£ Sterling (Purchasing Power) (Hansard, 26 January 1971)

§ 9. Mr. Kaufman
asked the Chancellor of the Exchequer what is the purchasing power of the £ sterling now, taking it as 20s. on 18th June, 1970.

§ The Financial Secretary to the Treasury (Mr. Patrick Jenkin)
Taking the value of the £ sterling as 20s. 0d. in mid-June 1970, its purchasing power in mid-December 1970, the latest date for which information is available, is estimated at about 19s. 4d. This figure is based on the movements in the General Index of Retail Prices.

§ Mr. Kaufman
How can the hon. Gentleman square this decline of more than a penny per month in the purchasing power of the £ since hon. Gentlemen opposite were responsible for the nation's affairs with the Paymaster-General's statement in another place last month that the Government undertook to bring prices down? How do the Government intend to honour the Paymaster-General's undertaking—at a stroke?

§ Mr. Jenkin
As the hon. Gentleman knows, the Government inherited a very rapid wage-cost inflation, and in the six months prior to mid-June the cost of living rose faster than in the six months referred to in my answer.

§ Sir G. Nabarro
Does not my hon. Friend agree that the decline in purchasing power of 8d. in the £ is equal to 3⅓ per cent. over a period of eight months, which is a rate of 5 per cent. per annum, and that is already demonstrated as much below the rate of increase in the 12 months before 18th June, 1970?

§ Mr. Jenkin
I am grateful to my hon. Friend, but I have already indicated that in the six months period before the election the cost of living rose faster than it did in the six months referred to in my Answer.

§ Mr. Frank Allaun
Then how does the Minister explain the deliberate intention of the Government to raise council rents and private landlords' rents?

§ Mr. Jenkin
That seems to me to be a question for my right hon. Friend the Secretary of State for the Environment.

§ Mr. Dykes
Does not my hon. Friend agree that the preoccupation of hon. Gentlemen opposite with the purchasing power of the £ is an astonishing conversion, bearing in mind that in the period of the 1964 Labour Government the value of the £ fell at an unprecedented and record rate?

§ Mr. Jenkin
Hon. and right hon. Gentlemen opposite have changed a great deal of their minds since 18th June.

§ Mr. Taverne
Will the Financial Secretary perhaps answer the question which his right hon. Friend, the Chancellor of the Exchequer did not answer? What do the Government propose to do about the rise in prices and inflation in the 304 private sector, and how can they justify action against wages in the public sector while nothing is done about the Chrysler and similar claims?

§ Mr. Jenkin
My right hon. Friend made it abundantly clear that the private sector is expected to have regard to the national interest in this matter. It would be a gross dereliction of the duty of the Government if they did not act directly in those elements which are within their control.