Retail Price Index (Hansard, 17 July 1978)

§ 5. Mr. Hodgson
asked the Secretary of State for Prices and Consumer Protection what has been the effect of the Price Commission on the retail price index since 1st August 1977.

§ Mr. Hattersley
The rate of inflation has been reduced by more than 50 per cent. since 1st August 1977 The work of the Price Commission has made a valuable contribution to this notable achievement.

§ Mr. Hodgson
In the light of that answer, does the Secretary of State agree with his previous comments in a newspaper interview that the work of the Price Commission has made only a mar- 6 ginal difference to the rate of inflation? Is not the work of his Department really a public relations exercise?

§ Mr. Hattersley
Not only do I agree with the answer I gave in that newspaper interview, but I agree with the supplementary answer that I gave to a previous question, which was that the way inflation is brought under control is by applying the right sort of economic policies. The Price Commission can have only a marginal effect, but it has a significant effect in that it assures people, which is absolutely right, that unnecessary price increases will not be allowed to go ahead. Sooner or later, the Conservative Opposition will have to make up their mind whether they want to stop the Commission holding back specific prices or whether they do not.

§ Mr. Bryan Davies
Is it not clear from the Opposition's attitude to the Price Commission that they are in favour of some wage increases but of all price increases?

§ Mr. Hattersley
If there is any evidence that the Opposition believe that price increases that have been directly or indirectly prevented by the Price Commission should have been prevented, I have yet to see examples of it. We have never had a Prayer against the Commission's behaviour, but we have also never had a word of support for the action it took over tea, cement and soda ash and in all its other actions that have been of benefit to the country. I say again that sooner or later the Opposition will have to make clear whether they are glad or sorry that those prices were held back.

§ Mr. Giles Shaw
May I refer the right hon. Gentleman to his speech in Barnsley on 24th June, when, as he has just reminded us, he said that the Commission had had a material effect on prices in housewives' weekly shopping baskets—and he quoted tea, soda ash, cement and fertiliser. Does he think that the electors of Penistone were impressed by such an argument? Why does not the kidding stop, and why does he not scrap the whole thing?

§ Mr. Hattersley
As I have had a previous opportunity of pointing out, I thought that the by-election results last 7 Thursday were rather good, particularly since the Shadow Chancellor of the Exchequer and I agreed before the television programme on which we appeared that there was no hope of Labour holding Manchester, Moss Side. Having said that, I believe that the country recognises absolutely the achievements of the Government in reducing the level of inflation to 7.4 per cent. on the RPI. All the evidence is that people understand the work we have done and support us in it.