19. Mr. H. Wilson
asked the Chancellor of the Exchequer whether he is aware of the statistics recently published by the Organisation for European Economic Co-operation showing that in the first half of 1952 the cost of living rose more in Britain than in any other Organisation for European Economic Co-operation country, including the United States of America and Canada; whether he accepts the validity of these figures; and what special steps Her Majesty's Government intend to take to fight the rising cost of living.
§ Mr. R. A. Butler
I am aware of these figures. In spite of the rise in food prices due to the reduction of subsidies, the 844 increase in the Interim Index of Retail Prices in the United Kingdom in the first eight months of this year (5½ per cent.) was less than in the corresponding period of 1951 (9½ per cent.).
The last of the increases in food prices associated with the Budget changes has now been announced, and as far as import prices are concerned I hope that the prospects are for stability.
Is the right hon. Gentleman aware that during the period of the late Government, when world prices were rising at a very fast rate indeed, the cost of living in this country rose less than in most other countries, but in the first six months of this year, with many world prices falling, the Government had succeeded in bringing about a situation in which the cost of living has risen more than in other countries?
§ Mr. Butler
I am aware that the cost of the living index has risen considerably less—4 per cent. less—in the first eight months of this year than in the first eight months of 1951. Further, the House must also be aware that one of the main reasons for the change was some changes that were deliberately introduced in the Budget, which have been compensated for, as the House well knows, by many forms of relief to many sections of the population. In the circumstances, and in view of the present level of the terms of trade, I have hopes of a prospect of stability, to which I referred in my original answer.
Is my right hon. Friend aware that if it had not been for the valuable action taken by the Chancellor of the Exchequer there would have been no cost of living at all because there would have been no living?
§ Mr. Butler
Yes, Sir. The hon. Lady is quite correct. If we had allowed the value of the £ to be lowered, due to a decline in our balance of payments position and in our reserves, we should certainly have been faced with a devaluation, increased costs of our raw materials, danger of unemployment, danger of losing much of the food that we must get from abroad and a danger of starvation.
§ Mr. Bottomley
In view of the fact that food and raw material prices are 10 per cent. down compared with this time last 845 year, ought not the Government to be able to give some indication of when a fall in the cost of living is to operate?
§ Mr. Butler
I do not think that any Chancellor of the Exchequer would be wise to forecast these matters, because he might raise false hopes in the minds of many people to whom these matters are questions of life and death. All I can say is what I said in my original answer with absolute sincerity, that we may have reached a more stable position and recent signs in the index, as taken this month, show that there are certain tendencies towards reduction.