Cost of Living (Hansard, 27 October 1975)

§ 5. Mr. Jessel
asked the Secretary of State for Prices and Consumer Protection what is the percentage increase in the cost of living over the last 12 months.

§ 10. Mr. Adley
asked the Secretary of State for Prices and Consumer Protection what has been the increase in the retail price index over the past 12 months.

§ The Secretary of State for Prices and Consumer Protection (Mrs. Shirley Williams)
The retail prices index for September was 26.6 per cent. higher than a year earlier. This represents a small decrease on the corresponding year-on-year figures for August and marks the first year-on-year decline for 12 months.

§ Mr. Jessel
Why have the Government allowed the rate of increase in the cost of living to triple in the 12 months since October 1974, when the Chancellor of the Exchequer announced that the rate of increase in the cost of living was 8 per cent.?

§ Mrs. Shirley Williams
The hon. Gentleman should recall that his Question is about year-on-year rates, and he is now quoting three-monthly rates. It does no good to the House to compare these two different rates, as he will discover in the course of exchanges on later Questions.

§ Mr. Tomlinson
Does my right hon. Friend recall that hon. Members opposite seemed to be remarkably concerned about quarterly figures until recently? Can she explain to the House why there has been this apparent conversion from asking for quarterly rates to asking for yearly figures?

§ Mrs. Shirley Williams
My hon. Friend has put his finger on the point. The three-monthly trend reads as follows: in July, at an annual rate it was 32.6 per cent., and the Opposition were very interested; in August, it was 15.2 per cent. and the Opposition had no opportunity to ask Questions; in September, it was 10.4 per cent. and the Opposition have not asked any Questions.

§ Mr. Adley
Does the right hon. Lady realise that, no matter how much she tries to wriggle, fiddle and twist, the fact of the matter is that the Chancellor of the Exchequer, at the last General Election, one year ago, deliberately told the country that the rate of inflation was 8.4 per cent.? As the majority of the people are not quite so clever as she is or as her right hon. Friend is at twisting and deceiving in this way—

§ Mr. Speaker
Order. The hon. Member must not accuse another right hon. or hon. Member of deceiving.

§ Mr. Adley
I withdraw that statement, Mr. Speaker—misleading the country by a terminological inexactitude which sought to give people the impression that the Government had inflation under control, to what does she ascribe the fact that inflation has exploded so much? Is it too much or too little Socialism?

§ Mrs. Shirley Williams
The hon. Gentleman does the profession of politics no good by continually switching from year-on-year rates to three-monthly rates. The House should decide which it wants and stick to them. Constant changes of comparison to suit Opposition advantage do not help in the battle against inflation.
The Government have made no bones about the fact that increased costs, including those of raw materials, labour and interest, were behind the level of inflation. It is well known that the Government have embarked upon a counter-inflation policy which is operating across the board. It is high time the Opposition gave us full support for it.

§ Mrs. Sally Oppenheim
In order that the facts should be put as simply as possible and in view of the conflicting forecasts about the rate of inflation which have emanated from a number of Ministers, will the right hon. Lady tell us whether we should accept the Chancellor's forecast that the rate of inflation will be between 12 per cent. and 16 per cent. by the end of this year, or the Government's own target of 10 per cent. by the end of next year, or the Foreign Secretary's forecast of about 12 per cent. by the end of next year? Would the right hon. Lady like to add her own forecast in reply?

§ Mrs. Shirley Williams
When the last administration left office they were basing their own forecasts for inflation on a probable very rapid decline in commodity levels. In the event, that was proved wrong. I therefore think it wiser to say that we are at present directly on target for the Government's own forecast of increase in the Index of Retail Prices by the end of next year. Clearly, it would be most unwise to say that that forecast is firm, in view of what may occur in the world outside. The hon. Lady will recall that only recently, as a result of OPEC bargaining, there was an increase in oil prices—the sort of increase which none of us can ever foresee months ahead and which we would be unwise to try to foresee.