HC Deb 31 May 1956 vol 553 cc410-2
5. Mr. Lewis

asked the Chancellor of the Exchequer if he is aware that the £1 depreciated in purchasing power by Is. 6d. during the last year; and what action he proposes to take to restore the pound's purchasing value back to what it was in October, 1951.

6. Mr. Hale

asked the Chancellor of the Exchequer whether he is aware that on the basis of the old cost-of-living scale of 1947 the cost of living has advanced by eight points during the first four months of the year; and whether he is now in a position to announce the Government's proposals for preventing any further increase.

7. Mr. Dodds

asked the Chancellor of the Exchequer if he is aware of the concern created by the latest official announcement that the cost-of-living index has again risen to a record high level with a two points increase in a month; what consideration has been given to the matter by the Government; and what action is to be taken to halt this upward trend.

The Economic Secretary to the Treasury (Sir Edward Boyle)

First, I must correct an error in the first part of Question No. 6. On the old basis, with June, 1947, equalling 100, the Retail Prices Index rose between December, 1955, and April, 1956, not by eight points but by four points. For the rest, I would refer the hon. Members to the speech made at Newcastle last Friday by my right hon. Friend the Chancellor of the Exchequer.

Mr. Lewis

Yes, but surely we have been hearing this story for the last five years, and not only last week. Is the Minister aware that every action the Government have taken over the last five years has been responsible for depreciating the purchasing value of the £? If that is the case—and it is the case— should we not ask the Chancellor of the Exchequer to alter his policy completely and to go back to what was in operation before, so that we can have a £ which is really worth something?

Sir E. Boyle

It certainly is not the case. For example, the rates of Purchase Tax, despite the last Budget statement, are still lower than they were when we took office.

Mr. Hale

Is not the Minister aware that we are facing a very grave financial crisis, that the Plimsoll line is now beneath the water, and that every measure the Government have taken up to now has been calculated to increase prices? In the circumstances, why do they not resign?

Sir E. Boyle

I can assure the hon. Gentleman that we are very happy on this side of the House in taking all the necessary steps to put the position right. If he will read the speech of last Friday, he will find that my right hon. Friend did not in any way mitigate the serious features of the present situation.

Mr. D. Marshall

Is the Minister aware that the hon. Member for West Ham, North (Mr. Lewis), who asked Question No. 5, is asking for the most drastic policy of deflation?

Mr. Jay

For the statistical enlightenment of the House, will the Economic Secretary say whether the rise of two or three points in the index, with which the Chanccllor of the Exchequer threatened us two days ago, is additional to the rise of three points which we have had already this year, and whether a rise of six points every six months in the cost of living is the Chancellor's definition of a plateau?

Sir E. Boyle

Perhaps the right hon. Gentleman will put that question down.

Mr. Dodds

In view of the ominous situation, does the Economic Secretary really thing that the speech at Newcastle, with its exhortations about holding the line, will do the trick? Will not the hon. Gentleman and his hon. Friends do something before we drift into disaster, which will mean another round of wage increases and a shooting up of the cost of living?

Sir E. Boyle

I do not think that I can add anything to the Newcastle speech, which answered the points which the hon. Gentleman has raised. There will be another speech reported this afternoon.

Mr. Gower

Were not the decisions of the Chancellor to reduce Government expenditure, to tax profits, and to give a fillip to the Savings Movement not all steps in the right direction?

Mr. H. Wilson

Will the hon. Member state whether it is or is not a fact, as suggested in certain papers, that the rise in the old Index in the first four months of this year is greater than in any comparable period since 1948? Will he not now answer the question asked by my right hon. Friend the Member for Battersea, North (Mr. Jay) whether a rise of this magnitude fits in with the Chancellor's definition of stability, as stated in his Newcastle speech?

Sir E. Boyle

The first part of that question does not arise out of what is on the Order Paper. If the right hon. Gentleman will put it down, I will certainly answer it and give the House the facts. I cannot add to what I have said in answer to the right hon. Member for Battersea, North (Mr. Jay).