House supports Bill to control prices of basic goods

By David Ochami

MPs blamed rampant poverty and malnourishment on "unfettered capitalism and profiteering" as they overwhelmingly supported a Bill seeking to reintroduce controls on prices of basic consumer goods.

The legislators said the country faces social unrest, soaring crime from high cost of living caused by falling incomes, inflation and high cost of production. These are attributable to an uncritical surrender to market forces and lack of Government intervention.

The Bill passed the Second Reading on Wednesday and will now move to the Third Reading.

If Parliament adopts the Bill after the third stage, the President will decide whether to sign it into law.

MPs said the Government ought to intervene in the market to cushion consumers and spur consumption to avert crisis.

Supporting Price Control (Essential Goods) Bill 2007, legislators said market intervention and free trade are not mutually exclusive.

The Bill’s exponent Ephraim Maina (Mathira) said the proposal does not seek a return to command economics, but follows in the interventionist trend emerging in Western economies facing a financial meltdown.

Public participation

The Mathira MP said an economy cannot grow without popular consumption and said the Government ought to implement practical steps to enable public participation in the market economy.

Rarieda MP Nicholas Gumbo said high crime and insecurity could be attributed to falling incomes. He said the Government ought to subsidise cost of living through control of prices of basic goods.

Turkana Central MP Ekwee Ethuro accused Central Bank of Kenya of falsifying inflation trends to conceal a flagging economy. He added price controls should come with subsidy of production sectors like farming.

Cabinet ministers Chris Obure and Otieno Kajwang’ supported the Bill. Mr Obure said price controls would make basic goods affordable and spur consumption.

The Public Works minister also called for State control of bank interest rates.

His Immigration counterpart said said the Government ought to control the cost of housing and transport.

The Bill seeks to set maximum prices for maize meal, wheat, rice, sugar and cooking fat besides petrol and paraffin.