Industrial Pricing Policy

Oral Answers to Questions — Oral Answers to Questions – in the House of Commons at 12:00 am on 5th December 1977.

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Photo of Mr Michael Neubert Mr Michael Neubert , Romford 12:00 am, 5th December 1977

asked the Secretary of State for Prices and Consumer Protection whether he will make a statement on the Price Commission's decision to investigate the pricing policy of those industries operating low profit safeguard levels.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Under the provision of the Price Commission Act, approved by the House in July, the selection of cases for investigation is a matter for the Price Commission.

Photo of Mr Michael Neubert Mr Michael Neubert , Romford

Is not the fact that so many of the companies investigated have been successful in negotiating interim price increases an indication that the public expect little significant relief as a result of the activities of the Price Commission, and that prices remain a symptom of inflation and not its cause?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I do not see how any objective and informed person can draw that conclusion. The Price Commission has chosen, in its wisdom, to investigate areas where investigation seemed appropriate and consistent with Section 2 of the Act. I have no doubt that the combination of those investigations and the other sort of pressure that the Price Commission is already exerting—the very small number of price applications we have had during the last four months is largely attributable to the new powers of the Price Commission—will have a significant effect on the rate of inflation and, perhaps more importantly, will do a great deal to attack some of the monopolies and semi-monopolies in the United Kingdom economy.

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

Is it not the case that if the safeguards did not exist the Opposition would be the first to complain?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

There is no doubt that, during the long night when we were kept up by the Opposition's hope that the Price Commission Bill could be defeated, the major concession for which they asked was, in one sense, an intensification of the safeguard provisions. It is less than consistent to complain that the provisions are too strong when they are implemented yet too weak when they are actually operated.