I have heard Treasury Ministers before presenting the technical complexity of Budgets with skill and courtesy, and I accord to the Chief Secretary the tribute that one would accord to a man who is capable of doing that. But if he believes that in his exchange with my right hon. Friend the Member for Leeds, East (Mr. Healey) about the effect of reunification on the distribution of tax in this country he is capable of influencing the British public at large, particularly in his latter remark which he made about industrial disruption, he really cannot understand the nature of the problem which is now facing the country.
I recommend to my right hon. and hon. Friends that tonight we should vote against Budget Resolution No. 14 which deals specifically with the reunification scheme. The reason for that is that we believe that the dominant social effect of this change will be divisive in an extremely difficult situation which the Chief Secretary shows no signs of understanding. It will work against the declared objective of a voluntary policy to deal with inflation; it will work against the interests of working people; it explains a great deal of the present unrest that has overhung the week of the Budget debate; and it will, therefore, harm the broader prospects, both economic and political, for the future of this country.
Therefore, I address myself principally to the broad social and political effects of the Budget changes. May I say one word first on the problems of the economic management to which the Chief Secretary made a passing reference. Nobody listening to the Budget Statement last Tuesday for one moment thought that the Budget Statement would be the last judgment made this year. With a very rapidly changing international monetary situation, with solutions lasting, sometimes, for only a fortnight, and with an extremely difficult domestic situation, the Chancellor was able to reach only a preliminary view. It is quite clear that price inflation will continue. The balance of payments is likely to deteriorate sharply. Investment prospects are still based on hopes which have been raised in the past and were not realised, and even if the growth rate can be sustained against all these problems, the level of unemployment is unlikely to fall to an acceptable level.
I want to come to the effect of these policies on the centrepiece of Government policy, which is not the Budget but the Counter-Inflation Bill. The Chief Secretary, particularly in his concluding remarks, made it absolutely clear, as did the Chancellor in his broadcast after the Budget, that so far as he is concerned the counter-inflation policy backed by statutory powers represents the main instrument of economic management in his mind this year. Even the statutory policy requires a degree of public consent and support, and the economic factors which we are discussing in this debate matter primarily because of the effect that they will have on public attitudes towards the policies contained in the Counter-Inflation Bill.
I want therefore to look at some of the factors, including reunification, and the effect of this on the distribution of incomes, in terms of the likely effect on public attitudes. I take, for example, the rise in prices that has occurred, continuing even during the freeze. I quoted some figures last Monday. My right hon. Friend the Member for Leeds, East quoted some figures on Wednesday, and the consolidated figures since June 1970 are worth putting on the record: all foods 29·1 per cent. up; processed foods 17·8 per cent. up; fresh foods 43·5 per cent. up; meat 45·6 per cent. up, and fruit 92·4 per cent. up.
The effect of rising prices on the wives of trade unionists now faced by the counter-inflation policy controls represents one of the major forces behind the wage claims which are now coming through in industry. If we take the increases in rents due under the Government's Housing and Finance Act, these are increases in prices working through under Government direction. If we take rates, and if we accept the Sunday Times estimate, despite the measures announced by the Chancellor, many people will be paying from 40 to 75 per cent. higher rates this year; if we take mortgage payments and the possible effect of an increase in building loans to 9½ per cent.; if we take VAT and contrast it against the remissions planned by the Chancellor two years ago and confirmed yesterday, we get some idea of the pattern of the conflict which lies behind the present industrial unrest.