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Retail Price Index

Volume 888: debated on Monday 17 March 1975

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asked the Secretary of State for Prices and Consumer Protection what has been the increase in the retail price index over the past 12 months.


asked the Secretary of State for Prices and Consumer Protection what is the current rate of price increases based on the last three months of the retail price index expressed at an annual rate.

The retail price index rose 19·9 per cent. between January 1974 and January 1975. The increase over the three months to January expressed at an annual rate was 25·9 per cent. which reflects the exceptional increases in sugar and petrol which took place in December and January.

Does the right hon. Lady not agree that price increases of the order of 20 per cent. over the first 12 months of the Labour Government is indeed a grave state of affairs, particularly when inflation in most industrial nations is beginning to fall?

I would be completely foolish if I did not regard this level of inflation as unacceptably high. The hon. Gentleman should consider why it is that his party continually opposes the efforts we make to modify the rate of inflation. I hope he will accept from me that the rate of food index inflation is less now than it was about a year ago, largely because of the food subsidies, which the Conservative Party continually attacks.

If, as seems likely, the February figures, to be published on Friday, show that the annual rate of inflation on a three-months' basis is approaching 30 per cent. to what will the Minister attribute this major achievement of Labour's first year of office?

If I were to answer hypothetical questions like that, and, for that matter, if I were to reach a conclusion on the annual figure for inflation from the figures the hon. Member has put forward, I would be a very foolish person and not fit to stand at this Box.

Is the right hon. Lady aware that the rate of inflation during 1974 and for some time to come must be due to the mismanagement of the national finances under the previous Government?

I think that I should leave the right hon. Gentleman's comments to be referred to by his hon. Friends—

Will the right hon. Member give me the opportunity to reply? He will know that there has been a reduction in the increase in the M3 money supply rate, which is now over half what it was under that previous administration.

When does the right hon. Lady expect the rate of inflation to begin to decline, or is that a hypothetical question as well?

It is obviously a hypothetical question, because it depends, among other things, on the level of commodity prices and on imports. The hon. Gentleman will know that one of the most unwise things anyone can do is to make forecasts based on what he thinks will happen to world commodity prices, because those forecasts are mainly falsified in the event.