§ Q5. Mr. Barnettasked the Prime Minister if he will appoint a Minister with special responsibility for dealing with inflation.
§ The Prime MinisterNo, Sir.
§ Mr. BarnettThe Prime Minister said last week that he agreed with Lord Hailsham when he said in another place that there was no inflation crisis. Does he disagree with the extravagant remarks of Lord Hailsham when he compared our inflation with the disease that destroyed the Weimar Republic? If he does not agree with his Cabinet colleague on that, will he make it quite clear to the House that he does not intend to use the money supply to increase bankruptcies and unemployment?
§ The Prime MinisterAs I said, and as the hon. Gentleman has acknowledged, my noble Friend the Lord Chancellor said that there was no crisis in this country. I fully agree with that. My noble Friend added that inflation had proved the disease which brought down the Weimar Republic. I fully agree with that also. Every Government must be responsible for the control of the money supply through the central credit system, as were the Government which the hon. Gentleman supported.
§ Mr. Kenneth LewisWill my right hon. Friend bear in mind that one of our hon. Friends has just told us from the 1079 Front Bench that it will cost £160 million to give the old-age pensioners an increase of £2 a week? Will he therefore make it clear to the trade unions and all who may be concerned that increasing wage demands are of no advantage to those on fixed incomes, and no help to the Government, who want to increase those incomes?
§ The Prime MinisterAs the whole House has, I think, always recognised, inflationary wage demands always bear most severely on those who have retired and on the poorer members of the community.
§ Mr. DuffyIs the Prime Minister aware that Britain is the only country within the O.E.C.D. in which inflation is still accelerating? Will he bear in mind last week's public statement by the Director-General of the National Economic Development Council that an expanded economy and not a crude Government squeeze on wages and prices is the only way to deal with the inflation problem?
§ The Prime MinisterI would be the first to acknowledge that growth has its own part to play in dealing with inflation. It must also be quite clear to the whole House that the level of growth which in the best possible circumstances can be obtained from the British economy cannot possibly compete with the scale of wage demands which are being made in some cases at present. This must be a fundamental fact. Therefore, what is required is an element of growth in the economy which should be as large as possible; but at the same time the economy must be brought into balance by other means, including all the techniques of monetary control and wage increases which are not inflationary.
§ Sir H. Legge-BourkeFor the sake of historical accuracy, would my right hon. Friend draw the attention of our noble Friend, Lord Hailsham, to the fact that it was the deflation which followed the inflation that brought down the Weimar Republic?
§ The Prime MinisterA considerable number of factors were involved in the demise of the Weimar Republic.
§ Mr. Harold WilsonAlso on the subject of historical accuracy, since the right 1080 hon. Gentleman is reported, I am sure unfairly, as attributing to Her Majesty's Opposition responsibility for supporting inflationary wage claims, to get it on the record, is he aware that the Leader of the Opposition in fact sent a direct message to the T.U.C. asking it by all means in its power to reject and frustrate the incomes policy of the Government approved by this House—and that this was done by the Leader of the Opposition in September, 1966?
§ The Prime MinisterI do not quite know what the present Leader of the Opposition is referring to. Is he referring to a message of his own which he sent to the T.U.C. asking it to fight inflation? I hope that in all the present circumstances he will always send messages to trade unions condemning every inflationary wage demand they make.
§ Mr. Harold WilsonThe right hon. Gentleman is aware of what I told him last week, both about the strikes and about the situation in South Wales. If he was not clear about my question, is he aware that a message was sent to the T.U.C. directly and in terms on the eve of Congress asking it to reject what this House had voted for in support of the prices and incomes policy of the then Government, and that the Leader of the Opposition who sent that message publicly was the present Prime Minister?
§ The Prime MinisterIt is characteristic of the attention which the right hon. Gentleman pays to historical accuracy that that is a gross distortion of the truth.
§ Mr. MartenAlso as a question of historical accuracy, does my right hon. Friend recall that in 1951, which was the last year of the post-war Labour Administration, the retail price index rose by 12 per cent., and that by 1953, after two years of Conservative Government, it was down to 2½ per cent.? Is not that the sort of time-scale we should be looking at these days, instead of instant Government?
§ The Prime MinisterWhat my hon. Friend has said is absolutely true. But the Leader of the Opposition is not concerned with the historical accuracy of that period. What he is engaged upon is writing the authorised version of what happened in 1964–69.
§ Mr. Harold WilsonFurther to the interests of historical accuracy which that will serve, since the Prime Minister has now sought to repudiate what he said in 1966, will he publish the text in the OFFICIAL REPORT?
§ The Prime MinisterThe text is already available for anyone who wants to see it. Unlike the right hon. Gentleman, I shall not have to go on to produce a revised version in three volumes in due course.
§ Mr. ThorpeDoes not the Prime Minister agree that since no post-war Government have yet evolved a realistic incomes policy tied to productivity, which is the only way to cure inflation, all these historical illusions from both sides of the House are as irrelevant to the problem of tackling inflation as they are to the affairs of the House?
§ The Prime MinisterI do not think that they are entirely irrelevant. It is true that all Governments have had to grapple with a complex of factors which in the post-war world of full employment have been leading up to an inflationary situation, but if we look at the rate of growth of inflation we see periods during which there was a decline, and it was gradually brought under control. I think that the right hon. Gentleman recognises that there is no easy short-cut answer to these questions. A complex of economic policies is required to deal with them. Policies on taxation, Government expenditure, industrial relations and wages are required if we are to grapple with them.
§ Mr. SpeakerOrder. For the sake of historical accuracy, Question Time is over.
§ Mr. BarnettOn a point of order, Mr. Speaker. Owing to the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.