HC Deb 26 January 1971 vol 810 cc292-4
2. Mr. Marten

asked the Chancellor of the Exchequer what is his estimate of the extent of the increase in domestic prices between 1967 and now which is the direct consequence of devaluation.

The Chief Secretary to the Treasury (Mr. Maurice Macmillan)

I estimate that of the increase of 21 per cent. in the retail prices index between the third quarter of 1967, before devaluation, and the last quarter of 1970, between 2 and 3 percentage points was attributable directly to higher import prices caused by devaluation.

Mr. Marten

In that case, would it not be wise of the Chancellor to emphasise this fact so that actions which are tending towards inflation and possibly tending towards ultimate devaluation are opposed by the Government, so that we do not end up in the sort of situation which pertained when we took office?

Mr. Macmillan

It is one of the objectives of the Government's policies to avoid making the mistakes of the past.

Mr. Evelyn King

Is my hon. Friend aware that shop assistants are reported in the last few days to have gained a wage increase in the region of 21 per cent. and that this must have a direct influence on the cost of food, which will exceed any possible counter-influence which might come about as a result of S.E.T.? Has my hon. Friend any comment on that?

Mr. Macmillan

It is widely accepted that one of the main pressures resulting in rising prices is the excessive rate of wage settlements. However, sight unseen, I would not care to comment on any specific settlement. But my hon. Friend's general proposition cannot be doubted.

Mr. Fernyhough

Is the hon. Gentleman aware that, despite this substantial percentage increase, our distributive workers are still amongst the lowest paid?

Mr. Macmillan

I repeat what I said to my hon. Friend. Sight unseen, and without reflection, I would prefer not to comment on any wage settlement. That does not alter the fact that excessive wage demands are a major cause of the present inflationary situation.

Mr. Barnett

Would not it be more honest of the hon. Gentleman to say that he proposes to do nothing whatever about it?

Mr. Macmillan

It would not only be dishonest, it would also be misleading and contrary to the practice of this House to answer questions which are entirely different from that on the Order Paper and which arise from a supplementary question.

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