HC Deb 14 June 1984 vol 61 cc1053-4
1. Mr. Leigh

asked the Chancellor of the Exchequer if he will give his latest estimate for inflation over the last three months.

The Chancellor of the Exchequer (Mr. Nigel Lawson)

In February, March and April—the last three months for which figures are available—the annual rate of inflation was a shade above 5 per cent.

Mr. Leigh

Does the fact that the average RPI figure for the three months ending April 1984 was 5.2 per cent. higher than in the same period last year, and that the annualised rate of inflation was 8.6 per cent., denote any slackening in the Government's determination to curb the ravages of inflation through control of the money supply and public expenditure growth?

Mr. Lawson

No. Seasonal patterns affect the figures within the year. We are on course for the Budget forecast of 4.5 per cent. inflation by the last quarter of this year.

It is always dangerous to take three months and annualise them, as the Opposition discovered — or perhaps they even knew at the time—with the notorious incident of the 8.4 per cent.

I am glad to reassure my hon. Friend that the Government have the continued battle against inflation at the forefront of their policies, through continued fiscal and monetary discipline. I was especially heartened that that policy was endorsed by all the nations at the recent economic summit in London.

Sir Paul Bryan

Does my right hon. Friend recall the forecast made by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), that inflation would be in double figures by the end of 1983?

Mr. Lawson

I clearly recall that forecast. The right hon. Gentleman was so wrong about that, that that may be the reason why he has been so silent since.

Mr. Skinner

If the right hon. Gentleman is so concerned about the inflationary movement, not only in this country, but throughout the world, why is he a party to the idea of bailing out Argentine and other bankers, especially as Argentina's inflation rate has recently stood at more than 500 per cent? Why does the right hon. Gentleman not look after British industry?

Mr. Lawson

I am looking after the British economy, with the great assistance of British industry, but with rather less assistance from the hon. Gentleman. There is no question of a bailing out operation for Argentina. We hope that the Argentine Government can reach agreement with the International Monetary Fund, on the basis of which that Government will have to take measures to put their house in order. If they do not, they will not qualify for assistance from the IMF.

Mr. Marlow

Can my right hon. Friend confirm that the Government will not put the prospects of future low levels of inflation at risk by, in some way or other, bailing out local authorities in such a way as to enable them to meet any increased cost for teachers' pay arising out of arbitration?

Mr. Lawson

The Government have made clear what can be afforded for teachers' pay. Whatever happens when the issue goes to arbitration, the Government have made plain what can be afforded.