§ 17. Mr. Sainsburyasked the Secretary of State for Prices and Consumer Protection if he will make a statement on the recent report of the Price Commission.
§ Mr. HattersleyI assume that the Question refers to the Price Commission's quarterly report for June-August, published on 26th October.
The Commission reported that the rate of inflation was unlikely to fall from the present level for some months. It noted both favourable and unfavourable factors and referred to the beneficial effect of wage restraint in moderating the rate of price increases.
§ Mr. SainsburyIs the Secretary of State aware that the relative strength of sterling this morning was attributed to the increased expectation that the Prime Minister and his right hon. Friend the Chancellor of the Exchequer were preparing to take effective action to reduce Government expenditure? In the light of his earlier replies explaining the effect that the fall in the value of sterling would have on the consumer, does he agree that he and his colleagues would best help the consumer if they helped the Chancellor of the Exchequer to get on with those long-delayed public expenditure cuts?
§ Mr. HattersleyI have no doubt that a major obligation on me and my Department, in terms of protecting the consumer, is to stabilise sterling. On the last occasion on which I answered Questions, I said five times—I have said it once already today, so I shall repeat it, in order that the hon. Gentleman's prepared supplementary question is properly answered—that there is nothing more important for the consumer than preventing further depreciation in sterling, which affects prices more than anything else. But I say to the hon. Gentleman, as I said to one of his hon. Friends, that to 918 assume that it is automatically achieved by public expenditure cuts is a severe over-simplification of the problem.
§ Sir J. Langford-HoltThe right hon. Gentleman will be aware that he was elected on a manifesto that talked about subsidising basic foods, namely, bread, flour, butter, cheese, milk and tea. Will he tell the House where, in that same document, mention was made that those subsidies would be phased out within a year?
§ Mr. HattersleyWe made it clear from the beginning that the object of the subsidies was to cushion the least well off against the difficulties that they would have to face in 1974 and 1975. The hon. Gentleman will recall, from an answer given by my hon. Friend the Under-Secretary of State, that we have made substantial improvements in the standards of living of the least well off, the unemployed and the pensioners. Indeed, I understand that some of the hon. Gentleman's hon. Friends who complained bitterly about that at the weekend managed to achieve some notoriety on the front page of the Daily Express by saying that the increases were too great. As we have managed to improve the general purchasing power of the unemployed, the sick and the elderly, food subsidies do not have the importance that they had early in 1974.
§ Mr. MartenMay I ask a sensible question on the subject of food prices? I hope that the Minister will be able to answer it. If the parity of the green pound is brought up when the transitional period is over, does he agree that the Common Market will have been responsible for a fairly substantial rise in food prices, including the 20 per cent. which is about to go on to imported lamb at the end of this year? What will the Government do to compensate the poorer sections of the community? The better off can manage the increase, although they do not like it, but it is the poorer sections that suffer most from the Common Market. What will the right hon. Gentleman do about this?
§ Mr. HattersleyIf I may say so, that was a sensible question, but one that includes a hypothesis which I regard as highly unlikely. The common agricultural policy, about which the hon. 919 Gentleman rightly complains, contains a number of artificial elements which I regard as wholly disadvantageous to the consumer—the consumer in the United Kingdom and in the eight other EEC countries. The idea that we might allow the revaluation of the green pound before some other CAP adjustments are made which compensate the consumer is, to put it at its lowest, highly unlikely. Therefore, I do not believe that the hypothesis at the beginning of the hon. Gentleman's question will apply.