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Prices

Volume 958: debated on Monday 20 November 1978

The text on this page has been created from Hansard archive content, it may contain typographical errors.

10.

asked the Secretary of State for Prices and Consumer Protection by how much retail prices have increased since February 1974.

11.

asked the Secretary of State for Prices and Consumer Protection what has been the cumulative rate of inflation since February 1974 to the latest available date in West Germany, Japan, France, the United States of America and the United Kingdom, respectively.

13.

asked the Secretary of State for Prices and Consumer Protection in which month prices will have doubled since February 1974, assuming that his forecast of 7·9 per cent. inflation at the end of the year is correct.

From February 1974 to the latest available date, price indices for West Germany, Japan, France, the United States of America and the United Kingdom have risen by 20·2 per cent., 47·3 per cent., 57·7 per cent., 40·9 per cent. and 97·7 per cent. respectively. The month to which the hon. Member for Derbyshire, South-East (Mr. Rost) refers will not, on the interpretation of the forecast which he has chosen, be reached this year.

On a point of order, Mr. Speaker. Is it possible for the Secretary of State to read out that answer more slowly so that we can take down all the figures?

In view of the figure for the United Kingdom, has the Secretary of State any special plans ready for the day when it reaches 100 per cent? Is he aware that this is the worst record of any Government since statistics were first kept? Is not this a much more valid point than the fact that he keeps trotting out, that we have had inflation of less than 10 per cent. for the past year?

When inflation was running at more than 10 per cent., the Opposition did not think that getting it down to single figures was unimportant. In those days I was told—I have all the quotations of the hon. Member for Gloucester (Mrs. Oppenheim)—that we would never do it and that if we did we would never stick to it. The figure of 7·8 per cent. has become unimportant only since this Government achieved it.

As for the overall increase in inflation, what the hon. Gentleman must bear in mind is that four and a half years ago we had in this country a condition of inflation that had been induced, and knowingly induced, by a Government who had allowed the money supply and the public sector borrowing requirement to get totally out of control. That is why this country has an inflation record different from the inflation records of our competitors.

Is it not a matter of great concern to the right hon. Gentleman that prices in Britain have gone up by four times as much as prices in West Germany and by about twice as much as prices in Japan, the United States and France since this Government came to power? As adverse external factors have affected all these countries, why has the situation been so much worse in Britain?

I explained it in answer to the previous supplementary question, but I shall gladly do it again. The simple fact is that those countries were fortunate enough not to have in 1973 and 1974 Governments who allowed the money supply and the public sector borrowing requirement to get out of control.

If I now ask the right hon. Gentleman to explain why prices have doubled under Labour, may we please be spared the usual list of miserable excuses, blaming everybody else and everything else except the real cause, which is the failure of Socialist policies?

I am astonished that the hon. Gentleman asks that question. The criticisms that I make are of the Conservative Government of 1973 and 1974. The faction of the hon. Gentleman's party that he claims to support is making exactly the same criticisms of the Conservative Government as I have made this afternoon.

Does my right hon. Friend agree that what is as important as the level of inflation in different countries at a certain point in time is the rate at which inflation is changing in those countries? Measured in those terms, Britain's present position compares favourably with that in the great bulk of Western European countries.

Our inflation rate is now appreciably lower than the overall inflation rate in countries belonging to the Organisation for Economic Co-operation and Development. The significant thing about that, to paraphrase my hon. Friend, is that the Opposition's reaction is not pleasure that the country is doing well but regret that they are doing so badly.

Is the right hon. Gentleman aware that consumers would not concur with him that this country is doing well? That is not what they find from their shopping baskets. When he trots out his moth-eaten alibis four and a half years after the Conservative Party was in power, and when he next boasts that the current rate of inflation is at or below that of our main competitors. will he bear in mind that the annual average increase in inflation under this Government is not 8 per cent. but 16 per cent.? That is the level that matters to consumers and that is the level that he must compare with other countries during this period.

The hon. Lady somewhat didactically refers to the appropriate figure for these matters. I think that her judgment on these matters will perhaps best be understood if I remind her that three months ago, when I told her that inflation would stay at or about 7·8 per cent., she described it as fraudulent, lying and a perversion of the truth. I think that puts her judgment in the proper perspective.

On a point of order, Mr. Speaker. Is it in order to ask the right hon. Gentleman to provide evidence of where I said this was a "lying" rate of inflation?

Further to that point of order, Mr. Speaker. The reference is Hansard, 12th June, column 633.

Order. I could not have been in the Chair, or I would have asked for the word to be withdrawn.

Will the Secretary of State tell us who was telling the truth in October 1974 when his predecessor the right hon. Member for Hertford and Stevenage (Mrs. Williams), in an election broadcast, expressed the view that there were no more price increases in the pipeline? Surely that suggested that no problem of inflation had been inherited from the previous Government at that time.

I do not believe that that was the suggestion. [HON. MEMBERS: "Oh."] Had it been so, it would manifestly have been wrong on the evidence. The hon. Gentleman must say—though this afternoon will probably not provide him with the opportunity—whether the fiscal conduct of the Conservative Government between 1973 and 1974 is a record of which he is proud. It is to that to which I refer, and it is to that to which I shall continue to refer.