§ 26. Mr. Dodds
asked the Chancellor of the Exchequer if he is aware of the concern at the recent announcement that the cost-of-living index has been increased by two points in one month; and what action is being taken to restore the index to a similar position as that which applied in October, 1951.
§ Mr. R. A. Butler
I am most anxious that the rise in the cost of living should be checked: but, as I have said many times, this cannot be done by Government action alone. The Government, for their part, have taken a number of anti-inflationary measures, of which the House is aware, and we are watching their effects carefully. But it is equally essential that all sections of the community should play their appropriate parts by increasing productivity, by reducing the prices of their products wherever possible, by exercising restraint in wages and dividend policies and by saving more.
§ Mr. Butler
I can only say that by our policies we reached a state of approximate equilibrium in this vital matter between 1953–54 for the first time for many years, and right hon. and hon. Gentlemen opposite would be the first to acknowledge that. It is also the case now that, owing to the increasing consumer demand and other reasons connected with inflation, which are in fact symptoms of our advanced prosperity, at the present moment we are undergoing a degree of inflation which we are attempting to cure. I hope that our policies will be crowned with the same success as after the first two and a half years of our Administration.
§ Mr. Gaitskell
While we all appreciate the Chancellor's difficult position in the light of what was said a few months ago, will he at least refrain from taking positive steps to increase the cost of living, for instance, through Purchase Tax increases in the new lists? Will he further follow the line he started last night in abandoning the increase in Purchase Tax on baskets and bags and abandon it on a lot of other things which he has brought into the Schedule?
§ Mr. Butler
The answer broadly, as is sometimes usual with the right hon. Gentleman's questions, is "No, Sir"; but I will undertake that we shall pursue our policies with a view to attempting to restore this equilibrium in the wage-price and other spirals which we have recently experienced.