Retail Price Index (Hansard, 12 June 1978)

§ 1. Mr. David Hunt
asked the Secretary of State for Prices and Consumer Protection what has been the monthly increase in the retail price index for the latest available month.

§ 3. Mr. Neubert
asked the Secretary of State for Prices and Consumer Protection what was the increase in prices since February 1974 to the latest available date.

§ 15. Mr. Tebbit
asked the Secretary of State for Prices and Consumer Protection when the monthly increase in the retail price index last exceeded 1.5 per cent.

§ The Secretary of State for Prices and Consumer Protection (Mr. Roy Hattersley)
The retail price index rose by 1.5 per cent. in April: this was the largest increase since April 1977 but the smallest April rise for six years. The increase since February 1974 has been 91.3 per cent.

§ Mr. Hunt
Is the right hon. Gentleman aware that, accepting the last three months' figures, we now show a yearly increase of 11.2 per cent.? Will he accept that what he is doing in making these comments—particularly the comments he made in Birmingham—is exactly what Mr. Alan Fisher has termed "kite-flying before the election"? Will he withdraw some of the comments that he has made and face up to the reality of the continuing increase, 632 particularly in view of the last increase in the mortgage rate?

§ Mr. Hattersley
What I said yesterday and what I am happy to repeat today is that the inflation rate will remain at or about the present figure for the rest of this year and that the inflation rate for 1979 is for the British people to decide when they decide the wage bill for that period. As for the three-monthly annualised figures, there is a Question later on the Order Paper on that subject, to which I look forward, because it is a very good figure.

§ Mr. Neubert
After the Government's appalling record, which has seen prices all but double in four years, and after numerous fraudulent forecasts of better times ahead, how can the Secretary of State deny what all best-informed commentators are telling him, namely, that the inflation trend will be rising again by the end of the year and that it will probably be in double figures in 1979?

§ Mr. Hattersley
I hope that, as this Question Time goes on, the hon. Gentleman will give an example of an inflation forecast that I have made which has turned out to be incorrect. As for other forecasters, I dealt in my speech yesterday in detail with two forecasters—the London Business School and the National Institute. The forecasts of both those institutions are more gloomy than the Government's view, and both are already wrong—indeed, one was wrong before it was published. It prophesied that the lowest point for 1978 would be 8.4 per cent. and we are already down to 7.9 per cent.

§ Mr. Mike Thomas
In my right hon. Friend's view, is there some vested interest in the Conservative Party in some sort of damaging change in the rate of inflation? Are not the figures that he has given entirely reasonable, based ort every reasonable piece of statistical information available? Are the "well-known experts" to whom Tory Members refer in fact in Tory Central Office?

§ Mr. Hattersley
No; the reason that these questions are persistently put, against all the evidence, is very clear. It is not so much that the Opposition believe that the inflaton rate will increase as that they actually hope that it will increase. What they want to do is 633 obtain narrow party advantage from national deterioration. The Government do not propose to allow that to happen.

§ Mr. Adley
Is the right hon. Gentleman aware that, in view of the reply that he has given, we are not required to play for any narrow party advantage? Will he repeat loud and clear what he said—that inflation since this Government came to office has been 91 per cent.? What sort of celebration is he planning when it reaches 100 per cent.?

§ Mr. Hattersley
First of all, I hope that the hon. Gentleman will at least struggle for some statistical objectivity. The trend of increasing inflation began 18 months before this Government came to power. The inflation rate is now much lower than it was when the Conservative Government left office. I refer again to every informed observer who makes it very clear that inflation in this country began with the Barber printing boom of 1973. Our achievement is that we have brought that under control.

§ Mr. Gwilym Roberts
Is there not some statistical evidence that the rate of inflation might even fall before the end of this year and that there are experts who put forward that viewpoint? Will not my right hon. Friend agree that not only we on these Benches but the whole country will be behind him in his efforts to curb inflation and that the only renegades are a few Members on the Conservative Front Bench, who seem still to be following their dubious Gloucester index?

§ Mr. Hattersley
There is a prospect over the next two or three months of some small improvement, but I do not want to go further than I went yesterday. The prospect for this country—the statistical certainty, as I described it then and describe it again today—is of inflation remaining for this year at or about its present figure.

§ Mrs. Sally Oppenheim
Who do the Secretary of State and the Prime Minister think they are kidding when they repeat their fraudulent inflation forecasts? Do they think that the people of this country have forgotten this Government's lies about the rate of inflation before the last election or that the same people will be fooled by this kind of electoral deception again? Will the Secretary of State tell the truth for once and say that 634 the effect of the fall in the pound since last January, of rising raw material prices, of rising interest rates and of rising national insurance contributions are bound to have an effect on inflation by the end of this year and that we shall be back in double-figure inflation by the second half of next year? Does he care to repeat his incredible prediction that inflation will be even lower next year?

§ Mr. Hattersley
I do not think that the people of this country are very impressed by that sort of vulgar stridency. What I believe they understand is the achievement over the past 18 months in bringing inflation down from over 26 per cent. to under 8 per cent. I believe they also know about next year. I made clear yesterday, and my right hon. Friend the Prime Minister repeated the point many times during the previous week, that the inflation rate next year is something for the people to decide. If we have a reasonable wage round, inflation will remain under control. Perhaps the hon. Lady would like to contribute to the education of the people by telling us whether she and her party want a moderate wage round next year or whether they are not interested in that sort of thing.