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£ Sterling (Value)

Volume 893: debated on Thursday 12 June 1975

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asked the Chancellor of the Exchequer what is now the value of £1 sterling expressed in terms of the value of £1 sterling on 28th February 1974.


asked the Chancellor of the Exchequer what is the purchasing power of the £1 sterling at the latest available date, compared with 1st March 1974.

Taking the internal purchasing power of the pound as 100p in February 1974, its value in April 1975, the latest date available, is estimated to be '79p. This estimate is based on the changes in the General Index of Retail Prices.

Is the Minister aware that that really frightening answer is a direct result of 16 wasted months of Socialism? Will he tell his right hon. Friends the Chancellor of the Exchequer and the Prime Minister that their policies, if allowed to continue as they have in the last 16 months, are in danger of turning this country into a banana republic without bananas? Will he now give an assurance that the Government have decided to pluck up courage, ignore the rantings of the Tribune Group, and start fighting inflation, before that 79p becomes 50p by the end of the year?

The hon. Gentleman will be well aware of the proposals that my right hon. Friend brought forward in his last Budget for combating inflation. The hon. Gentleman will also no doubt be well aware of the extremely constructive proposals that have recently emanated from the TUC in this direction, many of them put forward by people who might have a great deal of sympathy with the objectives of the Tribune Group.

Will my hon. Friend the Minister say how many Opposition Members have offered to exchange their £1 notes for 79p?

Will the Financial Secretary assure me that the reason why the Chancellor has not answered this Question is that the figure is really so appalling? Does he agree that to reduce the rate of inflation would involve a cut in Government expenditure, which would involve the abandonment of the Community Land Bill and, indeed, the Industry Bill?

The reason I am answering this Question is that it always falls to the junior Minister at the Treasury to answer Questions on the purchasing power of the pound, under both administrations.

As for cutting public expenditure, the hon. Gentleman will be well aware of my right hon. Friend's proposals in that respect, both for this year and for next year. Therefore, I hope that, arising out of his supplementary question, the hon. Gentleman will be able to recognise the difference between public expenditure which is merely connected with the acquisition of assets and that which has an effect on demand for resources.

Has the Treasury, in contemplating the exchanges this week, been encouraged by the immediate boost given to confidence in sterling by the outcome of the referendum last week—as the electorate were deceived by being promised?

I am glad to be able to reassure the right hon. Gentleman that the exchanges today are quite stable.