HC Deb 17 April 1978 vol 948 cc14-9
14. Mr. Arnold

asked the Secretary of State for Prices and Consumer Protection what is the latest monthly figure for the retail price index.

18. Mr. Tim Smith

asked the Secretary of State for Prices and Consumer Protection whether he will give the increase in the retail price index since February 1974.

21. Mr. Molloy

asked the Secretary of State for Prices and Consumer Protection if he will make a statement on the latest retail price index.

25. Mr. Gwilym Roberts

asked the Secretary of State for Prices and Consumer Protection what are the latest figures available for the rate of inflation.

26. Mr. Edwin Wainwright

asked the Secretary of State for Prices and Consumer Protection what is the latest increase in the retail price index.

30. Mr. William Hamilton

asked the Secretary of State for Prices and Consumer Protection what has been the annual rate of inflation based on the statistics of the period November 1977 to March 1978; what was the comparable figure for the period November 1973 to March 1974; and what estimate he has made for the trend to the end of 1978.

Mr. Hattersley

The retail price index rose by 0.6 per cent. in March. This brings the annual rate of increase down to 9.1 per cent. The increase since February 1974 has been 88.6 per cent. Between November 1977 and March 1978 inflation ran at an annual equivalent of 7.4 per cent. Between November 1973 and March 1974 the annual equivalent was 16.3 per cent. The Government's official forecast published in April is for a further improvement in the inflation rate.

Mr. Speaker

I shall call first those hon. Members whose Questions are being answered.

Mr. Arnold

Notwithstanding the reply which he gave earlier to my hon. Friend the Member for Leominster (Mr. Temple-Morris), does the right hon. Gentleman accept that the rate of inflation will increase later this year, and, if so, by what amount?

Mr. Hattersley

I do not. I am always sceptical about a question which begins "Notwithstanding the reply to" another question. My answer is the same as the answer that I gave to the hon. Member for Leominster (Mr. Temple-Morris). We will continue with single-figure inflation this year. We need to build on the 7 per cent. figure and improve it. That is dependent upon having a moderate level of wage settlements next year, and I believe that we will achieve that.

Mr. Smith

Is the Secretary of State aware that the record he has just described to us is far worse than that of our international competitors over the same period? Is he aware that the current rate is also far worse? How can he be so complacent about a 9 per cent. inflation rate, which would have been unthinkable 10 years ago?

Mr. Hattersley

The current rate is not far worse, as the hon. Gentleman described it. We are down to the OECD average. When we achieve the 7 per cent. figure, as we surely shall, we shall be in a situation superior to that of our industrial competitors. But there are two differences between them and us. First, as a trading nation we felt the increase in oil prices particularly badly. Secondly, between 1972 and 1973 we had Government-induced inflation which they did not have to face.

Mr. Molloy

Is my right hon. Friend aware that as the retail price index decreases Tory frustration increases? Long may this go on. But what we are talking about is the battle against inflation—and my right hon. Friend is not making a bad contribution—not so much for any Labour Government out for the future of Britain.

Mr. Skinner

It is the jogging that does it.

Mr. Hattersley

I am grateful to my hon. Friend the Member for Ealing, North (Mr. Molloy). I am sorry that there cannot be a common acceptance in the House that inflation is now under control and will increasingly be reduced to an acceptable figure, because I believe that we shall be able to make all sorts of progress in a variety of economic fields when we can convince the people of the United Kingdom that inflation is under control. It is not in the interests of this country's future economic welfare for people to pretend that inflation might get out of hand again. It will not, and I believe that we should be unanimous in basing our policies on the certainty that inflation is now beaten.

Mr. Roberts

Does my right hon. Friend agree that the one most important figure is the rate at which inflation is falling, and that in terms of that statistic we are doing far better than almost all our industrial competitors? Will my right hon. Friend repeat what he said before, because it needs to be heard not only by the House but by the Press and the country generally, that the statistical forecasts agree that the rate of inflation will fall to around 7 per cent. and remain at that level for the foreseeable future?

Mr. Hattersley

I am very happy to repeat that, but I think that my hon. Friend and I will both agree that, while we shall be in the fortunate position of passing some of our competitors as we go down while they are going up, we nevertheless want to continue to build on last year's success. We need an inflation rate lower than 7 per cent., and the Government are committed to achieving that improved level.

