Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 12:00 am on 9 May 1966.

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Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury 12:00, 9 May 1966

I do not propose to comment on the remarks of the hon. Member for Ealing, North (Mr. Molloy) about aspects of the Selective Employment Tax. He amused me by speaking attractively about the tax and nominally supporting it and then picking every hole in it which he could find. I am sad only that he lacked the political courage to draw the correct conclusion that not only should the tax be amended in the many, many ways which he suggested, but be extended to many people now outside its scope.

I want to speak about inflation. I ask the Government whether they intend and wish to stop or at least limit inflation; whether they are unable to stop it, or do not wish to do so. The record is depressing. The rate of inflation in the first Socialist Government after the war was twice what it was in the 13 golden years of Tory rule. The moment the Socialists were back in again, it bumped up again to 5 per cent. a year, two or three times the rate which we had during the 13 golden years.

Who benefits from inflation? In a situation such as that of last year, when wages rose by 9 per cent. and costs by 5 per cent., it is clearly the wage earner. He gets 9 per cent. more in wages, although he has to spend 5 per cent. more in increased costs. It was he who voted for the Labour Party opposite in such overwhelming numbers. I do not believe that his wife voted Socialist in nearly such large numbers, because, although the husbands got 9 per cent. more earnings, the wives had to pay the 5 per cent. increase in prices, and husbands are not always quite so good at passing on their increases as they might be.