The Inflation Rate (Hansard, 24 May 1982)

Baroness Sharpies
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Lord Privy Seal (Baroness Young)
My Lords, inflation is now in single figures—9.4 per cent., compared with a peak of nearly 22 per cent. in May, 1980, and the prospect is for further reductions. We forecast at the time of the Budget that the year-on-year rate of inflation would be down to 9 per cent. by the end of the year and to 7½ per cent. by the second quarter of next year.

Baroness Sharpies
My Lords, I thank my noble friend for that reply. Can she tell us whether it is possible that the rate of unemployment may now be brought down?

§ Baroness Young
My Lords, one of the first objectives of the Government is to bring down the rate of inflation. We think that, following upon that, we shall see an ending of the recession and then a decline in the total numbers of the unemployed.

Lord Bruce of Donington
My Lords, is not the noble Baroness aware that the figures she gave us earlier omitted to say that when Her Majesty's Government took office in May 1979 the figure, year-on-year, was 10.3 per cent.? It is now marginally below that figure. But will the noble Baroness bear in mind that it has been achieved at enormous cost—at the cost of the devastation of our industries and a massive increase in unemployment?

§ Baroness Young
My Lords, I accept that the rate of inflation was 10.3 per cent. when we, as a Government, came to office. But I hope that the noble Lord will be pleased that the average level of inflation will be lower under this Government than it was under our predecessor, which is the first time that this has happened since the war.

§ Lord Boyd-Carpenter
My Lords, was not the 10.3 per cent. quoted by the noble Lord opposite on a rapidly rising trend, whereas the 9.4 per cent. that my noble friend has quoted is on a downward one?

§ Baroness Young
My Lords, my noble friend Lord Boyd-Carpenter is of course absolutely correct.

Lord Paget of Northampton
My Lords, is the noble Baroness aware that to at least 3 million of our fellow citizens the question is whether they have a better or a worse prospect of a job, and the idea that to produce further unemployment at the triumph of reducing inflation a couple of per cent., is an odd sense of priority, certainly to the great mass of the people?

§ Baroness Young
My Lords, we all agree that the level of unemployment is a tragedy and is far too high, but, as the noble Lord, Lord Paget, knows, the underlying trends have shown an increase of unemployment throughout the last Government and this, too, was something which we have inherited. We believe that through our policies we are creating real jobs and that the long-term future of people of this country is better.

§ Baroness Trumpington
My Lords, would my noble friend the Minister not agree that industry, although having had a tough road to hold, is now more streamlined and far more efficient, and that small businesses are on the increase?

§ Baroness Young
My Lords, yes, I agree with my noble friend.

§ Lord Alexander of Potterhill
My Lords, would the Minister agree that the reality is that almost since the last war this nation has paid its workforce more than the workforce was earning and it is time we grew up to that reality and faced the fact that, unless we earn enough to compete with other countries of the world, we shall not survive?

§ Baroness Young
Yes, my Lords, what the noble Lord says is true, and it is important that everyone in this country should understand that we shall create real jobs when people produce goods at the price other people are prepared to pay, at the time that they want them, and of the kind that they want. That is how real jobs could be created, and that is our determination.

Lord Bruce of Donington
My Lords, is the noble Baroness aware that she was misinformed when she told the House just now that unemployment was on a rising trend under the previous Administration? If she will look up the figures she will find that unemployment in the last part of the last Government's term of office was on a firmly downward trend, so much so that it even continued for the first two or three months of the present Administration.

§ Baroness Young
My Lords, if I have misinformed the House on that matter I apologise, and I would certainly withdraw it. The point that I was making is that each time there has been a rise in inflation, so unemployment has increased and the total numbers of unemployed have increased at each stage, and that is 954 why it has been so important to bring down the rate of inflation.

§ Lord Avebury
My Lords, would the noble Baroness agree that the Top Salaries Review Board has consistently made recommendations for increases in salaries which are in excess of the rate of inflation, and that this sets a bad example to moderate wage and salary earners? In view of this, would the noble Baroness consider recommending that the Top Salaries Review Board be discontinued?

§ Baroness Young
My Lords, the Government believe that the increases that were recently awarded as a result of the Top Salaries Review Board's recommendations are fully justified. We believe they were essential to ensure an adequate supply of candidates of sufficient calibre for the Bench, and to provide adequate career structures and differentials for the higher levels of the Civil Service and the armed forces. Furthermore, the TSRB group are the only group whose present salaries are below those recommended for April 1980. It was for these reasons that the awards were given.

Lord Wallace of Coslany
; My Lords, as the noble Lord from the Cross-Benches said that the trouble was that people were getting in wages more than they earned, would the noble Baroness agree that there is at least one great exception and that is the nurses, who are underpaid for what they do and are being exploited at the present time by an inadequate salary increase?

§ Baroness Young
My Lords, the whole House and I am sure everybody else appreciate the great value of the work that the nurses do. I should like to make it clear that extra provision has been made to help finance higher pay increases for the nurses, doctors and dentists, and this has been found partly from other savings on programmes and partly from the contingency reserve.

§ Lord Jacques
My Lords, if the Government's policy has been so successful, why is it that some of the best authorities are forecasting that we shall have 3 million unemployed until 1990?

§ Baroness Young
My Lords, I cannot possibly speak for other authorities, whoever those other authorities may be. I am simply speaking for the Government.

§ Lord Derwent
My Lords, has any forecaster ever been right about anything?