£ Sterling (Purchasing Power)

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 25th January 1972.

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Photo of Gerald Kaufman Gerald Kaufman , Manchester Ardwick 12:00 am, 25th January 1972

asked the Chancellor of the Exchequer what is the purchasing power of the £ sterling now, taking it as 100p in June, 1970.

Photo of Mr William Price Mr William Price , Rugby

asked the Chancellor of the Exchequer by what percentage the £ sterling has declined in value since 18th June, 1970.

Photo of Mr John Golding Mr John Golding , Newcastle-under-Lyme

asked the Chancellor of the Exchequer what is the value of the £ today compared with 18th June 1970.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

Taking the value of the £ sterling as 100p in mid-June, 1970, its purchasing power in mid-December, 1971, based on the movement in the General Index of Retail Prices, is estimated at 88½p, that is a fall in 18 months of 11½p. Of this figure, the first 12 months to mid-June, 1971 accounted for 9½p; the last six months, have accounted for only 2p.

Photo of Gerald Kaufman Gerald Kaufman , Manchester Ardwick

In acknowledging the complacent eyewash with which the hon. Gentleman ended that reply, may I ask whether he is aware that savings valued at £800 when the Conservative Government took office are now worth only £708? In view of the figure of one million unemployed, accompanying this appalling inflation, will the hon. Gentleman now accept responsibility for this indictment of Tory incompetence and deceit?

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

In view of the hon. Member's concern about the savings position, I trust that he will join hon. Members on this side of the House in resisting unjustifiable pay claims and strikes which can lead only to an acceleration in the rate of inflation.

Photo of Mr John Golding Mr John Golding , Newcastle-under-Lyme

Is the hon. Gentleman aware that the figures he has given relate to mid-December and that we are now in late January? Is he further aware that this deterioration in a worker's standard of life, when taken together with the high rents policy, inevitably will lead to increased wage demands by workers who want only to stand still in living standards?

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

It simply is not true that real incomes have been falling in the last 18 months. Real personal disposable income rose by 3 per cent. between the second quarter of 1970 and the third quarter of 1971, which is the latest period for which figures are available.