Orders of the Day — Cost of Living

Part of the debate – in the House of Commons at 12:00 am on 27th January 1966.

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Photo of Lieut-Colonel Stephen Maydon Lieut-Colonel Stephen Maydon , Wells 12:00 am, 27th January 1966

The hon. Gentleman the Member for Dunbartonshire, East (Mr. Bence) went back a long way in history. Like good old soldiers and good old trade unionists he is very fond of fighting today's battles in the terms of last year's campaigns or, as he did, in the terms of the last century's campaigns. I would agree with only one thing which he said towards the end of his speech, when he wished that the Government would be tough. We have had a lot of talk about prices and incomes and the Prices and Incomes Board. It is time that someone paid a tribute to that body which is doing a very difficult job with consummate skill. I wish that the Government were doing their side of the job with equal skill.

People talk about being tough with the railwaymen, being tough with this claim and that claim. I want to see a Government who have the courage to say, "A plague on all your houses, we are going to be tough with the lot of you." Then we shall start getting somewhere. We need a Government who have the courage to say that it is not a question of a claim but one of no money at all. We shall not get the country out of the mess that it is in today nor begin to see any results until that is done.

When historians come to write the history of this political generation they will note five inevitable consequences of each Labour Government in the United Kingdom. First of all, an international crisis in confidence; secondly, increased taxation; thirdly, and following closely on the heels of this, inflation, and the increased cost of living which follows that, and lastly the reduction in voluntary saving. All of these things are very bad for the economy. The honest stalwarts of the Labour Party in the past admitted this quite openly. I refer to people like John Strachey and Stafford Cripps. They knew that these were inevitable consequences of Labour policies. Within a month of taking office the Prime Minister referred in this House to a new crisis of confidence which had aggravated our economic position and caused the Government to raise the Bank Rate in order to protect sterling. In a year taxes, postage costs, insurance contributions have risen by about £1,000 million.

Now we are all expecting more to come in April. We have a wages-prices spiral and instead of the much-advertised norm of 3½ per cent. we are certainly getting 8 per cent. and some estimates talk of 9 per cent. or 10 per cent. There is every sign of further lack of restraint, and there is also every sign that this much talked of prices dam is going to crack and burst at any moment. Whichever way one likes to look at the Labour Party record this is true. I do not take this present Government's record alone. Let us go back to the end of the last war. In the last five years of the previous Labour Administration the Retail Prices Index rose 38 points, an average of 7·6 points each year. That rise of 38 points was precisely the same as the rise in the first 11 years of the Conservative Government which followed.

The annual rise under the Conservative Government in those 11 years was 3·5 points per annum, less than half the previous rate of rise. If one takes the whole 13 years of Conservative Administration the cost of living went up by 50 points, which was 3·8 points per annum overall, precisely half the rate of rise of the previous Administration. Now, in these first 13 months of Labour Government we have a rise of 5·7 points, a 4·8 per cent. rise in the cost of living in the first 13 months, and this after all of those promises which Labour made at the time of the last election.

Savings are the other side of the coin because if costs and prices go up people have not got so much to save and they cannot invest in National Savings. When one examines National Savings during our Government's Administration they were more than £200 million a year on average. In the first year of the Labour Administration National Savings have gone down by £26 million. This is bound to happen. These are the things which both Stafford Cripps and John Strachey, and other courageous men who believed in the party opposite, put their fingers on. They knew about it, they wrote about it, they spoke about it. In the words of the 1964 Labour Party election manifesto: Labour is ready. Poised to swing its plans into instant operation. Impatient to apply the 'new thinking' that will end the chaos and sterility. I ask hon. Members opposite: what have we got today? Industrial production is stagnant. We are told one thing today and something different the next, as is illustrated by one of the motor manufacturers in his telegram to the Prime Minister about the gas shortage in the Midlands. The position is chaotic. All that I can say is that if the Labour Party was ready, it took a mighty long time to swing these wonderful plans into instant operation, despite what the Prime Minister said at Glasgow on 2nd October, 1964, just before the last election about his dynamic, exciting, challenging plans.

How the Prime Minister likes that word "dynamic". It is rapidly becoming a very over-worked cliché. I prophesy that by the end of this century the writers of the new Oxford Dictionary and the new Fowler's Dictionary of Modern English Usage will insert a little note on "dynamic". They will say something like this: "A modern colloquial meaning; something which does not go off; a damp squib; origin: the Labour Party's manifesto of the 1960s".

It is easy to bandy statistical figures across the House. We have had plenty of them today. But let us consider the matter in human terms and think of what happens to an ordinary family. The national expenditure survey figures for last year showed that in 1964 the weekly expenditure on goods and services for a man, wife and child with a gross income in the £25 to £30 a week bracket was £22 8s. If we apply to that the current rise in the cost of living, that man and his family in 1965 would have been, and probably is today, spending £23 9s. 6d. a week, a rise of £1 1s. 6d.