HC Deb 21 April 1970 vol 800 cc221-2
10. Mr. Kenneth Baker

asked the Chancellor of the Exchequer what was the rise in the cost of living in the last financial year.

Mr. Roy Jenkins

Between March, 1969, and March, 1970, the index of retail prices rose by 5.1 per cent.

Mr. Baker

Is not this an alarming and disgraceful rise? Is not this the greatest area of the Government's failure? As the Chancellor said a week ago today that one of the root causes of this inflation was the wage spiral, and as he said that wages cannot for long continue to rise at the present rate, what does he intend to do about it?

Mr. Jenkins

This is certainly a higher rise than one would desire to see. We must bear in mind that this was the second year following devaluation, which inevitably involved some price increases. During roughly this same period—February, 1969, to February, 1970—retail prices in the United States, which had not had a devaluation, rose by 6.3 per cent.

Mr. Bagier

Has my right hon. Friend made any estimate of the rise in the standard of living as compared with that of the cost of living for that year?

Mr. Jenkins

There is indeed a significant difference between the cost of living and the standard of living, though it is certainly the case that in 1969, as it was my intention to shift resources in to the balance of payments, we devoted the major part of our increased producivity to improving the balance of payments—and a very striking and worth-while improvement it was.

Mr. Higgins

When was there last an increase of this size? Was it greater or less than the Chancellor expected this time last year?

Mr. Jenkins

I cannot tell the hon. Gentleman exact figures offhand. There were several years in the 1950s with well over 4 per cent. It was not, I think, significantly different from what I was expecting.

Mr. Frederick Lee

Is it not the case that the party opposite agrees with free collective bargaining, and that had the Government brought before the House an Order to stop in any way the advances about which hon. Members opposite now complain they would undoubtedly have prayed against that Order? Is it not hypocrisy to go on with this?