§ 9. Mr. Kenneth Lewisasked the Chancellor of the Exchequer what the present rate of inflation would be minus the increase in tax on tobacco, drink and petrol in the Budget.
§ Mr. Peter ReesThe Budget measures were estimated to have a direct impact on the retail price index of about 2 per cent., of which approximately 1 per cent. was reflected in the March RPI. But in the longer run, by reducing public borrowing, they should help to bring inflation down.
§ Mr. LewisDoes not my hon. and learned Friend agree that as a certain amount of increase is built into inflation as a direct result of Government policy, the real rate of inflation is much lower than that shown and will be even lower by the end of the year?
§ Mr. ReesMy hon. Friend is right to draw attention to the underlying rate of inflation, which is lower than that which we inherited when we took office.
§ Mr. DykesDoes my hon. and learned Friend agree that, as there is no evidence of any demand-full inflation in the economy, there is ample scope for expanding output without increasing the rate of inflation again?
§ Mr. WoolmerIs it not clear that the Government have pushed up almost every price that they can control? By how much will it be seen that the Government have deliberately pushed up inflation this year when increases in council house rents, gas and electricity prices are reflected in the price index?
§ . Mr. ReesI am sure that the hon. Gentleman would like energy to be priced realistically. Like other hon. Members, he will want proper conservation of our energy resources.