HC Deb 09 March 1971 vol 813 cc233-4
19. Mr. Kaufman

asked the Chancellor of the Exchequer what is the purchasing power of the £ sterling now, taking it as 100p on 18th June, 1970.

Mr. Patrick Jenkin

Taking the value of the £ sterling as 100p in mid-June 1970, its purchasing power in mid-January 1971, the latest date for which information is available, is estimated at 95p. This comparison is based on the movement in the General Index of Retail Prices.

Mr. Kaufman

Does the hon. Gentleman recall the tastefully-arranged basket of groceries on display in Conservative Central Office during the election campaign? Can he say by how much the cost of that basket of groceries has gone up as a result of the 8 per cent. annual rate of decline in the value of the £ since his party became responsible for the rise in inflation?

Mr. Jenkin

I am sometimes led to wonder what would have happened to the price of the basket of groceries if the Labour Party had been returned at the election.

Mrs. Knight

Can my hon. Friend tell us how many price increases were in the pipeline long before 18th June?

Mr. Jenkin

Obviously, a major part of the price increases that have taken place, certainly in the public sector, are directly the result of the runaway wage-cost inflation which was in existence before the election.

Mr. Cant

On a non-political and severely technical point, may I ask whether the hon. Gentleman shares the concern of the Economics Editor of the Financial Times at the growing gap between the consumer price index and the index of retail prices, which he suggests now underrates the level of inflation?

Mr. Jenkin

I noticed the comment in the Financial Times to that effect. This is primarily a matter for my right hon. Friend the Secretary of State for Employment, who watches over these indices. I will draw to his attention what the hon. Gentleman said.