HC Deb 24 October 1972 vol 843 cc984-6
Q2. Sir Gilbert Longden

asked the Prime Minister if he is satisfied with the progress of his Government's policies to combat inflation.

The Prime Minister

We have substantially reduced the rate of increase of prices since the summer of 1971. What we are now proposing is a voluntary arrangement with the TUC and the CBI on ways of achieving our agreed economic objectives, including moderation in the rate of cost and price inflation.

Sir Gilbert Longden

While the rate of increase in the standard of living and the growth rate in this country have both practically doubled and the rate of inflation has halved since the Government came into office, may I put it to my right hon. Friend that the perfectly true and satisfactory statistical figures do not cut much ice with the housewife who is worried because prices seem to be rising daily? Is my right hon. Friend aware that any action which the Government can take to restore the value of money will have the full backing of the overwhelming majority of the people of this country?

The Prime Minister

I agree with the last part of what my hon. Friend said, but the facts he mentioned in the first part are fully borne out by the statistics. At this moment economic growth in this country is at least 5 per cent., which is far greater than the rate which the Labour Party achieved at any time during its last five years in office.

Mr. Orme

In the talks with the TUC, is not the Prime Minister basing his argument on trying to achieve an incomes policy which for many workers will mean an incomes freeze, and as his argument is central to the Government's philosophy, may I ask him how he has come to change his mind on the issue of incomes? He now wants to negotiate a so-called voluntary policy with the TUC after attacking the TUC and introducing the Industrial Relations Act, the Housing (Finance) Act, and so on. What has changed his mind?

The Prime Minister

The Government have been prepared to consult and negotiate with the TUC from the day they came to office, and the TUC is well aware of that. They have carried out their election undertakings to introduce the Industrial Relations Bill and the "fair rents" Bill, and we have carried both of them to the Statute Book.

Mr. Bruce-Gardyne

Is it not a fact that the substantial taxpayer subsidisation of the wage and salary bills in the nationalised industries is liable to add to the pressures of inflation? If it be true that the Government are contemplating subsidising the price of imported foods and raw materials, will not that tend in the same direction?

The Prime Minister

The point raised in the second part of my hon. Friend's supplementary question is not under discussion other than from the point of view of what has been happening in certain specific arrangements about milk. On the first part, in any policy of price restraint one must weigh the impact of nationalised industry prices rising and themselves creating inflation against the impact of the subsidy which goes to the nationalised industries and its effect on the money supply. This is where the balance must be struck. But there can be no doubt that if the nationalised industries were to increase their prices in order to remove the need for subsidies, the impact on the retail price index would be very great indeed.

Mr. Ashton

Can the Prime Minister explain why, when the Opposition put down Questions like this, he transfers them to the Chancellor of the Exchequer and when hon. Members opposite put down Questions like this he answers them? Is he not guilty of bias, and will he give an undertaking that in the next Session he will accept from the Opposition Questions on inflation like Question No. 03?

The Prime Minister

If the hon. Gentleman likes to give me any example of a Question which he thinks has been wrongly transferred, I will examine it. When he last made such an allegation in the House, I wrote to him showing that he was completely wrong.

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