§ Lord GainfordMy Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government what the comparisons are in inflation between Britain, the USA, Japan and Western European countries between the years 1979 and 1981.
§ The Secretary of State for Trade (Lord Cockfield)My Lords, the annual average rate of inflation between 1979 and 1981 was 14.9 per cent. in the United Kingdom, 12.5 per cent. in the rest of the European Community, 11.9 per cent. in the United States of America and 6.4 per cent. in Japan. In the 12 months to February of this year, the rate of inflation in the United Kingdom was 11 per cent., and further falls are anticipated.
§ Lord GainfordMy Lords, I thank my noble friend for that Answer, particularly regarding the falls that are expected. Can he give any idea of how Her Majesty's Government plan to bring this about as soon as possible?
§ Lord CockfieldMy Lords, we anticipate that by the end of this year the rate of inflation will be down to 9 per cent., and next year it will be down to 7½ per cent. The Government's fiscal and monetary policies have made an important contribution to this, as indeed have the fall in oil prices and other commodity prices.
§ Lord Davies of LeekMy Lords, can the noble Lord inform me whether he has taken into account the dipping into the contingency funds that will be necessary whatever happens—hoping that peace will be found—to answer the Falklands issue? Is it not a dangerous statement for the noble Lord to say so forthrightly that he thinks that inflation will be down?
§ Lord CockfieldMy Lords, the estimates published at the time of the Budget were as I have indicated. There are always uncertainties in the future. Nevertheless, we would anticipate that the falls that have been forecast will be achieved.
§ Lord Davies of LeekMy Lords, I hope that the noble Lord did not think that I was asking that antagonistically. I was looking for reality in the answer, and I did get it.
§ Lord CockfieldMy Lords, I entirely appreciate the noble Lord's point. Inevitably, events that occur can have an impact on these and other figures. But our 460 hope of course is that they will not result in a significant change in the estimates that I have quoted.
Lord Bruce of DoningtonMy Lords, will the noble Lord accept our felicitations on his elevation to Cabinet rank?
Lord Bruce of DoningtonMy Lords, we hope to have the opportunity of crossing swords with him from time to time, not only on his former subjects but on his new responsibilities. Is the noble Lord aware that we on this side welcome also his forecast in very precise terms as to where he expects the rate of inflation to be at the end of this year and towards the end of next? Is he further aware that we have had these kinds of forecasts before and that, even as we are talking, the inflation rate still remains above that which his Government inherited nearly three years ago? Will the noble Lord, while he is about it, pass some observation on which way he expects the taxes and prices indicator to go? I believe it is an index upon which the Government set great store.
§ Lord CockfieldMy Lords, I am grateful to the noble Lord for his felicitations and I look forward to the challenge which he promises. It is perhaps understandable—although unwise—that he should refer to the record of the previous Government. If he cares to refresh his mind on thesematters, he will find that the average rate of inflation for the five years in which the previous Administration were in office was 15.4 per cent. In the three years that this Government have been in office it is 14.1 per cent.
§ Lord GlenamaraMy Lords, may I associate myself with what my noble friend on the Front Bench said about the noble Lord the Minister, and dissociate myself completely from the unmannerly, discourteous remarks made by one of my colleagues in another place? Has the Minister noticed some figures published this morning showing that the rate of inflation for poor people is very much higher than it is for people with above-average incomes? If the noble Lord has not studied those figures, will he do so and let us know what the Government intend to do about that?
§ Lord CockfieldMy Lords, I am most grateful to the noble Lord for what he says. Regarding the rate of inflation at different income levels, there is a large element of estimation in these figures, but I think it is very important to bear in mind that retirement pensions, for example, are in fact protected against price rises.
§ Lord GlenamaraYes, my Lords, but is the noble Lord aware that this refers to people with an income of below £80 a week? These are not simply retirement pensioners. There are a great many people on low incomes who spend a much bigger share of their income on food, fuel and rent.
§ Lord CockfieldMy Lords, while I am of course very willing to look at the figures quoted by the noble Lord, I would remind him that the increase in the price of food is significantly less than the increase in the retail price index, generally.