§ Q3. Mr. Winnickasked the Prime Minister which Ministers are responsible for keeping a check on increases in prices, rents and mortgage interest rates, arising from devaluation; and if he will make a statement.
§ The Prime MinisterFor prices, the Minister with responsibility for the industry or service concerned, for rents, my right hon. Friends the Minister of Housing and Local Government and the Secretaries of State for Scotland and Wales, and for mortgage interest rates, my right hon. Friend the Chancellor of the Exchequer. In addition, my right hon. Friend the Secretary of State for Economic Affairs has a co-ordinating function.
§ Mr. WinnickIs the Prime Minister aware that while there is a tremendous amount of good will to get Britain out of her economic troubles, there is a great deal of resentment at unjustified price increases? What action do the Government propose to take over price increases which have simply nothing to do with devaluation but with a desire to make more profits?
§ The Prime MinisterMy right hon. Friend the Secretary of State for Economic Affairs told the House last week what discussions we are having industry by industry on this problem. The whole House, I am certain, will agree that price increases not directly attributable to increased import costs following devaluation are totally unjustified.
§ Mr. Tom BoardmanDoes the Prime Minister agree with the statement made by the Secretary of State for Economic Affairs to the effect that there was bound to be a cut in the standard of living of British people in the next 12 months— the statement made on 9th December?
§ The Prime MinisterI agree with the statement which was made last Saturday. As the Government have made clear, hopes of a substantial rise in standards of living in the following year depend on the efforts of all of us to get the imports-exports balance right early next year.
§ Mr. GardnerHas my right hon. Friend seen Motion No. 133? In view of the fact that a great many people are making unjustified price increases and blaming this on to devaluation, will the Prime Minister take a simple measure of putting the onus of justifying those increases on to those who make them?
§ The Prime MinisterI have seen the Motion on the Order Paper. We are watching very carefully some of these quite unjustified price rises, and my right hon. Friends are in discussion with the industries concerned.
§ Mr. MaudlingIs it not part of Government policy that prices should rise faster than wages in order to choke off imports and divert expenditure from home consumption to exports?
§ The Prime MinisterIt is Government policy that where increased costs—[HON. MEMBERS: "Answer the question."]—I am trying to answer the question so that even hon. Members opposite can understand it. Where there are increased costs due to devaluation it is right that prices should rise in those cases, but not in other cases. As the right hon. Member for Barnet (Mr. Maudling) said, this does account for part of the diversion of resources. He is quite right about that. In regard to wages, we feel that the maximum restraint is needed. How far earnings will go up as a result of increased opportunities for production is another matter.
§ Mr. WhitakerWhy should not employers' associations such as the C.B.I. vet price increases in the same way as the T.U.C. is vetting wage increases?
§ The Prime MinisterWe are having discussions with the C.B.I. So far, I believe that the discussions have been reasonably constructive, but we shall need to have discussions with individual trade associations in individual industries.
§ Mr. MaudlingDo I take it that the Prime Minister's answer to my earlier question was "Yes"?
§ The Prime MinisterI have forgotten what the question was now.
§ Mr. MaudlingMy question was—is it not part of the Government's policy that prices should rise faster than wages in order to choke off imports and divert resources to exports?
§ The Prime MinisterTaking prices as a whole and the year as a whole, the answer is "No". As regards prices attributable to import costs, it is inevitable that they will rise.