asked the Secretary of State for Prices and Consumer Protection what has been the monthly increase in the retail price index for the latest available month.

asked the Secretary of State for Prices and Consumer Protection what was the increase in prices since February 1974 to the latest available date.

asked the Secretary of State for Prices and Consumer Protection when the monthly increase in the retail price index last exceeded 1·5 per cent.

The retail price index rose by 1·5 per cent. in April: this was the largest increase since April 1977 but the smallest April rise for six years. The increase since February 1974 has been 91·3 per cent.

Is the right hon. Gentleman aware that, accepting the last three months' figures, we now show a yearly increase of 11·2 per cent.? Will he accept that what he is doing in making these comments—particularly the comments he made in Birmingham—is exactly what Mr. Alan Fisher has termed "kite-flying before the election"? Will he withdraw some of the comments that he has made and face up to the reality of the continuing increase, particularly in view of the last increase in the mortgage rate?

What I said yesterday and what I am happy to repeat today is that the inflation rate will remain at or about the present figure for the rest of this year and that the inflation rate for 1979 is for the British people to decide when they decide the wage bill for that period. As for the three-monthly annualised figures, there is a Question later on the Order Paper on that subject, to which I look forward, because it is a very good figure.

After the Government's appalling record, which has seen prices all but double in four years, and after numerous fraudulent forecasts of better times ahead, how can the Secretary of State deny what all best-informed commentators are telling him, namely, that the inflation trend will be rising again by the end of the year and that it will probably be in double figures in 1979?

I hope that, as this Question Time goes on, the hon. Gentleman will give an example of an inflation forecast that I have made which has turned out to be incorrect. As for other forecasters, I dealt in my speech yesterday in detail with two forecasters—the London Business School and the National Institute. The forecasts of both those institutions are more gloomy than the Government's view, and both are already wrong—indeed, one was wrong before it was published. It prophesied that the lowest point for 1978 would be 8·4 per cent. and we are already down to 7·9 per cent.

In my right hon. Friend's view, is there some vested interest in the Conservative Party in some sort of damaging change in the rate of inflation? Are not the figures that he has given entirely reasonable, based ort every reasonable piece of statistical information available? Are the "well-known experts" to whom Tory Members refer in fact in Tory Central Office?

No; the reason that these questions are persistently put, against all the evidence, is very clear. It is not so much that the Opposition believe that the inflaton rate will increase as that they actually hope that it will increase. What they want to do is obtain narrow party advantage from national deterioration. The Government do not propose to allow that to happen.

Is the right hon. Gentleman aware that, in view of the reply that he has given, we are not required to play for any narrow party advantage? Will he repeat loud and clear what he said—that inflation since this Government came to office has been 91 per cent.? What sort of celebration is he planning when it reaches 100 per cent.?

First of all, I hope that the hon. Gentleman will at least struggle for some statistical objectivity. The trend of increasing inflation began 18 months before this Government came to power. The inflation rate is now much lower than it was when the Conservative Government left office. I refer again to every informed observer who makes it very clear that inflation in this country began with the Barber printing boom of 1973. Our achievement is that we have brought that under control.

Is there not some statistical evidence that the rate of inflation might even fall before the end of this year and that there are experts who put forward that viewpoint? Will not my right hon. Friend agree that not only we on these Benches but the whole country will be behind him in his efforts to curb inflation and that the only renegades are a few Members on the Conservative Front Bench, who seem still to be following their dubious Gloucester index?

There is a prospect over the next two or three months of some small improvement, but I do not want to go further than I went yesterday. The prospect for this country—the statistical certainty, as I described it then and describe it again today—is of inflation remaining for this year at or about its present figure.

Who do the Secretary of State and the Prime Minister think they are kidding when they repeat their fraudulent inflation forecasts? Do they think that the people of this country have forgotten this Government's lies about the rate of inflation before the last election or that the same people will be fooled by this kind of electoral deception again? Will the Secretary of State tell the truth for once and say that the effect of the fall in the pound since last January, of rising raw material prices, of rising interest rates and of rising national insurance contributions are bound to have an effect on inflation by the end of this year and that we shall be back in double-figure inflation by the second half of next year? Does he care to repeat his incredible prediction that inflation will be even lower next year?

