Price Commission

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 Tim Smith Mr Tim Smith , Ashfield 12:00 am, 5th December 1977

asked the Secretary of State for Prices and Consumer Protection what is the estimated cost of the Price Commission from August 1977 to March 1978; and what is the estimated cost in a full year.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The Financial and Explanatory Memorandum to the Price Commission Bill forecast the annual cost of administering the Price Commission as approximately £5 million at 1977–78 Estimate prices. To this should be added approximately £2 million for services provided by other Government Departments. The cost between 1st August 1977 and 31st March 1978 is expected to be a proportional amount, namely, about £4⅔ million.

Photo of Mr Tim Smith Mr Tim Smith , Ashfield

To what extent as a result of the change from administering the old Price Code to administering the new investigations under the 1977 Act has it been necessary to employ outside firms of management consultants? Does the Secretary of State expect that this will have a material effect on the cost in subsequent years?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The question about management consultancies is for the Price Commission rather than for me. I can, however, assure the hon. Gentleman on the overall cost, which is my proper concern. Allowing for inflation, the overall cost will not be more than in previous years, and I hope that it will be less. Already there has been a reduction in staff which ought to move it in that direction.

Photo of Mr Ian Gow Mr Ian Gow , Eastbourne

Will the Secretary of State tell the House what consideration he has given to amalgamating the Price Commission with the Monopolies and Mergers Commission? Does he really think that an expenditure of £7 million a year is justified in terms of return to the consumer?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I have no doubt that it is, and as from time to time there is an announcement that the price of, say, sugar has been made less than it would otherwise have been, and as those figures and examples multiply, hon. Members opposite who disagree with me ought to say whether they are opposed to that as well as to the costs of administering such a scheme. As regards the amalgamation of the institutions, I think I should answer that question when it arises in a few minutes' time.

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

Is my right hon. Friend aware that consumers will note the antagonism of Conservative Members to the Price Commission? Is he aware that there is a continuing view on this side of the House that regulations and monitoring of the kind that he has so effectively brought into activity following the changes through the Price Commission Bill are most welcome to us?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I am grateful to my hon. Friend for what he says about the success to date of the new Price Commission, and, like him, I should like to see some worthwhile comments from the Opposition about its work. I should like to hear whether they approve of the investigations and possible price freezes or reductions which the Price Commission now envisages and of the inquiries and examinations which I have asked the Commission to investigate. The Opposition had better tell us once and for all whether they believe in what the Price Commission is doing.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

The Secretary of State will agree that the Question is about the cost of the Price Commission. Will he now say whether the additional £2 million which has been added since the Price Commission Bill was passed includes all the external services required, or is the annual figure to be greater than that?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

No, the £2 million has not been included since the Price Commission Bill was passed. The hon. Gentleman should not be fooled by the "Ohs" and "Ahs" of the hon. Member for Gloucester (Mrs. Oppenheim). He must have seen her in action long enough not to take any notice of them. The £2 million has always been there as part of the Government services provided by us to an outside agency, and similar figures appear for other agencies doing similar work.