§ 15. Mr. Skinnerasked the Chancellor of the Exchequer what is the current rate of inflation; and if he will make a statement.
§ Mr. HealeyThe Retail Price Index rose by 23.4 per cent. over the 12 months to January, compared with the December figure of 24.9 per cent. Year-on-year rates of inflation have now fallen for five successive months. This is clear evidence that the deceleration in price inflation has now firmly established itself, and we should see a continuing sharp fall in the next few months.
§ Mr. SkinnerIs it not a fact that this relative fall in the rate of inflation has been created largely by a fall in purchasing power of organised workers—a fall which, according to the latest figures, amounts to 5½ per cent.—and the creation of an army of unemployed? Is 1524 not that in direct conflict with the manifesto on which my right hon. Friend and I fought the last election. Is it not necessary to change the current attempt to regulate the wages of organised trade unions and to get away from the Government's present strategy?
§ Mr. HealeyI cannot follow my hon. Friend's advice. That would mean separating the Labour Government from the great mass of organised trade unions in the General Council of the TUC. I believe that the success of Her Majesty's Government's policy in this as in other fields depends on maintaining the closest possible co-operation between the Government and organised labour. The fall in purchasing power in recent months has not affected the retail price index in any way. The fact is that the lower wage norm established last August will bring down prices very rapidly in the coming year. The fall in prices in the second half of last year reflects the decisions taken in the Budget.
§ Mr. CormackWhen does the Chancellor expect the rate of inflation to be 8.4 per cent.?
§ Mr. HealeyNext year.
§ Mr. HefferHas the Chancellor read the economic review of the TUC for 1976? Is it not clear from that review that the economic strategy of the Government is not welcomed with open arms by the TUC? Is it not time that my right hon. Friend began to take notice of some of the serious economic arguments put forward by the TUC in that review?
§ Mr. HealeyI have read the economic review with great care and I shall be discussing it in the near future with the Economic Committee of the TUC. The review rightly takes credit for the important contribution made by the £6 pay limit to the battle against inflation in the current year, and sets itself a target of getting below a 10 per cent. rate of inflation next year. I hope that I shall have the consistent support of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) in any action taken by the Government and the TUC to achieve that objective.
§ Mr. HealeyNo, Sir. But I agree entirely with the TUC that it is necessary to get the rate of inflation down to well below 10 per cent. by the end of next year. In this respect, according to the OECD, we look like doing better this year than France is doing.
§ Mr. AshleyIs my right hon. Friend aware that the people most affected by inflation are the old, the sick, the disabled, and single-parent families? My right hon. Friend will receive warm support from the Labour Benches for his efforts to beat inflation, but we should greatly appreciate—and I realise that he can say nothing on this matter today—generous concessions for that group of people in his forthcoming Budget.
§ Mr. HealeyI know that my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) is deeply concerned about these matters. I assure him that it is my concern to assist in these respects. I cannot, of course, anticipate the Budget. The TUC deserves great credit in giving priority to those who are not in work—the old, the sick and the children—over those who are in work and in requiring sacrifices from its membership in achieving these results.
§ Mr. NottSince the Prime Minister announced before the October 1974 election that prices were then falling and as ever since prices have been rising, will the Chancellor make a special announcement to the House when he brings down the annual rate of inflation
| The value of the Child Tax Allowances to a standard rate or basic rate taxpayer for the years 1950–51 to 1975–76, were as follows:— | ||||
| Year | All children* | Children not over 11 | Children over 11 but not over 16 | Children over 16 |
| £ | £ | £ | £ | |
| 1950–51 | 27.00 | — | — | — |
| 1951–52 | 32.90 | — | — | — |
| 1952–53 | 39.95 | — | — | — |
| 1953–54 | 38.25 | — | — | — |
| 1954–55 | 38.25 | — | — | — |
| 1955–56 | 42.50 | — | — | — |
| 1956–57 | 42.50 | — | — | — |
| 1957–58 | — | 42.50 | 53.13 | 63.75 |
| 1958–59 | — | 42.50 | 53.13 | 63.75 |
| 1959–60 | — | 38.75 | 48.44 | 58.13 |
| 1960–61 | — | 38.75 | 48.44 | 58.13 |
| 1961–62 | — | 38.75 | 48.44 | 58.13 |
| 1962–63 | — | 38.75 | 48.44 | 58.13 |
| 1963–64 | — | 44.56 | 54.25 | 63.94 |
| 1964–65 | — | 44.56 | 54.25 | 63.94 |
| 1965–66 | — | 47.44 | 57.75 | 68.06 |
| 1966–67 | — | 47.44 | 57.75 | 68.06 |
| 1967–68 | — | 47.44 | 57.75 | 68.06 |
| 1968–69 | — | 47.44 | 57.75 | 68.06 |
§ to what it was when the Government first took office?
§ Mr. HealeyYes, Sir, I shall do so with the greatest pleasure. However, experience has taught me that the Opposition Front Bench will greet such an announcement with chagrin and disappointment rather than as a matter for congratulation.