HC Deb 20 December 1976 vol 923 cc21-2
20. Mr. MacGregor

asked the Secretary of State for Prices and Consumer Protection whether he now has a firm date for the target for reaching single-figure inflation; and if he will make a statement.

Mr. Hattersley

I cannot add to what my right hon. Friend the Chancellor of the Exchequer said in reply to the hon. Member for Romford (Mr. Neubert) and my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) on 16th December, when he made it clear that, given the continuing moderation in the increase in wage costs, the rate of price inflation should start falling again next summer.

Mr. MacGregor

Does the right hon. Gentleman admit that that answer shows the massive failure of earlier Government policies to achieve their objectives? Is he also aware that an earlier answer he gave about prices hovering around 15 per cent. and then coming down next year below the level of this year contradicts what the Chancellor said in last week's statement, when he said that the RPI would rise above 15 per cent. next year before it came down to that level at the end of the year? Bearing in mind past errors, can the right hon. Gentleman say whether his forecasts now take into account the probable increase in VAT in April, having regard to the Chancellor's declared objective of getting direct taxation down without any increases in expenditure?

Mr. Speaker

Order. My remarks earlier about long answers apply also to long questions.

Mr. Hattersley

I do not think that there is any inconsistency in what the Chancellor and I said. "Hovering" means hovering up occasionally as well as hovering down. Of course, no one has ever tried to deny that the progress of our economic policy has had some difficulties.

Mr. Gow

That will be in "Quotes of the Week" in the Observer.

Mr. Hattersley

We are doing things now which are painful but necessary. The hon. Gentleman will understand that, whatever the Chancellor has decided for the Budget of next April, he has not told me, and even if he had I would not tell the House.

Mrs. Sally Oppenheim

May I congratulate the Secretary of State on his command of the euphemism? May I ask him to confirm or deny that, on the basis of the Chancellor's latest figures, prices will have risen by the end of 1977, since the Government came into power, by 86 per cent., of which 30 per cent. is due to the slippages in forecasts that have taken place since the Government embarked upon their attack on inflation? Is it not correct to say that this will cost the average family an extra £16 a year by the end of next year? If the right hon. Gentleman cannot confirm this, will he give the alternative figures?

Mr. Hattersley

The hon. Lady told the anxious world through the Daily Mail this morning what question she was to ask this afternoon. I had my Department look at it. It thought that it was unwise to make such arithmetical progressions, but as regards whether there was any wisdom in such a method it tells me that the hon. Lady was arithmetically wrong. As for her second question, I do not think prices can have gone up because of slippages in forecasts. Slippages in forecasts do not change anything. They are simply what is written on a piece of paper.