HC Deb 11 May 1995 vol 259 cc879-80
11. Mr. Fabricant

To ask the Chancellor of the Exchequer what are his estimates for the retail prices index one month, six months and one year hence; and if he will make a statement. [22236]

Mr. Heathcoat-Amory

The November Financial Statement and Budget Report forecast that underlying inflation would be 2½ per cent. both in the fourth quarter of 1995 and in the second quarter of 1996.

Mr. Fabricant

Whatever the absolute rate of inflation, does my hon. Friend agree that the relative inflation rate—that is, our rate of inflation against those of competing nations—is of equal importance? Does my hon. Friend further agree that it is the relative rate of inflation which defines our competitiveness and our ability to create jobs? That being so, what was the relative rate of inflation under the Labour Government when the average rate was 15.9 per cent., and what in my hon. Friend's estimation would be our current rate of inflation if we had committed £13 billion more public expenditure this year, as the Labour party had promised in 1992?

Mr. Heathcoat-Amory

My hon. Friend is absolutely right. The underlying inflation rate of 2.6 per cent. for the year to April is lower than the comparable average for the EC as a whole. Between 1974 and 1979, the Labour party's inflation record was not only disastrous at home but extremely poor by international standards. All the clause IV waffle that we hear is less eloquent than the fact that Labour cannot be trusted on inflation. The real lesson that the British people have learnt is never to give it another opportunity.