Cost-of-Living Subsidies.

Part of Financial Statement – in the House of Commons on 25th April 1944.

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These figures of increases are, in themselves, moderate. They contrast with the gloomy forebodings widely entertained in the first year of the war, when it was almost taken for granted that prices would go on soaring indefinitely, as they did in the last war, and that the money in our pockets would become worth less and less as time went on. I do not think, however, that anyone will deny that the benefits that we have gained hitherto from the stabilisation policy far outweigh its cost. Nevertheless, as I have said, I am disturbed at the trend of these figures. The maintenance of the stabilisation policy is as necessary and as beneficial as when it was first introduced, and the general principles underlying it are as sound as they were. But I am afraid we can no longer regard a cost of living figure of 25 per cent. to 30 per cent. above pre-war as sacrosanct, for the conditions laid down by my predecessor as necessary to the maintenance of this particular figure are now being imperfectly fulfilled. May I remind the Committee what Sir Kingsley said when he announced the stabilisation policy? He said: I put this forward as a most important development of policy, and I hope we may thus create conditions which will enable the wages situation to be held about where it now is. It is clear that persistence of the tendency towards rising wage rates, which necessarily increase costs of production at every stage of the productive process, would compel abandonment of the stabilisation policy."—[OFFICIAL REPORT, 7th April, 1941; col. 1322, Vol. 370.]