Orders of the Day — Rising Prices

Part of the debate – in the House of Commons at 12:00 am on 1st May 1968.

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Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn 12:00 am, 1st May 1968

The legislation for the powers I have mentioned will be contained in the Prices and Incomes Bill, which, I hope, will have my hon. Friend's support.

Of the 22 local authorities whose rent increase the Board examined, 17 had increases in train higher than that figure of 7s. 6d.—some dramatically higher. I was delighted to see in the papers the other day that the rent increase of 15s. a week proposed for 3,000 Walsall tenants—and this is one of the authorities whose increases were examined by the Board—may be halved as a result of the recommendations of the Prices and Incomes Board and the Government's announcement of its enforcement plans.

Let us take the situation in the Greater London area. I was rather surprised that the right hon. Gentleman did not refer to that, because the G.L.C.'s proposals were mentioned. The main features of these were that average rents would have increased by about 70 per cent. over the three years up to 1970–71, with average increases at each stage of between 11s. 6d. and 9s. 3d. Individual rents would have gone up by more or less than this, with maximum increases in some cases of over £1 a week. The reason for this, of course, is partly the rising housing costs, but there is also the abolition of the rate fund contribution of £4·2 million which the G.L.C. would otherwise have made in the period up to 1970–71. One of the reasons is the cancellation of that contribution, starting with the cancellation of £1·2 million this year.

In the case of the G.L.C., the Board specifically rejected the Council's case for basing its rents on fair rents in the private sector, and made it clear that it thought that, in the present situation of prices and incomes policy, rate contributions should continue.

On both grounds, therefore, the Board's Report comes down firmly against the G.L.C.'s proposals, and my right hon. Friend the Minister of Housing and Local Government has asked the Council to review the proposed increases. [AN HON. MEMBER: "Who will pay? The ratepayer?"] The House knows that this Government have made a bigger contribution to reducing the rate burden than the Conservatives even talked about.

This is the basis on which we shall prosecute the prices and incomes policy. I repeat that the Conservatives did not avert a rising cost of living when they were in power. They did not avert economic crisis after economic crisis, culminating in the severest crisis of 1964. We on this side of the House are tackling the cause of high prices at its roots, because we are tackling the problem of what is needed to stimulate and develop productivity.

This is the purpose and inspiration of our incomes policy. There is no ground on which we can ask the workers to accept that policy except by the utmost vigilance in the prices field—on rents, retail margins, raw materials and profit margins, all these things on which the surveillance of the Prices and Incomes Board has shown that action can be taken. The Government will take the necessary powers to ensure that action is carried through.