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Volume 972: debated on Monday 22 October 1979

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asked the Secretary of State for Trade what is the present inflation rate.


asked the Secretary of State for Trade what is the current year-on-year inflation rate for wholesale prices; and by what proportion it has changed since 3 May.


asked the Secretary of State for Trade what is the present annual inflation rate expressed as a percentage of the rate on 3 May.


asked the Secretary of State for Trade by what percentage the rate of inflation has increased on that obtaining on 3 May.


asked the Secretary of State for Trade what has been the increase in retail and wholesale prices since May.

The retail price index has increased by 8 per cent. since May and by 16·5 per cent. over the last 12 months. Wholesale prices have increased by 17 per cent. for industrial inputs and 14½ per cent. for outputs over the year to September 1979. In May the figures were 9·7 per cent. and 10·4 per cent. respectively. The rise since May has been 5¼ per cent. for inputs and 6¼ per cent. for outputs.

I propose to call first those hon. Members whose questions are being answered.

In view of her reply, will the right hon. Lady persuade her right hon. Friends to withdraw the Competition Bill since the evidence of the last few months shows clearly the need to strengthen the Price Commission rather than to abolish it?

The evidence of the last few months shows nothing of the kind. As the rate of inflation was approximately as high, or even higher, than at present during more than half of the period when the last Labour Government were in office, and since I do not recall the hon. Member for Farnworth (Mr. Roper) asking vehement questions about prices then, I must conclude that his concern about prices is determined by which Government happen to be in power.

I can claim a greater consistency. I was concerned then, as I am now—and even more so since the higher prices which consumers are now having to pay are the direct result of the complete failure of the last Government's policies.

Does the right hon. Lady accept that her reply is a disgrace in the light of her party's stance at the last general election? Is she aware that most people believe that the sweetness of her promises then have turned sour? Will the right hon. Lady resign?

No, Sir. The only thing that I predicted during the last general election campaign was that many price increases in the pipeline would have to come through after the election. I was absolutely specific about those increases. At the time that I made those forecasts, which have proved to be correct, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who knew of the increases, said that there was no prospect of a further inflationary outburst. That is typical of the political dishonesty which characterised the last Labour Government's disastrous prices record.

Is the Minister's indifference to the galloping rise in inflation on all fours with the recent statement by the Secretary of State which expressed contempt for what he called "consumerism"? By that I assume that he meant the interests of consumers. Is it the Government's policy to show contempt for consumers?

The hon. Member is wrong on two counts. First, my right hon. Friend made no such statement. Secondly, I am not impervious to the present increases in prices. Price increases were not invented on 3 May. A rising inflationary trend was clearly established before we took office. The trend is caused by the excessive growth in the money supply and real earnings at a time of static productivity. We have taken steps through our economic policies to halt the growth of money supply. Halting the growth in earnings depends largely on a responsible acceptance of economic realities.

Since the Opposition do not seem to understand, will my right hon. Friend stress again that the Price Commission made no discernible difference to price inflation and that the country is now paying the bill for the incompetence and weakness of the Government led by the present Leader of the Opposition earlier in the year?

My hon. Friend is absolutely right. Nobody can be satisfied with the current rate of inflation. However, it is certain that if the Labour Party had won the election and had attempted to meet even half of the spending commitments in its manifesto, income tax, VAT and prices would be much higher than they are today.

Does the right hon. Lady remember coming to my constituency when the rate of inflation was in single figures and slamming the then Labour Government? Will she come to Swindon, go round the shopping centres and explain why inflation is double what it was when she last visited Swindon? Perhaps this time she will give me notice that she is coming.

I am most moved by that delightful invitation. I shall be pleased to accept it. I shall, indeed, be in a position to say why, when I last visited the hon. Member's constituency there was single figure inflation. I insisted that it would not last for long and that as soon as the election was over the profligacy of the last Labour Government would have to be paid for. That is exactly what is happening today.

Does my right hon. Friend recall that she told the hon. Member for Farnworth (Mr. Roper) that Labour Members had suddenly appeared on the Opposition Benches for Question Time to ask about prices although we never heard from them when the Labour Government were in office? Could this be because of bullying by the NEC at Brighton? Would it not be helpful and fair to those hon. Members if we kept a league table of how they perform?

Does the Minister agree that her early prices record made a major contribution to her party losing its deposit in the Manchester, Central by-election?

I certainly do not. I shall not accept lectures about rising prices from any Labour Member who supported a Government who more than doubled prices and, moreover, managed to achieve that gruesome record when world commodity prices, exclusive of oil, were rising by less than 2 per cent. a year. The only thing that the Labour Party can teach anyone about prices is how to double them.

Will my right hon. Friend help Labour Members by reminding them that a Labour Government managed to achieve a VAT rate of 25 per cent. which was 66 per cent. higher than it is at present?

When does the Minister expect inflation to be down to single figures again?

I am extremely flattered by the presence of the Leader of the Opposition. This Government are not in the business of making wrong forecast after wrong forecast and misleading people over and over again as did so frequently the previous Chancellor of the Exchequer, Mrs. Shirley Williams and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley).

If the right hon. Lady cannot give us a date, can she say whether her party's policy is to reduce inflation to single figures? If so, will that be in the lifetime of this Government?

The right hon. Gentleman's supplementary question would have been more appropriate during exchanges on question No. 3.

Is it not a fact that between 1974 and 1979 even the Oxford University Press edition of "The Story of Moses" more than doubled in price?

My hon. Friend is right. That was among many items which more than doubled in price.