HC Deb 14 December 1971 vol 828 cc244-5
16. Mr. William Price

asked the Chancellor of the Exchequer by how much, in percentage terms the £ sterling has declined in value during 1971.

Mr. Higgins

Between mid-December, 1970 and mid-October, 1971, the latest date for which information is available, the purchasing power of the £ sterling is estimated to have fallen by 7.3 per cent.

This comparison is based on the movement in the General Index of Retail Prices.

Mr. Price

Why will the Chancellor not admit that he has been caught with his finger in the till? Why does he not go to the people and say quite honestly that at the present rate of progress and as a direct result of Government policy, the £ will soon be worth nothing?

Mr. Higgins

If the present rate of progress continues, the de-escalation will on the whole be welcomed—not that we are complacent about the overall position. Between July and October retail prices rose by about ¾per cent. compared with 1½ per cent. for the same period in the previous year. We are making progress in this battle, but obviously we had a great deal of ground to make up, given the situation we inherited.

Mrs. Sally Oppenheim

Can my hon. Friend say whether he considers the nature of the inflation from which we have suffered over the last few years to have been cyclical or structural or a mixture of both, and if it has been the latter, could he confirm that the flexible and multi-directional efforts that he and his right hon. Friends have made are mast likely to be effective?

Mr. Higgins

The answer to my hon. Friend, whose interest in this subject is, I know, considerable, is that the basic situation was created by the previous Government, but the aproach which we are now adopting—the measures of my right hon. Friend, the C.B.I. initiative and the policy of resisting any inflationary wage claims—is, I believe, beginning to bear fruit, and that is reflected in the figures which I have quoted.

Mr. Robert Hughes

Can the hon. Gentleman tell us when the Treasury will authorise an increase of pensions to old-age pensioners to compensate them for this serious reduction in purchasing power?

Mr. Higgins

I am astonished that the hon. Member is not aware of the increase recently made. This is a matter for my right hon. Friend.