In the last two-monthly and three-monthly periods, the increases were 2·6 per cent. and 3·9 per cent. respectively. The Retail Price Index increased by 47·3 per cent. between February 1974 and February 1976, the latest month for which information is available.
May I congratulate the right hon. Lady on her new appointment as Paymaster-General, which will enable her to personify the link between pay and prices? Does she recall that the Prime Minister spoke last week of the need for Ministers to tell the truth and explain the facts? In the light of the figures she has just given, will she reconsider her view that the rate of inflation is not twice but only somewhat above that of our major competitors?
I trust that I can rely on the Opposition not to give the impression that being Paymaster-General is the same as being "Minister for Pay", for otherwise, I suspect, I shall not last in that job for more than a few days.
The hon. Member for Gloucester (Mrs. Oppenheim) and the hon. Gentleman and I have had a certain amount of discussion about inflation. The broad position is as I have put it. The rate of inflation in this country is not more than twice that of the OECD countries as a whole, but if one picks out two or three leading industrial countries, it is.
In view of the possible fruition of the Government's policy, can my right hon. Friend say whether there will be just as dramatic a fall in prices as there has been a dramatic rise over the past few years?
In the past 12 months there has been a very dramatic fall in the rate of inflation on a six-monthly basis, which is the best way we can take it at present. I have every reason to think that this fall will continue for the next few months, which is as far ahead as I dare predict.
Does not the right hon. Lady agree that within the next month or so we shall be paying 50 per cent. more in the prices in the shops than we were paying when the Government took office? Have any other Government in this country presided over inflation at such a rate?
The hon. Gentleman must be aware that there has been no precedent for a rate of inflation in the whole industrial world like that which has taken place since the rise in oil prices in 1973 and the commodity price boom which went with it. It is not helpful to the country nor to an understanding of our problems to pretend that this situation is unique to the United Kingdom, because it is not.
Is my right hon. Friend aware that her new appointment has given very great pleasure to all of us on this side of the House, who are extremely pleased at the way in which the rate of inflation has been reduced, and that we wish to congratulate her on the part she has played in that reduction?
I thank my hon. and learned Friend, but it would be quite improper if I were not to say that a very great part of what we have been able to achieve in the counter-inflation policy has been due to the people of the country and not just to individual Ministers.
Is the right hon. Lady aware that the Opposition wish to be associated with the warm congratulations offered to her? Is she further aware that in these days of "Women's Lib" we are reassured that she has not announced that she wants to be known as "Pay person-General"? But, however warm and sincere our congratulations on a personal level, they cannot be extended to the right hon. Lady's record on prices over the past two years.
Is the right hon. Lady aware that my hon. Friend the Member for Maldon (Mr. Wakeham) was making it clear that it was not Britain but the Government of whom he was speaking? Is it not disturbing that the rate of increase over the past three months is more than twice the average of our main competitors at a time when wage costs and raw material prices were quite stable? Since there has been a drastic reduction in the value of the pound, is the right hon. Lady still confidently predicting that price rises will have been brought to below 10 per cent. by the end of the year on the normally calculated basis?
I toyed with the idea of being "Paymistress-General" but thought that it might be misunderstood.
I was arguing with the hon. Member for Maldon (Mr. Wakeham) that inflation in Britain, while we have never denied that it has been very acute, has not been uniquely British but part of a world problem in which our figures have been bad—we have never denied that. The Government are confident that there will be a further fall in the rate of inflation over the next few months. I cannot go beyond that because, as the hon. Lady will appreciate, none of us knows what the effect of commodity prices will be on the world upturn. I do not deny, either, that the decline in the value of the pound in recent months will rather slow down the achievement of the target.
The figures corresponding to these periods are 54·8 per cent., 31·0 per cent., 28·0 per cent. and 47·3 per cent. respectively.
The Retail Price Index is a long-established measure of prices of goods bought. It is a matter for my right hon. Friend the Secretary of State for Employment to consider the items in it, but for my part I think that it would be dangerous to do that to which the hon. Gentleman's Front Bench colleagues have drawn attention—fiddle with the RPI.
Is the hon. Gentleman aware that I share his right hon. Friend's view that statistics covering a comparatively short period are not as reliable as those covering longer periods, and that the figures he has just given show that the rate of inflation has risen by the same amount during eight years of Labour Government as during 16 years of Conservative Government? Therefore, prices rise twice as fast under Labour Governments as under Conservative Governments.
The hon. Lady must be aware that since the war Labour Governments have followed Conservative Governments who have left us with legacies, such as the threshold of stage 3, for which her party must bear full responsibility. I agree with her that one should resist the temptation to be involved in captious quiddities about figures.