Counter-Inflation (Price and Pay Code) (No. 2) Order 1973

Publication Date:January 01, 1973
 
FREE EXCERPT

1973No. 1785

COUNTER-INFLATION

The Counter-Inflation (Price and Pay Code) (No. 2) Order 1973

26thOctober1973

30thOctober1973

1stNovember1973

The Treasury, in exercise of the powers conferred on them by section 2 of the Counter-Inflation Act 1973(a) and of all other powers enabling them in that behalf, and having consulted the Price Commission and the Pay Board and representatives of consumers, persons experienced in the supply of goods or services, employers and employees and other persons in accordance with subsection (4) of the said section 2, hereby make the following Order:—

1.—(1) This Order may be cited as the Counter-Inflation (Price and Pay Code) (No. 2) Order 1973 and shall come into operation on 1 November 1973.

(2) The Interpretation Act 1889(b) shall apply for the interpretation of this Order as it applies for the interpretation of an Act of Parliament, and as if for the purposes of section 38 of that Act this Order were an Act of Parliament and the Order revoked by Article 3 of this Order were an Act of Parliament thereby repealed.

2.—(1) The Price and Pay Code prepared by the Treasury and set out in the Schedule to this Order shall be the code for the purposes of the Counter-Inflation Act 1973.

(2) Part I of the Code, and so much of paragraphs 1, 2 and 186 thereof as relates to the Price Commission, shall come into force on 1 November 1973; and Part II of the Code, and so much of the said paragraphs as relates to the Pay Board, shall come into force on 7 November 1973.

3.—(1) Subject to paragraph (2) below, the Counter-Inflation (Price and Pay Code) Order 1973(c) is hereby revoked but Part II of the Code set out in the Schedule to that Order, and so much of paragraphs 1, 2 and 153 thereof as relates to the Pay Board, shall remain in force until Part II of the Code set out in the Schedule to this Order comes into force.

(2) Where notice of an increase in a price or charge given to the Price Commission under the Counter-Inflation (Notification of Increases in Prices and Charges) Order 1973(d) and received at the offices of the Commission

(a) 1973 c.9.

(b) 1889 c.63.

(c) S.I. 1973/658 (1973 I, p. 2106).

(d) S.I. 1973/664 (1973 I, p. 2151).

before 1 November 1973 falls to be considered by the Commission on or after that date, the Commission shall, in considering the increase, have regard to Part I of the Code set out in the Schedule to the Counter-Inflation (Price and Pay Code) Order 1973, and so much of paragraph 153 thereof as relates to the Commission, as if this Order had not been made.

Hugh Rossi, Oscar Murton, Two of the Lords Commissioners of Her Majesty's Treasury.

26th October 1973.

(Article 2(1))

SCHEDULE

The Price and Pay Code

1. The Code has a dual function. First, the Price Commission and Pay Board are required to exercise their powers so as to ensure that it is implemented. Secondly, all those concerned with the determination of prices and pay should have regard to it.

2. The Code is therefore addressed both to the Commission and the Board and to all those concerned with price and pay determination. Part I deals with prices and Part II with pay.

Part I—Prices

General Principles

3. The general principles relating to prices are:—

(i) to limit the extent to which prices may be increased on account of increased costs, and to secure reductions as a result of reduced costs;

(ii) to reinforce the control of prices by a control on profit margins while safeguarding investment;

(iii) to reinforce the effects of competition, and to secure its full benefits in the general level of prices.

Field of Application

4. With the exceptions specified in paragraphs 5 to 11 below, the prices of goods and services supplied to the United Kingdom home market are within the scope of the control.