I do not think that the people of this country are very impressed by that sort of vulgar stridency. What I believe they understand is the achievement over the past 18 months in bringing inflation down from over 26 per cent. to under 8 per cent. I believe they also know about next year. I made clear yesterday, and my right hon. Friend the Prime Minister repeated the point many times during the previous week, that the inflation rate next year is something for the people to decide. If we have a reasonable wage round, inflation will remain under control. Perhaps the hon. Lady would like to contribute to the education of the people by telling us whether she and her party want a moderate wage round next year or whether they are not interested in that sort of thing.

asked the Secretary of State for Prices and Consumer Protection what has been the increase in food prices since February 1974.

asked the Secretary of State for Prices and Consumer Protection whether he will give the increase in food prices since March 1974.

Will the hon. Gentleman take this matter more seriously than his right hon. Friend the Secretary of State did a few minutes ago, bearing in mind the problems of housewives and the low-paid? Is he aware that, according to the Department of Employment Gazette, food prices rose by 2·8 per cent. in the first three months of this year? That is a Department of Employment figure. Is the hon. Gentleman also aware that the increase in the national insurance contribution that the Chancellor of the Exchequer is now to impose will affect the food industry badly, because it is labour-intensive?

I welcome the opportunity to set straight the record of food prices. They have shown a very marked improvement over the course of the past year. Since last July, there has been a continual steady fall in the rate of increase. At that time it was 25·2 per cent. In December it was down to 10·6 per cent., and it is now 6·3 per cent. For much of that time, the rate of increase in food prices has been below the all-items retail prices index. Indeed, for the past seven months the figure has been below the rate of increase in prices generally.

Does my hon. Friend agree that, despite the improvement in food prices as compared with certain other prices, almost every consumer domestic food would be cheaper if it were not for the higher lunacies of the Common Market? Is it not gross humbug for the Conservative Party, which brought us unprotected into the Common Market and added to the problem by its stupid amendment on the green pound, should now object to the situation it has created?

We can take some encouragement from this Government's success in holding down, with increasing effect, the level of common price increase in the annual price negotiations in Brussels. In 1975, the common price increase was 9·6 per cent. In 1976, it was 7·7 per cent. This year it has been only 2 per cent.

However, my hon. Friend is right to point to the effect of the greater devaluation of the green pound than this Government thought prudent. If it had not proved possible to phase that increase, contrary to the wishes of the Conservative Party, the housewife's food bill would have been increased by no less than £80 million. By the phasing, my right hon. Friend has been able to reduce that burden substantially, to £25 million.

Will the Minister confirm that food prices almost doubled during just over four years of Labour Government, compared with rather less than four years of Conservative Government? For the benefit of his hon. Friends below the Gangway, will he also confirm that British membership of the Common Market has been responsible for only a minute proportion of the increase in food prices during the past four years?

If the Conservative Party had taken any steps at any time to indicate support for this Government's measures to reduce the rate of food price increase, the hon. Gentleman's remarks might be treated more seriously.

In addition to the problem that has arisen because of the harmonisation of prices under the common agricultural policy, will my hon. Friend remind Conservative Members, when they talk about the recent measures of my right hon. Friend the Chancellor of the Exchequer, that those measures were taken because of their amendments to the Finance Bill, whereby they have given handouts to the wealthy?

My hon. Friend is entirely right. If my right hon. Friend the Chancellor had not taken the measures that he did over national insurance charges, to correct the consequences of the irresponsible Opposition treatment of the Budget, that treatment would have had serious effects on public sector borrowing and on the money supply, both of which the Opposition never lose an opportunity to remind us are important factors.

What does the Minister think would be the effect on food prices of distributing the various mountains of foodstuffs accumulated under Common Market regulations?

My right hon. Friend has taken steps to release some beef from intervention to institutions, steps which will have a modest effect. But the level of the so-called mountains varies substantially from time to time, and it is not possible to give an exact answer to the hon. Gentleman's question.

asked the Secretary of State for Prices and Consumer Protection what was the rate of inflation over the last 12 months; and how this compares with the rate of inflation in West Germany.

