HC Deb 30 January 1978 vol 943 cc16-8
12. Mr. Richard Page

asked the Secretary of State for Prices and Consumer Protection what was the cumulative increase in prices between February 1974 and the latest date in West Germany, the United States of America, Japan, France and the United Kingdom.

Mr. Maclennan

The cumulative increases in prices between February 1974 and November 1977—the latest date for which comparative figures are available—were West Germany 17¾ per cent., United States of America 31 per cent., Japan 41¼ per cent., France 46½ per cent., and the United Kingdom 84¼ per cent.

Mr. Page

Although we welcome the recent drop in price increases, the increases given by the Minister show that the United Kingdom has suffered two to three times the rate of increase of our major competitors, and that is particularly affecting small businesses. Is the hon. Gentleman aware that simply to catch up we must secure half the inflation rate of our major competitors over the next four years? Has the Minister any projections for the rate at the end of this year or next year, or can be in any way give an indication of how the damage can be rectified?

Mr. Maclennan

The hon. Member is right to draw attention to the importance not only of bringing down our rates of inflation to those of our competitors but of maintaining them at those competitive rates. I am sure that he will be glad that in the last six months, on the comparative information available—that is to November—inflation in this country has been below the OECD average. It was 3.1 per cent. in Britain compared with 3.5 per cent. in the OECD as a whole. I think that that shows that we are getting to the sort of target that we must sustain.

Mr. Ioan Evans

What has been the effect on the cumulative increase in this period of the CAP food policy, and do the Government need to alter that policy to secure the sort of prices we need? Does my right hon. Friend realise that, while tea and coffee have risen and fallen in price, Common Market food prices have gone up and up?

Mr. Maclennan

The Government are seeking important changes in the CAP, and it remains a part of our policy to ensure that the common prices of food products which are in structural surplus do not go up substantially.

Mrs. Sally Oppenheim

Is the Minister aware that the figures he gave in his original answer to this Question show that prices have risen in this country during the period in question five times faster than they did in Germany, three times faster than in the United States, and twice as fast as in France and Japan? Since all these countries were subject to the oil price crisis, and since at least some of them were subject to the CAP, is it not clear that the reason for the disparity is that those countries had the good fortune not to have this Government?

Mr. Maclennan

If the hon. Lady reflects upon my original answer, she will realise that it referred to the rate of price increases which were started when her party was in office. They can be largely attributed to three factors. The first was the threshold arrangements which she entered into. The second was the hidden subsidisation of nationalised industry prices, which we have had the considerable problem of phasing out. The third was the Barber printing boom, which almost every Conservative is prepared to acknowledge made a major contribution to the rate of inflation that we have had to reduce.