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Wholesale Prices

Volume 933: debated on Monday 20 June 1977

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asked the Secretary of State for Prices and Consumer Protection whether he will give the latest year-on-year percentage increase in wholesale prices (all items).

The Under-Secretary of State for Prices and Consumer Protection
(Mr. Robert Maclennan)

The wholesale output price index has increased by 20¾ per cent. year on year since May 1976, showing no change since April. The wholesale input price index has increased by 19¼ per cent. year on year—a fall from the April figure of 22¼ per cent.

As the Minister recognises and admits that the rate of wholesale price inflation is now 20 per cent., can he give us one good reason why the public should believe this desperate and discredited Government when they hold out the mirage that inflation will fall, at some distant date, to single figures?

I should have thought that the hon. Gentleman would take some comfort from the fall in the input index which reflects the stability of sterling that has been brought about by Government measures and some stabilisation of world commodity prices. These are reasons for believing that the Government are on target.

Does my hon. Friend agree with the Secretary of State that the Common Market is to blame for hardly any of the price increases? If so, is not his Department really saying that the Government are to blame for all the price increases? Is the Secretary of State also saying that the transitional arrangements arising from Common Market membership have had little or nothing to do with price increases over the past three or four years?

If I accepted my hon. Friend's extension of the responsibility, I could include him and his hon. Friends in that responsibility because of their support for our measures. This is an illogical approach. There are a number of other Questions on the Order Paper concerning the common agricultural policy.

Does the hon. Gentleman know whether the Secretary of State believes that, given the surplus on the balance of trade over the last three months, it is relatively more important that prices in the shops should be allowed to benefit from the rise in the value of the pound? If so, is the right hon. Gentleman urging that view on his Cabinet colleagues?

Did the extraordinary figure just given by the Secretary of State include a calculation of world food prices which are much lower than those in the Common Market and which could have benefited greatly the British consumer? Is the hon. Gentleman aware that there is a plentiful supply of food in the world at much lower prices than in the Common Market?

I do not see the relationship between that and the percentage increase in wholesale prices with which I have been dealing. But, of course, the factors to which the hon. Gentleman referred were taken into consideration.