The retail price index rose by 7·9 per cent. in the 12 months to April 1978. The rate of inflation in West Germany in the 12 months to April 1978 was 2·9 per cent., a difference of 5 per cent.

Will the Secretary of State explain why we have done so much worse than the West Germans? Will he admit that, since February 1974, prices in this country have risen by over 90 per cent. compared with about 20 per cent. in West Germany? On that basis, the value of the pound in this country has dropped since February 1974 to 52·3 per cent. If we had had in this country West German rates of inflation, the pound would have been worth 83 per cent. of the earlier figure. Can the right hon. Gentleman explain why the Labour Government have cut the purchasing power of the working man's income by about 30p in the pound?

I do not know whether the hon. Gentleman has got his figures wrong or whether he has just got them out of perspective. As I told him in my initial answer, the difference between the German inflation rate and the British is 5 per cent. In February 1974, a month the hon. Gentleman chose and one in the last year of the Conservative Government, the differenece between the German inflation rate and the British was even wider. We have narrowed the gap between Germany and Britain during the four years of Labour Government.

Would not my right hon. Friend agree—he might not, because he is a pro-Marketeer—that the situation has developed very badly for us because of our entry into the Common Market, as compared with Germany, which was already in it and which has gained at our expense?

That is not my interpretation of events, not because I am a pro-Marketeer but because I think that the events are slightly different from those that my hon. Friend described. I share the view of my hon. Friend the Under-Secretary that, if we had not been forced to accept the common agricultural policy in its present form, price increases would not have been as high as they have been over the past four years. I think that no one would argue about that. But that is not the major cause. The major cause is to be found in a number of other more damaging matters, such as the 400 per cent. increase in oil prices.

Would not the right hon. Gentleman accept that in West Germany all political parties and industries subscribe to an incomes policy, and that this must be a major reason for the difference in inflation?

I believe that. I believe that an incomes policy, which I put in its widest sense—I mean not an imposed incomes policy, and certainly not a statutory incomes policy, but a policy which plans the growth in wages—is an essential ingredient of a successful economy. It is one of the things we have achieved over the past three years, and one that I hope we can achieve in the future.

Will my right hon. Friend tell hon. Members, such as the hon. Member for Altrincham and Sale (Mr. Montgomery), whose economic illiteracy is exceeded only by his dishonest use of statistics, that for a real comparison between the two economies he should take into account West Germany's very low defence expenditure obligations, the fact that it already had a high level of food prices before we even entered the Common Market, and that it has a level of investment renewal that we should do well to emulate? Is it not high time we made changes that would bring us into line, not in the social market economy that the hon. Gentleman wants, but in terms of the reality of our status in the world, so that we can protect the consumer?

Part of my hon. Friend's supplementary question is essentially not for me but for others. My hon. Friend has highlighted the central theme of all the Questions we have had from the Opposition today, namely, an incredibly selective use of statistics. This is, I fear, a feature of prices Questions. We are about to get it later on, when false comparisons will be drawn with the three-monthly average.

asked the Secretary of State for Prices and Consumer Protection what was the change in industry's input prices over the last 12 months.

In the past 12 months the wholesale price index for the inputs to manufacturing industry has fallen from 348·1 in May 1977 to 341·8 in May 1978. This is a fall of 1·8 per cent.

Does the Minister agree that this is an example of selective statistics—

The hon. Gentleman asked for them.

since in the past three months the index has actually risen by 5·3 per cent.? Is he aware that that will be a 20 per cent. increase on an annual basis? If there is a 20 per cent. increase, will the Minister confirm that the retail price index rate of increase will be no higher at the end of this year than it is now?

The hon. Gentleman must decide what figures he wants and, when he has decided, table the appropriate Question. I have given him precisely the figures for which he asked. They demonstrate that there has been a fall of 1·8 per cent. in the wholesale price index for last year. We should take considerable encouragement from that and, furthermore, recognise that it is evidence, if evidence were needed, that my right hon. Friend is wholly correct in stating that the rate of inflation in the remaining months of this year will be at or about the present figure.

