HC Deb 19 April 1973 vol 855 cc654-6
5. 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 l00p in June 1970.

17. Mr. Parry

asked the Chancellor of the Exchequer what is the purchasing power of the £ sterling to the latest available date, taking it as l00p on 18th June 1970.

Mr. Nott

Taking the internal purchasing power of the £ sterling as l00p in June 1970, its value in February 1973 is estimated to be 81p.

Mr. Kaufman

In the light of the total failure of the price freeze revealed by that disgraceful answer, and yesterday's catastrophic trade figures, so very much worse than the June 1970 figures of which the Minister's right hon. cheat the Chancellor made so much capital in the 1970 election campaign—

Mr. Speaker

Order. I will not have offensive observations like that.

Mr. Kaufman

If you rule me out of order, Mr. Speaker, I obviously withdraw. The right hon. Gentleman himself used that word a few minutes ago, but I withdraw under your direction.

In the light of the facts I have stated, does the Chancellor intend to present his emergency Budget before the Whitsun Recess or before the Summer Recess?

Mr. Nott

That has nothing to do with the hon. Gentleman's original Question. I shall comment on the trade figures in answer to a later Question, if the House wishes, but the hon. Gentleman's comments do not apply to this Question.

Mr. Jay

Is it not now clear that Minister's speeches in the Budget debate this year were so complacent as to be grossly misleading? As the first year of EEC membership has coincided with a record balance of payments deficit, how much longer will the Chancellor sit by and do nothing about it?

Mr. Nott

The right hon. Gentleman knows perfectly well that one month's figures can be thoroughly misleading. The figures in January and February were on the whole satisfactory, and exports in the past three months have been very encouraging. Most of the rise in exports was due to an increase in volume, and much was attributable to exports to the highly competitive markets of Western Europe and North America. The strong rise in imports was to a large extent due to the investment by industry in capital goods and it indicates excellent prospects for growth during this year.

Mr. Healey

But does not the Minister agree that the trade figures make total nonsense of the bouncy complacency the Chancellor showed in a debate in the House only nine days ago, and that the appalling figures are due in large part to a devaluation of nearly 12 per cent., for which the Chancellor was responsible only a few months after inheriting the largest balance of payments surplus in our history?

Mr. Nott

I do not agree with a single word of that. Today's leading article in The Guardian is interesting. It asks the pertinent question: can Britain afford to go on growing if the result is such an alarming trade gap? It answers it by saying: the evidence suggests a favourable answer. We are going for policy of growth, and one month's trade figures can be thoroughly misleading if they are looked at in isolation. The right hon. Gentleman knows that quite well.

Mr. Healey

Does the hon. Gentleman agree that with price inflation already running at 8 per cent., with Government-sponsored increases in rates, rents and mortgage interest, with the impact of VAT on prices, and the feed-through of big increases in imported raw material prices, the Government will have a major inflation on their hands by the autumn just at a time when their only means of maintaining growth in face of the balance of payments situation will be to reduce the parity still further and so increase inflation?

Mr. Noft

The right hon. Gentleman always was a prophet of gloom. I hope he will be in a more optimistic mood about the economy when he returns from the Easter Recess. He always looks on the worst of all possible situations. He always looks for the worst. The figures for February and earlier months show that the standstill has succeeded in largely halting the rise in non-food prices. In fact, prices have risen by only about ½ per cent. since November when the standstill was introduced. Therefore, the Government's prices and incomes policy is being extraordinarily successful.