HC Deb 17 December 1979 vol 976 cc5-7
6. Mr. John Evans

asked the Secretary of State for Trade what is the present rate of inflation.

13. Mr. R. C. Mitchell

asked the Secretary of State for Trade what are the present three-monthly, six-monthly and yearly increases in the inflation rate.

The Minister for Consumer Affairs (Mrs. Sally Oppenheim)

The retail prices index has increased by 2.9 per cent., 10.1 per cent. and 17.4 per cent. over the last three, six and 12 months, respectively.

Mr. Evans

When does the Minister expect inflation to reach 20 per cent.?

Mrs. Oppenheim

I recall that the right hon. Member for Lanarkshire, North (Mr. Smith) predicted that inflation would reach that level by the end of this year. There is no sign that it has yet done so. It is the Government's overriding priority, through their economic policies, to overcome inflation. We are resolutely tackling the daunting and deep-seated problems that we inherited. The problems will not be overcome in a matter of months, or without recourse to severe remedies, but it is only by resolving the problems that we can hope to restore the long-term price stability yearned for by the people of this country. Our task would be a good deal easier if, instead of carping criticism from the Opposition, we received some constructive support for our policies.

Mr. Mitchell

Does the Minister recall that during the last general election campaign she posed as the housewive's friend, and on several occasions made statements saying that she would reduce the rate of inflation? In view of the utterly disastrous figures that she has announced now, will she forthwith resign and apologise to the British people for misleading them?

Mrs. Oppenheim

I made no specific statement. The only poseur at the last election was the previous Secretary of State for Prices and Consumer Protection, who said that there was no sign that inflation would be taking off again. With respect to the hon. Gentleman, his Government had five years to show what their counter-inflation policies could achieve. What they did achieve was a 110 per cent. increase in prices. The present Government have no intention of repeating policies which produce such disastrous results.

Mr. Marlow

Does my hon. Friend agree that if we were to annualise the past three months' inflation figures they would produce an annual inflation rate of 12.6 per cent.?

Mrs. Oppenheim

My hon. Friend is roughly correct. The high inflation that we are facing today is a direct consequence of five years during which the Labour Government failed to face the economic realities that confronted them, squandered precious time and resources for political gain and, finally, left the country to pick up the huge bills that must now be paid. That is the reality underlying the unacceptably high rates of inflation that will be with us for some time to come.

Mr. John Smith

Is the Minister aware that this country has the highest rate of inflation of any industrialised country? As a result of last month's figures we moved straight to the top of the league. Does the right hon. Lady recognise that over five of the past six months of her Government we have seen, on a six-monthly basis, inflation in double figures, which must lead to 20 per cent. on a 12-month basis, and there are a whole series of charges still in the pipeline, for example, rents, mortgages, and transport charges, still to find their way into the retail price index? Does the right hon. Lady recognise that that is an appalling indictment of a Government who have deliberately increased the rate of inflation by the VAT increases in the last Budget?

Mrs. Oppenheim

What I recognise is that we inherited accelerating inflation, accelerating raw material costs, accelerating pay settlements, an acceleration in the money supply and a deterioration in the balance of payments. Those are the ingredients that have contributed to the present high levels of inflation and will, as the right hon. Gentleman said, take some time to work through. Meanwhile, we are tackling the underlying causes of these ills, and that is the only way to effect a cure. That is what we intend to do.