HC Deb 15 November 1976 vol 919 cc912-4
10. Mr. David Price

asked the Secretary of State for Prices and Consumer Protection by how much prices have increased in the United Kingdom since February 1974; and what have been the average rates of increase in OECD countries since that date.

Mr. Maclennan

By August 1976, the latest month for which comparable data are available, prices had risen by 55.9 per cent. in the United Kingdom and by an average of 27.8 per cent. in OECD countries.

Mr. Price

May I, in the most kindly supplementary question that I can put, ask the Under-Secretary of State what have been the special factors in the United Kingdom which have led to our having twice the rate of price increases of the average of all our industrial competitors? I cannot put it in a nicer way than that.

Mr. Maclennan

I shall endeavour to answer the question as nicely as I can, in both senses of the word. Part of the trouble stems from the wages free-for-all which took place when threshold payments awarded under stage 3 of the previous Government's pay policy were incorporated in basic rates. [Interruption.] Part of the trouble [Interruption.] The hon. Gentleman is interested in the answer, even if his colleagues below the Gangway are not. Part of the trouble arises from the need to phase out the deficits of the nationalised industries accumulated as a direct consequence of the policies of the Conservative Administration which the hon. Gentleman supported. Part has been due also to the higher food prices as a result of our transition to full EEC agricultural pricing—a policy with which his party is in full agreement.

Mrs. Sally Oppenheim

Will the hon. Gentleman confirm that the difference between ourselves and our main competitors in relation to the annual rate of inflation has been made considerably worse by the fact that the three-monthly rate, annualised, is currently more than twice as high as it was last August? The figure now is 19 per cent. Will he ask his right hon. Friend to tell the House and the country, not just the TUC, when he and the Government will take adequate steps to stablise prices through the correct management of the economy? Is he aware that people are sick to death of the gimmicks that have come from his Department, which have cost a great deal of money and have done little or nothing to restrain prices?

Mr. Maclennan

I hope that it is the common purpose of both sides of the House to acknowledge the steps that have been taken towards achieving this country's necessary targets of inflation which are comparable with those of our major international competitors. The hon. Member for Gloucester (Mrs. Oppenheim) does no service to the country by misrepresenting the position, as she has done this afternoon. The latest comparable figures show that our rate of inflation, at just over 60 per cent. above the average rate in the OECD, is high, and unacceptable. But it is a distinct improvement on the position six months earlier, when our inflation rate was 135 per cent. above the OECD average. We have achieved a marked improvement. We must ensure that that trend continues.

Mr. Heffer

Why do the Government, and, for that matter, the Opposition Front Bench, refuse to accept that one of the basic reasons for the increase in food costs has been our entry into the Common Market, and the common agricultural policy?

Mr. Maclennan

My hon. Friend may not have heard what I said on that point. I draw his attention to the value of the MCAs, which are helping to cushion this country against increases in food prices and which my right hon. Friend made clear will persist.