of the House to appear here and make a statement, but I am certain that many hon. Members, especially members of the Opposition, would welcome a sight of the Leader of the House of Commons at such a time.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Order. It is not in my power to ask anybody to come into the Chamber. I hope that the Minister may proceed.

Several Hon. Members:

Several Hon. Members rose——

Photo of Mr George Thomas Mr George Thomas , Cardiff West

I shall not take any points of order as long as the Minister is speaking.

I heard the earlier exchange. I was on my way into the Chamber. Out of courtesy to everyone concerned, I waited until the points of order had been settled by Mr. Deputy Speaker. I was glad to do so.

If there are interruptions on points of order it will lead to disorderly debates.

I can do nothing at all in this matter. The House has continued talking. The action taken by the Government to move the closure or the Adjournment is not my concern. We have called the Minister to address the House. I hope that he will now be allowed to do so.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Order. I must warn hon. Gentlemen that if they want to argue about the 2.30 p.m. Questions, that is not a point of order for me. If anybody tries to do that, I shall ask him to resume his seat, as a first step.

Photo of Mr Robert Adley Mr Robert Adley , Christchurch and Lymington

On a point of order, Mr. Speaker. May I ask you to clarify one point that you made? You indicated that the possibility of Government statements is not a matter for you, as was my understanding from your office. My request is that for future reference we should do something about this situation.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

Mr. Deputy Speaker is never wrong. Therefore, it looks as if I am wrong. I know that we are getting into a disorderly position. I have no doubt that it would only have lasted another two minutes, in any case.

Photo of Mr John Fraser Mr John Fraser , Lambeth Norwood

I was saying that one might mistakenly receive the impression, from reading the clause and some of the later clauses, that if a price increase was unrestricted following an investigation, it might also be unrestricted by the code as long as the code endured. That was not the intention. It is not so drafted. But to remove the possibility of anybody being mistaken and to clarify the wording of the Bill, I move the amendment.

Photo of Mr David Crouch Mr David Crouch , Canterbury

I am most careful, Mr. Speaker, not to interrupt the Minister bearing in mind your injunction to hon. Members not to do so. I am most careful to speak before the dreadful hour of 2.30 p.m., when it appears to me that Parliament, representing all the people of the country, will lose 22nd June. Is there nothing that we can do to save this day?

Photo of Mr Michael McNair-Wilson Mr Michael McNair-Wilson , Newbury

It is incredible that a Minister from the Department of Transport should be sitting on the Government Front Bench, yet we are to be denied the 57 Questions put down to the Secretary of State for Transport, which should come up in one minute's time. Is that not an appalling abuse of Parliament and democracy?

Photo of Mr George Thomas Mr George Thomas , Cardiff West

I am afraid that that has happened before.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

As interest in the Bill has suddenly revived, to judge by the increased attendance in the Chamber, perhaps it is as well if I preface my remarks with the general premise that I made on an earlier amendment. If hon. Members should wonder why such thoroughness is being applied in the consideration of the Bill, it is because, in not accepting our first amendment yesterday, the Government made it necessary for us to take account of the fact that the Price Commission is now to be made permanent. Its accompanying powers will be equally permanent. Therefore, we are required to give the closest scrutiny to all the proposals in the Bill.

2.30 p.m.

Photo of Mr David Crouch Mr David Crouch , Canterbury

On a point of order, Mr. Speaker. I wondered whether you were yet able to answer my question about our losing 22nd June.

Photo of Mr George Thomas Mr George Thomas , Cardiff West

The hon. Gentleman is quite right: we shall go straight from 21st to 23rd June.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

It is appropriate, in that case, that we should actually be in the twenty-third hour of debate.

There is a danger at this stage, after a largely sleepless night, that the issues will be distorted. I am therefore concerned to make it clear that the permanence of the powers and the institution to be established means that we should pursue these points thoroughly.

The matter concerned in the amendments is not new. They give effect to an intention of the Minister's from the beginning and implement a basic element of injustice by discriminating against distributors. This was well expressed on Second Reading by my right hon. Friend the Member for Grantham (Mr. Godber), who spoke not only as a senior and experienced Member but also as Chairman of the Retail Consortium. Explaining that body's objections to this proposal, he said: Not only were we confronted with new powers for both the Secretary of State and the Price Commission, but we learned that we were to be faced with a continuation of the Price Code and a continuation for retailers of the full extent of both gross and net margin control. That is an extension of control that cannot be justified. The distributive industry is now so hamstrung that we shall see a further reduction of investment in it and a further drop in employment. Confidence has been shaken, and the effects of that have yet to be seen."—[Official Report, 27th April 1977; Vol. 930, c. 1300.] My right hon. Friend might have added that since 1974 the distributive industry has been subject to a 10 per cent. blanket cut of its margins. When the Minister proposes something to make these companies liable under both counts—even if they avoid the investigatory powers of the Commission they will still be subject to the code—we say that that is discrimination and that something should be done to redress the balance of advantage. For that reason, we shall vote against the amendment.

Question put, That the amendment be made:—

The House divided: Ayes 247, Noes 212.

[For Division List No. 173, see c. 1649]

Question accordingly agreed to.

Amendment made: No. 22, in page 8, line 8, after 'and', insert: '"subsection (2)(b) of this section" in paragraph (a) and the words '.—[Mr. John Fraser.]