§ 11. Mr. Jim Lester
asked the Secretary of State for Prices and Consumer Protection what was the increase in prices over the past three months expressed at an annual rate.
§ Mr. Lester
Is the right hon. Gentleman aware that, far from getting figures wrong and comparing convenient figures, the Chancellor's 8.4 per cent., quoted for the convenience of the Government, was on the same basis? Can the Secretary of State tell me how he reconciles this figure with his confident assertion over the weekend? Does he not understand why many of us feel a scepticism which is shared by the general secretary of NUPE?
§ Mr. Hattersley
I will try to explain to the hon. Gentleman. The three months about which he asked me include April, which is always a month of uncharacteristically high price increases. For example, in the three months including April 1974, which take in six weeks of Conservative Government followed by six weeks of 641 immediate Conservative inheritance, there was an increase of 24.6 per cent., twice as large as the figure I have just given. Hence my assertion earlier today that 11.2 per cent. for the three months including April is a very good figure which confirms my prognosis that prices in this country will remain for the rest of the year at or about their present level.
§ Mr. Gwilym Roberts
Will my right hon. Friend confirm that the great likelihood is that the figure for the three months up to October 1978 will compare very favourably with the much-quoted 8.4 per cent. given by the Chancellor?
§ Mr. Hattersley
It is important not to pick out any specific three-month period. The important thing is the overall trend. I understand why my hon. Friend picks those three months. It is important to ensure that inflation remains at or about its present level from now through October into 1979 so that we can build on this year's achievements next year. That is this Government's strategy. The Government's infation policy is not geared to any one month or date. It is geared to getting the whole inflation cycle broken and beaten down to the level of our industrial competitors.
§ Mr. Whitney
When the Secretary of State defended his prognosis—as he has just called it—yesterday, speaking on Radio 4, one of the elements in this prognosis was that:The exchange rate has been predetermined for the rest of this year.Can the right hon. Gentleman explain which exchange rate, tied to which factor? Was it to the dollar? Was it to the basket of currencies? How will he tie it and predetermine it for the rest of the year?
§ Mr. Hattersley
Even with the benefit of reading, the hon. Gentleman slightly misquoted me. What I said, and what I confirm now, was that the basic ingredients of the inflation pattern for the rest of this year have already been predetermined, partly because there are lags in these matters, which the hon. Gentleman will come to understand. As to the measurement of the exchange rate, conventionally we now measure it against the weighted basket of currencies. Now that the hon. Gentleman has joined us in the House perhaps he will urge his Front Bench to tell us what they believe about 642 the exchange rate and to say whether they share the view of some of their friends in industry that it is too high or whether they share my view, which is that the exchange rate ought to be protected to help the consumer.