HC Deb 11 November 1974 vol 881 cc17-9
8. Mr. Rost

asked the Secretary of State for Prices and Consumer Protection what is the current percentage rate of increase in the retail price index.

14. Mrs. Sally Oppenheim

asked the Secretary of State for Prices and Consumer Protection if she will show the increase which has taken place in the cost of living from 1st March 1974 until the latest available date.

Mrs. Shirley Williams

The retail price index rose by 17.1 per cent. during the 12 months up to September 1974. The increase since the figure published in February 1974 has been 9.1 per cent.

Mr. Rost

Is that figure of 17.4 per cent. higher or lower than the 8.4 per cent.?

Mrs. Williams

The hon. Gentleman should be aware of two things, first that he has, perhaps unconsciously, inflated the figure I gave to the House and secondly that my right hon. Friend the Chancellor of the Exchequer was speaking about a three-months' level. The figures were absolutely accurate; the figure was 8.4 per cent. I may add that the right hon. Member for Penrith and The Border (Mr. Whitelaw) stated during the election that a massive number of price applications were waiting for the Price Commission. We now have the report of the commission, which shows that the number of applications and the increases demanded fell from 23 per cent. in the period from December to February to 9½ per cent. in the period from June to August.

Mr. Raphael Tuck

Would I be correct in suggesting to my right hon. Friend that, had it not been for her and, incidentally, her Department, prices would have risen to a far greater extent than they have done in the past few months? Will my right hon. Friend give an indication of what the magnitude of that rise would have been had she not been in office?

Mrs. Williams

We make modest claims in my Department, but our best estimate is that rises of about 2 per cent. to 3 per cent. on the RPI and approximately 6 per cent. to 10 per cent. on the food index would have occurred without the measures that we have taken.

Mrs. Oppenheim

Does the right hon. Lady agree that the significance she attaches to the Price Commission's report is as distorted as the figures given by the Chancellor? Is not the right hon. Lady aware that she has not made the point that three months must elapse before an application is made and that all the factors in the retail price indices are not included in the Price Commission's concept?

Furthermore, is the right hon. Lady aware that the National Federation of Consumer Groups has published a figure showing that inflation in basic grocery prices is running at a rate of 34 per cent., that more than 10,000 separate grocery items have risen in price since the right hon. Lady came to office and that housewives do not need her statistics, the "phoney" figures of the Chancellor or mine, because they know that prices are rising faster than ever before? Is the right hon. Lady further aware that indiscriminate subsidies have only slightly moderated price increases? Will she admit that direct help would have been more effective?

Mrs. Williams

I think the hon. Lady will find that more words do not make up for fewer facts. May I begin by saying that the reason for a three-month freeze is the action taken specifically by the present Government. When the hon. Lady attributes a slower rate of price increase to that action, I shall be happy to take the credit.

Secondly, the survey to which the hon. Lady referred covered less than 20 per cent. of food products. I believe that it is fair to take the Price Commission's figures, which covered the whole range.

Mr. Sedgemore

Can my right hon. Friend give an estimate of the percentage increase in the retail price index over the next 12 months which would follow the total abolition of price control? Will she confirm, too, that the CBI's estimate of 1¾ per cent. belongs not to the realm of economic analysis but to the land of the fairies?

Mrs. Williams

My hon. Friend will be aware that it is my Department's view that the implications of totally removing the Price Code would be considerably greater than some of the statistics advanced. It is not our intention for one moment to do so.

Sir John Rodgers

May I remind the Minister of a remark by Winston Churchill about a former Labour Prime Minister, since the right hon. Lady has said how modest she and her Department are? Churchill described Mr. Attlee as "a very modest decent little man with a great deal to be modest about".

Mr. Skinner

Will my right hon. Friend answer this question? In view of the obvious relative success that her Department has had in controlling prices, can she state categorically that that success will be maintained? Without asking my right hon. Friend to anticipate tomorrow's Budget, may I ask whether she is really saying, as she did in answer to my hon. Friend the Member for Luton, West (Mr. Sedgemore), that there will be no relaxation whatsoever?

Mrs. Williams

My hon. Friend will to a great extent have to wait until tomorrow, but the reply that I gave to his hon. Friend and mine was that there was no intention of abolishing the Price Code. For any further information, my hon. Friends must wait for tomorrow's Budget Statement.