HC Deb 27 June 1972 vol 839 cc1171-2
8. Mr. Skinner

asked the Chancellor of the Exchequer what, on the basis of the General Index of Retail Prices, is the purchasing power of £ sterling, taking it as 100p on 18th June, 1970.

14. Mr. William Price

asked the Chancellor of the Exchequer by what percentage the value of the £ sterling has decreased since June, 1970.

24. Mr. Kaufman

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

Mr. Higgins

Taking the internal purchasing power of the £ sterling as 100p in mid-June, 1970, its value in mid-May, 1972 is estimated at 87½p. This estimate is based on changes in the Consumer Price Index between 1970 and 1971 adjusted by movements in the General Index of Retail Prices for the months at the beginning and end of the period. If the estimates were based solely on movements in the General Index of Retail Prices, the corresponding figure would be 86p.

Mr. Skinner

It does not matter what one does with figures. They all come out the same. Is not the hon. Gentleman aware that while the Chancellor of the Exchequer has been busy floating the £ on the foreign exchange market, at home the £ is rapidly sinking? Is he aware, further, that if it is right for City speculators to look after their six-and 12-months forward positions on the market, as they have been—causing the floating of the £, some would argue—it must also be right for ordinary wage earners to look after their 12-months forward positions in terms of wage increases? If the right hon. Gentleman is so concerned about old-age pensioners, let him bring forward the pension increase tomorrow.

Mr. Higgins

The crucial point which should be brought out is that the figures do not remain the same, contrary to what the hon. Gentleman suggests. Since June, 1971, the trend is very clear from the figures which have been given in answer to Questions which the hon. Gentleman has put constantly. They are 10.3, 10.1, 10.3, 9.9, 9.4, 9.2, 8.2, 8.1, 7.6, 6.3, and, in May, 6.1. While that is a matter about which we must not be complacent, it shows a trend in the right direction.

Mr. Price

Would the hon. Gentleman care to do the country a favour? Could he go a little further and forecast what the £ is likely to be worth in 12 months?

Mr. Higgins

The House knows that it is not normal to give forecasts of that kind.

Mr. Kaufman

Is the hon. Gentleman aware that the scandalous 14 per cent. cut in the value of the £ took place before last Friday's events? Will he say what additional reduction there will be in the purchasing value of the £ as a result of Barber's backdoor devaluation?

Mr. Higgins

As I say, it is not normal to give forecasts on prices. I have no doubt that in due course we shall consider what will happen in the future, and I have no doubt that the hon. Gentleman will put down a Question on the results, as he has done consistently.

Mr. McCrindle

In view of the fact that, during this period of reduction in the purchasing power of the £, the level of savings has risen substantially, would not it cast some light on our frequent consideration of replies to Questions by hon. Members opposite if both these statistics appeared simultaneously?

Mr. Higgins

My hon. Friend's point is of very great importance. We ought to look at the overall position of the economy. In that respect, the level of savings is of great importance.