In view of the relationship between the value of sterling and input prices, is it not strange that Tory Members should pretend to protect sterling and yet, when it is necessary for the Government to take action to repair the damage the Tories caused by their vote on the Budget, they shout "crisis", thereby damaging sterling? Is this not hypocritical and unpatriotic?

I absolutely agree with my hon. Friend. I think that the patriotism of the Tory Party is beginning to be called into question generally.

asked the Secretary of State for Prices and Consumer Protection what representations he has received from consumers about the trading practices of bureaux de change.

None, Sir.

Is the Minister aware that the British Tourist Authority is most concerned that some bureaux de change are abusing foreign tourists by charging unreasonable rates of commission and giving unreasonable rates of exchange? Will the Minister take account of the fact that it is not surprising that he has not received any complaints since it is the foreign tourists who are being abused? Will he accept some responsibility for protecting the good name of this country as a trading nation?

What I do notice is that the hon. Gentleman is complaining about prices and profits but has always voted against any means of dealing with excessive prices or profits. I know that the hon. Gentleman has done some very good work on this subject. If he would be kind enough to send me the details, I will forward them to the Price Commission.

asked the Secretary of State for Prices and Consumer Protection what was the increase in prices over the past three months expressed at an annual rate.

11·2 per cent.

Is the right hon. Gentleman aware that, far from getting figures wrong and comparing convenient figures, the Chancellor's 8·4 per cent., quoted for the convenience of the Government, was on the same basis? Can the Secretary of State tell me how he reconciles this figure with his confident assertion over the weekend? Does he not understand why many of us feel a scepticism which is shared by the general secretary of NUPE?

I will try to explain to the hon. Gentleman. The three months about which he asked me include April, which is always a month of uncharacteristically high price increases. For example, in the three months including April 1974, which take in six weeks of Conservative Government followed by six weeks of immediate Conservative inheritance, there was an increase of 24·6 per cent., twice as large as the figure I have just given. Hence my assertion earlier today that 11·2 per cent. for the three months including April is a very good figure which confirms my prognosis that prices in this country will remain for the rest of the year at or about their present level.

Will my right hon. Friend confirm that the great likelihood is that the figure for the three months up to October 1978 will compare very favourably with the much-quoted 8·4 per cent. given by the Chancellor?

It is important not to pick out any specific three-month period. The important thing is the overall trend. I understand why my hon. Friend picks those three months. It is important to ensure that inflation remains at or about its present level from now through October into 1979 so that we can build on this year's achievements next year. That is this Government's strategy. The Government's infation policy is not geared to any one month or date. It is geared to getting the whole inflation cycle broken and beaten down to the level of our industrial competitors.

When the Secretary of State defended his prognosis—as he has just called it—yesterday, speaking on Radio 4, one of the elements in this prognosis was that:

"The exchange rate has been predetermined for the rest of this year."

Can the right hon. Gentleman explain which exchange rate, tied to which factor? Was it to the dollar? Was it to the basket of currencies? How will he tie it and predetermine it for the rest of the year?

Even with the benefit of reading, the hon. Gentleman slightly misquoted me. What I said, and what I confirm now, was that the basic ingredients of the inflation pattern for the rest of this year have already been predetermined, partly because there are lags in these matters, which the hon. Gentleman will come to understand. As to the measurement of the exchange rate, conventionally we now measure it against the weighted basket of currencies. Now that the hon. Gentleman has joined us in the House perhaps he will urge his Front Bench to tell us what they believe about the exchange rate and to say whether they share the view of some of their friends in industry that it is too high or whether they share my view, which is that the exchange rate ought to be protected to help the consumer.

asked the Secretary of State for Prices and Consumer Protection if he will give an estimate of the effect of the depreciation of the £ sterling on a trade weighted basis, since the Budget, on the retail price index.

Roughly speaking, each 1 per cent. fall in the exchange rate adds about ¼ per cent. to the retail price index, within about 12 months. The trade-weighted depreciation since the eve of the Budget has been 1·4 per cent.

Was it not the Budget which caused the subsequent fall in sterling? Did the Government fail to understand that the public sector borrowing requirement forecast for this year would be totally unacceptable? At the time of the Budget, was this outcome anticipated, and has it been taken into account in the forecasts which the Secretary of State made yesterday?

