INFLATION (Hansard, 20 April 1971)

§ Q2. Mr. Carter
asked the Prime Minister how many letters he has received since 1st January on the subject of inflation.

§ The Prime Minister
Two hundred and seventy-seven, Sir. Many of these correspondents express their concern about the impact of inflationary wage settlements on prices.

§ Mr. Carter
I thank the Prime Minister for that reply, but will he not agree that the Government's complete loss of control of the economic situation was adequately summed up yesterday in remarks of the Ministry of State at the 942 Department of Employment when in reply to my right hon. Friend the Member for Blackburn (Mrs. Castle) he said that cost inflation was the cause of unemployment, yet in a subsequent reply to his hon. Friend the Member for Harrow, West (Mr. John Page) he said that he could produce no evidence to link cost inflation and unemployment? Has the Prime Minister any evidence?

§ The Prime Minister
I was here when my hon. Friend gave his answers to questions, and that was not the gist of what he was saying. I should have thought that it was absolutely clear to everyone that many firms which are being pressed very hard by increasing wages are being forced to stand off workers. There is absolutely no doubt about this, and both employers and the T.U.C. recognise it.

§ Mr. Hordern
Does my right hon. Friend agree that the best description of the Labour Government's policy for controlling inflation was given by the right hon. Member for Coventry, East (Mr. Crossman), when he said that their policy was to allow wages to let rip before prices rose? Will my right hon. Friend consider giving the right hon. Gentleman some recognition for having not only the largest mouth but the largest foot in the whole business?

§ The Prime Minister
That is not a matter about which I am likely to quarrel, if that is the case. It is true that the right hon. Gentleman made that point very clearly in a broadcast on Radio 4, in which he said that the General Election of 1966 was won by the Labour Party by choosing the moment of wage inflation before prices had caught up. He went on. Obviously, we were seeking to do it again in this Election in 1970. What annoys the right hon. and hon. Members opposite so much is that they failed.

§ Mr. Harold Wilson
Since the right hon. Gentleman rushed to use the quotation yesterday, and since his memory seems to be as bad as that of my right hon. Friend, will the Prime Minister explain—if he accepts this, as he did last night—why prices rose in the year after the March, 1966, election less than in the year up to that election?

§ The Prime Minister
If the right hon. Gentleman is questioning the words which his right hon. Friend used—[HON. MEMBERS "Answer."] I am dealing with the first part of the question. If the right hon. Gentleman is asking me not to accept his right hon. Friend's word, I must say that I have confidence in what his right hon. Friend says; he has so often been proved right in the past. If the right hon. Gentleman is asking me to choose between his own words and those of his right hon. Friend, he must not embarrass me. I am perfectly prepared to examine the figures the right hon. Gentleman has given.

§ Mr. Harold Wilson
I did not ask the right hon. Gentleman to question my right hon Friend. I asked him how he explains, in view of his speech last night, the fact that prices rose less immediately after that election than before it.

§ The Prime Minister
I have told the right hon. Gentleman that I am perfectly prepared to examine the figures he alleges.