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Inflation

Volume 923: debated on Monday 20 December 1976

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10.

asked the Secretary of State for Prices and Consumer Protection what is his latest estimate of the rate of inflation during the year ending 5th April 1978.

I refer the hon. Gentleman to the answer my right hon. Friend the Chancellor of the Exchequer gave to the hon. Member for Romford (Mr. Neubert) and my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) on 16th December.

Does the right hon. Gentleman recall the letter of 18th December 1975 written by his right hon. Friend to the Chairman of the IMF, in which he said that by the end of this year inflation would be down to below 10 per cent.? Will he tell the House when the Government expect that that aim will be achieved?

I told the House a month or five weeks ago of the factors that had prevented that from coming about. What I am sure of is that the more patriotic Members will attempt to secure that end rather than carping about it.

Is it the policy of Her Majesty's Government this year, or even next year, to stop inflation or merely to diminish the rate of inflation, an ambition that is scarcely comprehensible?

I think they would be a very ambitious Government and a very ambitious Minister who thought that inflation could be stopped over a period of years or months without any increases. What the Government intend to do and will do is substantially to diminish the rate and eventually to bring it down to the rate which has been suffered or enjoyed by our industrial competitors.

Does the right hon. Gentleman recall and, indeed, support the claim made by his right hon. Friend the Chancellor of the Exchequer that between February 1974 and October 1974 the then. Labour Government had reduced inflation to 8·4 per cent.? If he supports that, why is it that the capitalist countries of West Germany and America, from which the Government are trying to borrow money, have decreasing rates of inflation while the Socialist Government with whom we are lumbered are still creating rising inflation?

I can recall that claim because the hon. Gentleman refers me to it at almost every Question Time. It was a reasonable prognosis to make on the evidence available at the time, but there have been a number of factors—I for my part am prepared to take responsibility for some of them—that have prevented us from achieving that aim. However, our intention is to achieve it, and the painful measures that we announced six days ago are one of the steps towards that achievement.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Minister's reply, I give notice that I shall raise the matter on the Adjournment.