I am astonished by the effrontery of the hon. Gentleman, who tells us that the public sector borrowing requirement in the Budget was too high but nevertheless supports a party which voted to make it £500 million higher.

asked the Secretary of State for Prices and Consumer Protection if he is satisfied that current legislation sponsored by his Department is operating in the interests of the consumer.

Yes, Sir.

Is the Minister aware that he is one of the two, or possibly three, remaining members of the "Hattersley for King" club if he is really satisfied about current legislation? Is he perhaps suggesting that Mr. Alan Fisher, who used to be a sycophantic Socialist until this weekend, has either become a supporter of the Conservative Party or is as misguided as apparently the Government think the rest of the British public are about the success of the Government's counter-inflation policy? When will Government stop trying to legislate themselves out of our four years of inflation and realise that it is only by reducing income tax, getting people back to work and giving them an incentive to work that they are likely to achieve their stated objectives?

I do not see what any of that has got to do with the Question tabled by the hon. Gentleman. With respect to Mr. Alan Fisher. I must say that the figures given by my right hon. Friend are reliable. The figures for this year are predetermined, and those for next year depend on the sort of wage agreement that we get later this year.

asked the Secretary of State for Prices and Consumer Protection what study he has made of the Price Commission Report on the profit margins of proprietary drug manufacturers; and what additional steps he is taking to limit these profits.

Consultations with interested parties about this report are in progress. My right hon. Friend will make a statement when these are concluded.

Does not my hon. Friend accept that much of the advertising in this area is quite unnecessary and unacceptable to the public? Does he agree that people generally, when we have this sort of report about prices in the drug industry, would expect many of these prices to come down?

I have noted what the Price Commission had to say on this matter, as has my right hon. Friend. We shall bear in mind my hon. Friend's remarks in the consideration that we are now giving to the report.

Does not my hon. Friend agree that many of the costs which drug manufacturers adduce in favour of their profits are quite unnecessary and wasteful? Has not the time come to recognise that their main customer is the community and that this industry should be brought into public ownership by the community?

I am sure that my right hon. Friend the Secretary of State the for Social Services will note my hon. Friend's suggestion.

While the Minister looks into the increasing profits of drug manufacturers, will he also examine the decline in profits of rural chemists, who are closing at a very fast rate, and perhaps do something about that?

I am aware of the problem, which, as the hon. Gentleman knows, is due to a number of factors, some of which lie outside my province.

Is it not essential that proprietary drug manufacturers should be allowed to retain sufficient of their profits to be able to carry out future research and development, the cost of which can be very high?

I think that the hon. Gentleman will recognise that my answers today have not been very forthcoming on this subject. I am afraid that I cannot be more forthcoming about the report until we have had time to consider it and what all the interested parties who have a right to make representations to us have to say.

Will my hon. Friend consult the Department of Health and Social Security on this question of drug profits, since there have been innumerable examples of drug companies putting medicines on the market which have later proved totally unsafe, showing that they had not done their research? What is the purpose of retaining profits if the sole purpose is simply to get more profits without proper research into safety for the consumer?

My hon. Friend makes a number of strong and forceful points. We have been in discussion already with the Department of Health and Social Security on the question of the profitability of the industry.

The hon. Gentleman has just admitted that he has not been very forthcoming. Will he now give an answer to the question put by the hon. Member for Renfrewshire, West (Mr. Buchan) about the proposed nationalisation of the drug companies? Is this Government policy? Will it be the Labour Party's policy at the General Election?

I hope so.

I had hoped that the House would recognise that it would not be in the interests of those with whom I am in consultation to have announced substantive responses to the Price Commission's report at this stage. Those responses will be forthcoming, as, no doubt, will be responses to the suggestions which have been made by my hon. Friends, which go somewhat beyond the recommendations of the Price Commission.

asked the Secretary of State for Prices and Consumer Protection what was the average annual rate of inflation between 1945 to 1951, 1951 to 1964, 1964 to 1970, 1970 to 1974 and from 1974 to the latest available date, respectively.

I would refer the hon. Gentleman to the answer I gave to the hon. Member for Chertsey and Walton (Mr. Pattie) on 6th June.

