Inflation

HC Deb 24 November 1983 vol 49 cc450-1

15. Mr. Andrew MacKay

asked the Chancellor of the Exchequer if he will make a statement on the level of inflation.

16. Mr. Wallace

asked the Chancellor of the Exchequer what the percentage rate of inflation has been over the last 12 months.

Mr. Lawson

In the 12 months to October 1983, the retail prices index increased by 5 per cent.

Mr. MacKay

Does my right hon. Friend agree that the best way to protect the interests of pensioners and other vulnerable groups is for the Government to continue vigorously to bring about measures that fight inflation? Does he agree, however, that that process has been harmed by the irresponsible action of the unions at Ford in turning down the generous pay offer of 7.5 per cent.?

Mr. Lawson

I suspect that the activities of the workers at Ford are capable in the long run, and maybe in the shorter run too, of damaging only themselves and their families. The Government are determined to continue to keep inflation low, and going down, by the fiscal and monetary policies that they pursue. As my hon. Friend says, that is the best possible social service that we can render to the old-age pensioner.

Mr. Wallace

Does the Chancellor recognise that the rate of inflation that he has just announced is 1.3 per cent. higher than the rate by which retirement pensions were increased this week? How much would it have cost the Exchequer to do the decent thing and maintain the real value of pensions?

Mr. Lawson

We have made it absolutely clear that we shall increase pensions each year by the amount of the rise in the retail prices index over the year to the preceding May. That is a far better system than trying to give pensioners an increase based on a forecast, which invariably will be wrong.

Mr. Hickmet

Inasmuch as inflation is dependent on the control of public expenditure, is my right hon. Friend satisfied with the co-operation that he has had from his Cabinet colleagues in the major spending Departments? Does he agree that it is time there was a public debate on the matter, rather than the Chief Secretary trying to persuade his colleagues to achieve the necessary savings?

Mr. Lawson

My right hon. and learned Friend the Chief Secretary has done an excellent job and is absolutely indispensable. Nevertheless, I am sure that it is helpful, in addition to his efforts, for there to be the widest possible public debate on these matters.