Mr. Wainwright

Will my right hon. Friend continue the good work he has been doing in spite of the carping criticism from the Tory Party? But will he take note that the public are afraid of big business? The milling and bread-making business has now gone into three big firms. [HON. MEMBERS: "Two."] There is a great worry about their power. Will my right hon. Friend also say something about the big brewery companies? The public think that those companies can make an increase in the price of beer when it suits them. But when those companies cannot put 1p on the beer, they put it on the rent of the tenant, and the tenant landlord is now being pushed out of business.

Mr. Hattersley

I think that I had better wait to make my main comment on the price of beer until the Price Commission has produced its report on the brewery it chose to investigate. That report cannot be so long away. However, my hon. Friend is absolutely right, that one of the things bedevilling the brewing industry is the degree of vertical monopoly between the brewers and the public houses they own and control. I do not believe that that control works in the interests of either the landlords or their customers.

With rgard to my hon. Friend's other point about the carping of the Opposition, I hope that we can keep this in perspective. In many ways it is a great help to us. The discovery that we have something right and that they resent it is not a bad piece of publicity.

Mr. Hamilton

Will my right hon. Friend concede that the comparison that I asked for in Question No. 30—of the rate of inflation between November 1977 and March 1978 and the November 1973 to March 1974 inflation—is a very fair one? Will he make sure that the Daily Mail, the Daily Express, The Daily Telegraph and all the other Tory newspapers print these figures in big black letters tomorrow?

Mr. Hattersley

It is almost inconceivable that any of those papers would publish these figures, because of the simple arithmetical fact that during the last year of the Tory Government inflation was running at rather more than twice the rate at which it is running now. That does not seem to me the sort of news the Daily Express or the other newspapers publish.

Mr. Costain

I wonder whether the Secretary of State can put me right on this point. Is not the housewife more interested in the price going up in pence rather than percentages? Are not percentages "phoney", because a single percentage point now—[Interreuption]—Labour Members cannot take it—is equal to double figures back on the old 100 value? As long as prices go up, so long will percentages go down, even if the rise in cost in pence remains the same.

Mr. Hattersley

If when inflation in this country was running at almost 20 per cent. and I was saying that that was a disastrously high figure which should be reduced the hon. Gentleman had said "These percentages do not mean anything", I would take a great deal more notice of him when he criticises percentage comparisons when we have got inflation under control.

Mrs. Sally Oppenheim

Is the Secretary of State aware that claims about conquering inflation from any Government who have presided over an 88 per cent. increase in inflation mean absolutely nothing? Is he further aware—if he is not, he should be—that nearly 200 items that figure regularly in family expenditure have already doubled in price since the Government came to power? That is why the people of this country are not faintly impressed by his claims of overcoming inflation, which they consider to be an insult to their intelligence, particularly as reliable and informed commentators—that is, unlike the Chancellor of the Exchequer—are now forecasting that inflation will rise later this year?

Mr. Hattersley

The hon. Lady continues to misquote other forecasts and other surveys, none of which predicts an inflation course fundamentally different from the one I have suggested. She has no excuse for going on making these errors. I have offered her the services of the statisticians in my Department to explain the surveys to her and she has not accepted that invitation.

Mrs. Oppenheim

Is the right hon. Gentleman aware that his reply would be a great deal more impressive if it were not for the fact that the people who are predicting rising inflation have got more forecasts right than either he or the Chancellor have?

Mr. Madden

Has my right hon. Friend noticed that when prices and immigration are going down the Tories immediately say that we are fiddling the figures? Does he agree that he has achieved a great deal, notwithstanding the burdens placed upon this country and its prices by our membership of the Common Market? Does he also agree that to maintain competition and employment the National Enterprise Board has a role to play, particularly in such areas as bread-making and brewing?

Mr. Hattersley

My hon. Friend tempts me, as did a Conservative Member a moment ago, to answer questions which are outside my sphere, but in his case I shall fall for the temptation. I believe that the National Enterprise Board must have an increasing role, and that that role must be to fulfil some of the functions that private enterprise in this country has signally failed to fulfil during the past 30 years.