Consumer Protection and Cost of Living

Part of the debate – in the House of Commons at 12:00 am on 30 November 1970.

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Photo of Mr Neil Marten Mr Neil Marten , Banbury 12:00, 30 November 1970

In that case, Mr. Deputy-Speaker, I will cut short the nice remarks that I had intended to make about previous speakers and get straight on to the Motion, which refers to our "unconcern" about rising prices. I very much object to that. We on this side are only human, like hon. Members opposite, and we are deeply concerned about this matter. I am sure that my right hon. Friends are as concerned as is the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris).

But we should ask ourselves what has caused the rise in prices. Basically, it has been the compulsory Prices and Incomes policy brought in by the previous Administration. That policy was begun by the Declaration of Intent, followed by seven White Papers, three Acts of Parliament, numerous statutory Orders, and over 150 Reports from the Prices and Incomes Board—and at the end of the day, we had the worst inflation for 20 years.

This is something of which we warned the Labour Party when they brought in this legislation—that when they took away the restrictions, all the pent-up wage demands would flow over the dam. That is precisely what we are seeing today and that, more than anything else, has caused the present rise in prices.

How did this happen? The policy was effectively ended in the autumn of 1969, when the election was on the horizon. I believe that the Government of the day let the wages rip in the hope that, by the time the election arrived, more money would be in the pockets of the voters but inflation would not have caught up. Of course, the electorate did not fall for that one.

The second reason was the one which has been discussed in the last week or two—the question of the money supply, which was planned at a certain level and, again, before the election was let rip. I will not go further into that, because there are various arguments about how much and at what point the money supply was expanded. But these two matters, more than any others, have caused the inflation which the Motion criticises.

In 1951, in the last year of the Labour Administration, inflation was 12 per cent., and after two years of Conservative Government, with the bonfire of controls and so on, it was down to 2½ per cent. So that is the sort of time scale in which we have to deal with inflation. This cannot be done in a matter of months, as the Motion imagines; it will take up to two years to get the inflation down to a reasonable level.

I believe that employers and employees must in future take a rational and longterm view of their true interests in demanding and settling wage claims. If they do not, as the Prime Minister has said, they will be confronted with the consequences of their action. I hope that corporations and individuals will exercise their responsibility before either or both kills the goose which lays their golden eggs.

I was very interested to hear what was said about import levies on food by the hon. Member for Durham (Mr. Mark Hughes) who, I am sorry to see, has now departed from the Chamber. He said that our policies would make food prices artificially high, but the fact is that the previous policies, from which we are changing, kept our food prices artificially low. It is important to remember that. With our system of levies, the increase in food prices will be 2 per cent. a year or 2 per cent. overall—I am not sure which—but it will be accompanied by tax reductions. I know that those reductions do not affect everyone, but the less-well-off will be compensated by various allowances.

If we go into the Common Market—and I do not apologise for referring to this aspect, as it is relevant to the Motion—food prices will go up not by 2 per cent. or 4 per cent., but by up to 25 per cent. We are told by the European movement that we would all be getting £7 a week more in our Christmas pay packet if we were now in the Common Market. That is a curious statement. If food abroad is so cheap why do European housewives cross by boat to Folkestone and Dover to do their shopping and still find it cheaper here, even paying the return boat fare, than it is to buy in their own Common Market countries?

I put down a Parliamentary Question to my right hon. Friend the Secretary of State for Employment—not to the Foreign Office, whose Answers on this matter are sometimes rather dubious—asking … what factors he takes into account when calculating real wages in Great Britain in comparison with real wages in foreign countries; and on what basis a fair comparison can be made. The Answer I received was: International comparison of real wages is not practical."—[OFFICIAL REPORT, 19th November, 1970; Vol. 806, c. 468.] Yet still the European movement pumps out this propaganda about our being £7 a week better off if we go into Europe. I hope that all that propaganda will be regarded with the same suspicion as was revealed by that Answer.

I refer to sugar because my right hon. Friend the Minister of Agriculture is with us. If we go into the Common Market the price of sugar will go up from 8d. to ls. Id. a lb. We get it for 8d. a lb. because of the Commonwealth Sugar Agreement, under which we import annually about two million tons of sugar at about £45 a ton. That gives us stability of supplies and prices and gives developing countries stability of income and production.

Sugar is a very sensitive world commodity, and that is why we must take such great care of it in our negotiations with the Common Market. If we are to join the Common Market, satisfactory arrangements about sugar must be made. I say "If we are to join", because I do not believe that we shall; the country does not want it, and I hope that we do not. My information is—and if it is wrong I hope that the Minister will take the opportunity to make a correction—that in the Common Market negotiations we have put in a bid for sugar quotas to remain at their existing level for a number of years.

I understand that there is some talk that during that transitional period Australia may well be phased out of the Commonwealth Sugar Agreement. On the face of it, that may seem a logical and easy matter for a developed country like Australia, but it means dumping 335,000 tons of Commonwealth Sugar Agreement sugar on the world market. That would very much upset the International Sugar Agreement, which took a very long time, with U.N.C.T.A.D.'s help, to create. This phasing out may not seem to be so much an important matter to Australia as to the other sugar-producing countries for whom we have such a great responsibility.

For the reasons I have given I will, should there be a vote, oppose the Motion.