HL Deb 10 March 1983 vol 440 cc319-20
Lord Sandys

My 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 was the level of inflation in the public sector during the last period for which figures are available.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne)

My Lords, the prices of goods and services included in the retail price index and produced mainly by nationalised industries increased by 14 per cent. in the year to January 1983.

Lord Sandys

My Lords, while thanking my noble friend for that interesting reply, may I ask him whether he can give a little more information about the question of charges for goods and services within the public sector from the index?

Lord Trefgarne

My Lords, if my noble friend is referring to the charges experienced by nationalised industries with regard to the goods and services which they have to purchase, then that figure I think was about 5.9 per cent.

Lord Glenamara

My Lords, are not these figures entirely misleading? For example, gas prices have gone up by 30 per cent. because the Government decided that they would go up by 30 per cent. Also, the results of the nationalised industries are directly related to the financial targets set by the Government, so are not these figures quite meaningless?

Lord Trefgarne

My Lords, the increases which I have referred to stem to some considerable extent from the effects of price restraints in these industries in past years, and they also reflect some of the pay settlements which have been reached in nationalised industries in recent years as well.

Lord Hughes

My Lords, as a variation on the question asked by my noble friend, may I ask by how much would the first figure given by the Minister have been reduced if the Government had not compelled the gas board to raise its prices by 10 per cent. more than the rate of inflation?

Lord Trefgarne

My Lords, the reasons why we thought that to be necessary have been discussed in your Lordships' House on more than one occasion. If the noble Lord will remember, I said that that was because the price of gas had been kept artificially low for a number of years, and that indeed is still the case.

Lord Hughes

My Lords, that may be very interesting, but it is not an answer in any way to the question which I have asked, which is: To what extent would the figure have been less if the Government had not imposed this additional burden of 10 per cent?

Lord Trefgarne

My Lords, I would have to take some advice on what the effect would have been on the price index. The noble Lord will be aware that the calculation of the retail price index is not a simple, straightforward matter; but I can tell him that gas is weighted to the extent of 22 per cent. in that calculation.

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