§ 12. Mr. Dixonasked the Chancellor of the Exchequer what recent trend in cost inflation is indicated by increases notified to him in manufacturers' costs during the past four weeks.
§ Mr. BarberI regret that this recent information is not available, but it is clear that in recent months the main factor driving up manufacturers' costs has been the excessive increases in wages.
§ Mr. DixonSince earlier this year average earnings were about 13 per cent. or 14 per cent. higher than they were 12 months before, and now they appear to be 10 per cent. or 11 per cent. higher than they were 12 months before, does not this demonstrate that my right hon. Friend's policy of de-escalation is beginning to work quite well?
§ Mr. BarberI believe that the policy is working well. The figures quoted by my hon. Friend are, from my recollection, about right. As I have pointed out in the 216 past, it is dangerous to read too much into figures for particular months, and special factors have been operating, such as lower overtime.
§ Mr. MarquandDoes the right hon. Gentleman agree that the figures in his Financial Statement show that if de-escalation worked it would mean that consumer expenditure would rise at a slower rate than forecast, that this would mean that the rate of growth of the economy would be even slower than was forecast, and that this in turn would mean that unemployment would rise even more rapidly than it has already risen?
§ Mr. BarberPresumably, the implication of what the hon. Gentleman is saying is that he believes it would be unfortunate if the rate of increase in earnings were slowed down. Whatever views people may have about our policies, I have met nobody yet who takes that particular view.