§ 5. Mr. Kaufman
asked the Chancellor of the Exchequer what is the purchasing power of the £ sterling now, taking it as l00p on 18th June, 1970.
§ 7. Mr. Carter
asked the Chancellor of the Exchequer what percentage decline of the value of the £ has now taken place since 18th June. 1970.
§ Mr. Patrick Jenkin
Between mid-June, 1970, and mid-May, 1971, the latest date for which information is available, the purchasing power of the £ sterling fell by 8.7 per cent., which is equivalent to a fall from l00p to about 92½p. These comparisons are based on the movement in the General Index of Retail Prices.
§ Mr. Kaufman
In the first place, the hon. Gentleman has given me an erroneous answer: it is 91½, not 92½. Is he aware that since his Government came to power, on a pledge to deal with inflation at a stroke, the value of the pay packet of the man on average earnings has fallen by £2.38 a week? How does he reconcile this fine imposed on the average worker of £131 with the Prime Minister's pre-election promise of a high-wage economy?
§ Mr. Jenkin
I can only say that the average worker taken by the hon. Gentleman in his example has been quite exceptional if he has not enjoyed a fairly substantial wage rise during this period.
§ Mr. Ridsdale
Will my hon. Friend underline that a lot of the price rises are due to decisions taken by the previous Government? Does it not take two years for decisions taken by the Government to come to full effect, and did it not take over two years for the Labour Government to devalue sterling and then run up a short-term debt of £1,500 million?
§ Mr. Jenkin
The right hon. Member for Coventry, East (Mr. Crossman) put it clearly on the record in a broadcast called "The Key to No. 10", when he said:The main fact is that we won the 1966 election by choosing the moment of wage inflation before prices had really been felt to rise, and obviously we were seeking to do if again in this election in 1970".