HC Deb 04 May 1989 vol 152 cc355-6
17. Mr. Gow

To ask the Chancellor of the Exchequer when he expects to achieve his target of zero inflation.

Mr. Lilley

The Government's ultimate objective remains price stability. The medium term financial strategy assumes that the annual rate of inflation in the GDP deflator will be down to 2½ per cent. by 1992–93, consistent with its objectives for money GDP.

Mr. Gow

Could my hon. Friend accelerate the meaning of the word "ultimate"? Will he please ensure that the policy of the Treasury is to bring about that policy which is attainable—zero inflation and no rises in prices?

Mr. Lilley

I agree with my hon. Friend both as to the destination and as to the route, but I cannot give him a different timetable.

Mr. Barron

Have the past 10 years been worth it for a reduction of 2 per cent.?

Mr. Lilley

It has been immensely worthwhile to get rid of a rate of inflation that averaged 15 per cent. under the last Labour Government and which has reached 5 per cent. since 1983.