5. The prices of goods and services exported (whether directly or through an agent or merchant) are not controlled.

6. The following are not controlled:—

(i) prices paid on first sale into the United Kingdom of imported goods and services;

(ii) prices of goods and services where the application of the control would be inconsistent with an international agreement or arrangement. For this purpose, an international agreement or arrangement is one between states or organisations of states, not between firms;

(iii) prices at sales by auction, where such sales are a normal practice in the particular trade;

(iv) prices of goods at the point of sale on a commodity market in the United Kingdom such as the London Metal Exchange or prices directly determined by reference to such markets;

(v) prices of second-hand goods (other than second-hand road vehicles sold by distributors);

(vi) charges for the carriage of goods or passengers on international journeys; charges for air navigation, landing and related services and ship, passenger and goods dues, provided that they relate wholly or mainly to such traffic; charges for international mail, Giro, remittance and telecommunication services;

(vii) prices of ethical medicines supplied to the United Kingdom market to the extent that regulation of their prices is within the scope of any agreement relating to those prices made between the Secretary of State for Social Services and representatives of manufacturers of those medicines; but only so long as such an agreement is in force;

(viii) prices in contracts for the Secretary of State for Defence for warlike stores and services which are within the agreement between Her Majesty's Government and industry governing the pricing of, and control of profit from, non-competitive contracts. These prices will be subject to the controls provided in that agreement;

(ix) insurance premiums, which will be subject to restriction by the Secretary of State for Trade and Industry;

(x) taxi fares, where subject to control by the Home Secretary or the Secretary of State for Scotland;

(xi) charges payable to returning officers in connection with Parliamentary elections, determined under the Representation of the People Act 1949(a);

(xii) prices determined by a statutory body which, as a result of an order made under section 8 of the Counter-Inflation Act 1973, is required to apply the Code to the determination of those prices;

(xiii) subscriptions and certain prices charged by non-profit-making organisations as in paragraphs 107 to 109.

Application to food, farming and forestry products

7. The prices of manufactured food and drink, like those of manufactured products generally, are within the scope of the control as are those of semi-processed foodstuffs such as butter, cheese, sugar and quick-frozen vegetables.

8. The prices paid to United Kingdom producers or producers' organisations or to overseas suppliers for fresh foods and similar products, which are subject to fluctuations on world and United Kingdom markets because of seasonal factors or changes in the relationship between supply and demand, are not controlled. This applies in particular to meat, including bacon and poultry, fish, eggs, fruit and vegetables. However, enterprises which resell these products, whether home-produced or imported, at any subsequent stage will be subject to control.

9. The retail price of milk for liquid consumption and the margins of milk distributors will continue to be subject to the existing controls by the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland. So long as these controls apply, the price of milk for liquid consumption will not be subject to the Code.

(a) 1949 c.68.

10. The prices of milk for manufacture of products for sale in the United Kingdom will, however, be subject to the following requirements. Except where the Milk Marketing Boards incur additional allowable cost increases in marketing the milk:—

(i) the price of milk for the manufacture of butter and skimmed milk powder may not be increased above current levels (adjusted as necessary to reflect changes in the intervention prices); and

(ii) for other milk products, the price of milk may not be increased above the prices of milk for butter and skimmed milk powder (adjusted by not more than the average premium received by the Boards for milk for the product concerned over the butter and skimmed milk prices in the year ending 30 April 1973).

11. What is said in paragraph 8 in relation to prices paid for fresh foods applies also to prices of other primary products of animal or vegetable origin which are subject to similar fluctuations.

Charges

12. References in the Code to prices include references to charges, unless there is explicit provision to the contrary.

Goods and services

13. References in the Code to goods or products include references to services, unless there is explicit provision to the contrary.

Definition of Enterprise

14. With the exceptions described in paragraph 15, for the purposes of the Code an enterprise means either an enterprise as a whole or a separate constituent company or sub-division provided that in the latter case separate accounts for such sub-divisions:—

(i) are or can be made available for all relevant periods;

(ii) are not materially distorted by transactions conducted otherwise than on arm's length terms;

(iii) would, if combined with one another and with the accounts of all other activities or transactions of the enterprise, produce results consistent with those shown by the accounts of the enterprise taken as a whole.

15. The definition in paragraph 14 does not apply where the unit for net profit margin control, as defined in paragraphs 60 and 61, is the relevant one. Accordingly the definition in paragraph 14 does not apply in paragraphs 34, 57 to 69, 71; or, where they deal with net profit margins, in paragraphs 20, 56, 70, 78 and 79; or in other paragraphs which refer to these.

16. A reference to an enterprise includes a reference to a co-operative, a partnership or to an individual carrying on a business.

Mixed enterprises

17. Where the activities of an enterprise are not confined to manufacturing,...

To continue reading

REQUEST YOUR TRIAL