Skip to main content


Volume 978: debated on Monday 4 February 1980

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


asked the Secretary of State for Trade what is the latest annual increase in the rate of price inflation.


asked the Secretary of State for Trade by what percentage the rate of price inflation has increased since May.

The retail prices index increased by 17·2 per cent over the last 12 months and by 10·3 per cent. over the 12 months to last May.

As the Department of Prices and Consumer Protection has now been absorbed by the Secretary of State's Department, who is responsible for keeping prices down? Most Ministers are increasing prices. There has been an increase in VAT, MLR and several other increases. Who is responsible for keeping prices down?

The hon. Gentleman will remember those unhappy times when his Government had a Secretary of State for Prices and Consumer Protection and a Department, yet prices doubled during that period. The sooner that the hon. Gentleman realises that having a Department that keeps records and reports on prices does not provide a way of controlling them, the better.

Does not the Minister agree that most of the components that make up that considerable increase across the board are a deliberate result of Government policy? They are not due to the intervention of outside forces. How does he relate that to the promises made to the electorate last May to the effect that the Government would solve the problems of prices, mortgages and so on? Does he not think that the general election was won on a completely false premise?

I shall not bore the House by quoting from the speeches of the former Chancellor of the Exchequer and of the former Secretary of State for Prices and Consumer Protection. At the time of the election they both confirmed that inflation was on an upward trend and that the figures were bound to rise during the year.

Is it not a fact that under the previous Labour Government prices more than doubled? The Opposition have an absolute cheek to lecture my hon. Friend on this subject.

Once again, my hon. Friend has put his finger on the problem. It is bad conscience.

Has the Minister examined the crippling effect of 15 per cent. VAT upon our hospital services and upon all supplies? Is it not nonsense? Will he arrange that one Department does not have to pay for another Department's increased costs?

The hon. Gentleman knows that the change in the rate of VAT, and the consequent increases, were part of a major switch from direct to indirect taxation. That switch is, and was, necessary. However, it gives rise to certain problems, as the hon. Gentleman has suggested. The overall long-term effect should be beneficial.

Will the Minister explain what contribution the doubling of VAT, the increase in minimum lending rate, the 10 per cent. increase in gas prices above that asked for by the BGC, and all the other increases in the public and private sectors, make to the Government's counter-inflation policy? All those increases have been allowed to go ahead unchecked. Should there not be a Minister who is responsible? Is there any counter-inflation policy? When do the Government expect to see inflation in single figures, as it was when they took office?

It may be disappointing news to the right hon. Gentleman, but the only time that the previous Labour Government showed any sign of gaining control over inflation was when they cut public spending and started to take control of the money supply in accordance with the instructions of the IMF. That is the long-term direction in which the country must move.