HC Deb 14 June 1955 vol 542 cc419-20
41. Dr. King

asked the Chancellor of the Exchequer what steps he proposes to take to implement the resolution of the House of 19th March, 1954, to combat the rise in the cost of living.

Mr. R. A. Butler

Since the House passed the resolution to which the hon. Member refers, the real value of retirement pensions and other national insurance benefits has been considerably increased. It is the constant concern of the Government to safeguard that value, but positive reductions in the cost of living must come from reductions of costs and from increases in productivity.

Dr. King

With all respect to the Chancellor of the Exchequer, may I ask whether he is aware that he has missed the point of the Question, which referred not to those whose pensions have increased but to those people living on fixed incomes, who do not benefit from any tax concession, wage increase or profit increase, but to whom the only way of giving aid is to reduce the cost of living? Since the Government's policy for the last three and a half years has failed, is it not time that they had a new policy to reduce the cost of living?

Mr. Butler

The country seems to find our policy eminently satisfactory.

Mr. J. T. Price

If the right hon. Gentleman makes these wide claims for his policy with regard to the cost of living, will he please explain to the House why he gave permission last week to the Court of Governors of the Bank of England to increase the fiduciary issue by £50 million, setting the printing presses to work at double speed?

Mr. Butler

I think it would be much better if such an important Question were put on the Paper. It would be unfortunate if the country were to derive any impression of abnormality from any seasonal increase in the fiduciary issue, for which similar examples can be shown in previous years.

Mr. Gaitskell

I understood the Chancellor to say that any hope of a reduction in prices must depend on a fall in costs. Can the Chancellor say whether he honestly thinks that in the present inflationary situation such a fall in costs is in the least likely?

Mr. Butler

I said that it should come from a reduction in costs and an increase in productivity. I would not accept that the situation is unduly inflationary. There are trends, however, which it is the policy of the Government to combat and which the Government's policy is so far having success in combating.

Mr. H. Wilson

Since the index of world prices shows a fall of 20 per cent. compared with a period of exactly 12 months ago, will he say whether that is the fall in costs that he is looking for and when we can expect to see that fall in prices passed on to the prices of goods in the shops?

Mr. Butler

I think I should need notice of any particular question. I could not give an accurate answer if I did not have notice of that question.

Mr. C. Williams

Did my right hon. Friend read a very interesting article by one of the Scottish Lady Members in "The Star" two nights ago, in which she said that this line of argument had failed completely at the Election?