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Inflation

Volume 175: debated on Thursday 5 July 1990

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To ask the Chancellor of the Exchequer what is the underlying rate of inflation.

There are a number of ways of estimating the underlying rate of inflation. As measured by the RPI, excluding mortgage interest payments and the community charge, it was 7 per cent. in May.

Will the Minister confirm that the measure of the RPI which excludes mortgage interest payments is now at its highest level since July 1982? Why do some Conservatives now try also to exclude the poll tax from the calculation? Is not this very unfair on people with special needs, not least the many severely disabled people who are now paying over £700 more in poll tax than they paid in rates, due to the repeal of Labour's Rating (Disabled Persons) Act 1978?

I had a hunch that the right hon. Gentleman would raise the question of the disabled, so before I came here, I looked up the figures. In 1989–90 the Government will spend £8.3 billion on the disabled, an increase of £4 billion in real terms since 1979 when the right hon. Gentleman was responsible for disabled people.

Will my hon. Friend give the House some idea what the level of inflation would be if it were calculated on the same basis as for our European Community partners?

The only other country in the European Community that counts mortgage interest payments in its RPI is Ireland. Our figures would be far lower if mortgage interest rates did not count towards the RPI.