I am grateful to the right hon. Gentleman for that reply. I am sure that he will appreciate that the Question to which he referred was put down after I had put down this Question for oral reply today. Would not he agree that the figure quoted of 91·3 per cent. as the cumulative increase in prices since the Government took office is an appalling indictment of their stewardship? Would not he also agree that an analysis of the figures he quoted showed that during the period of office of Conservative Governments the increase in prices had been just over 5 per cent. while during the period of office of Labour Governments it has been just over 9 per cent.? Is not that one of the figures that the general public should take into account when deciding how much credence they should give the statement that the right hon. Gentleman made yesterday?

I think that the British public have far more sense than the hon. Gentleman gives them credit for. The figures demonstrate two things—first, that the world, and Western Europe in particular, has had a period of increasing inflation since 1945, and the Labour Government have been in power for the last four years of that period; secondly, the hon. Gentleman picks his dates in an arbitrary and what some people would regard as a trivial fashion. The dates he chooses are General Election dates, but the trends change between General Elections. As I have told the House many times—and will no doubt have to repeat again many times—the increase in inflation in this country, which we have at last brought under control, began in the late winter of 1972 under the Government of the right hon. Member for Sid-cup (Mr. Heath) with Lord Barber at the Treasury.

Will not the right hon. Gentleman concede for once that the facts are that under successive Conservative Governments the rates of inflation, based on an average annual rate, are almost half of those under successive Labour Governments in similar periods of time?

Even that supplementary question is not quite statistically right. But even accepting that it has some approximation to statistical accuracy, which is an achievement in itself for the hon. Lady, let me again make the point, which is the only point worth making, that there have been a number of factors which I wish that one day the hon. Lady would pay special respect to. For example, there was the 400 per cent. increase in oil prices in the winter of 1973–74. This is the sort of thing that determines inflation in this and other countries. The important point about inflation in this country is that it is coming down; we have stabilised the rate. That is in part the achievement of the British people as well as of Her Majesty's Government. I wish that just for once the Conservative Party would celebrate that achievement as something that is very well worth while.

is my right hon. Friend aware that I do not know which I am most worried about—whether Conservative Members actually believe what they are saying, with all the stupidity and ignorance of history that that would involve, or whether they are doing it simply as a cynical stunt to try to convey to people outside that there is some coincidence between the rate of inflation and General Election dates? Would not that make people outside as stupid—which is inconceivable—as hon. Members opposite?

Recent history demonstrates the point my hon. Friend makes. The Conservative Party was saying that inflation would begin to rise again in the early summer when it thought that there might be a spring election and wanted to suggest that things would only remain moving in the right direction until that election was over. Now the Conservative Party is making the same error and the same false prophecies again. My only pleasure in all this is that it will be proved right in one thing only—that is, that its constant hope that there will be national deterioration which will bring with it political success for the Conservatives will be proved absolutely false.

asked the Secretary of State for Prices and Consumer Protection if he is satisfied with the arrangements for consumer representation on the subject of rail fares.

asked the Secretary of State for Prices and Consumer Protection if he is satisfied with the arrangements for consumer representations on railway matters.

Paragraph 35 of the White Paper on nationalised industries (Cmnd. 7131), published on 5th April, describes the Government's intention to extend the powers of the Central Transport Consultative Committee and in particular to give it a new power to consider the British Railways Board's general tariff structure.

While welcoming the intention of the Government to give extra powers to the transport users' consultative committees to consider fare increases, may I ask the hon. Gentleman whether he can explain why, in the circumstances, the Government, on the recent Transport Bill, resisted amendments that would have achieved that result?

The Government will introduce legislation to bring about the intended effect as soon as it is possible to do so.

Will my hon. Friend congratulate British Rail on its initiative last weekend in giving the elderly the opportunity to travel free on the railways? Is not this a good example of public enterprise which could perhaps be taken up by other enterprises?

I have noted a number of examples of sensible promotional work by British Rail of this kind, and indeed its more recent statement that it is looking at the possibility of cheaper fares for families, too.

On a point of order, Mr. Speaker. Does free rail travel come under the subject of prices and consumer protection?

It is no good asking me.