Despite the fact that these three six-monthly periods comprised 25, 26 and 27 weeks respectively, the all-items index, less seasonal foods, which is the best trend indicator, has on an annualised basis steadily declined from 14·1 per cent. to 13·6 per cent. to 13·2 per cent.
Is the Secretary of State aware that, including seasonal foods and drinks, the rate has gone in precisely the opposite direction—from 14 per cent. to between 14·1 per cent. and 14·9 per cent.? Is she not very alarmed at the steep rise in the prices of imported commodities? They averaged 20 per cent. in one month alone in the case, for example, of coffee, cocoa, copper and lead. In her Jekyll and Hyde rôle in the Cabinet, what action is the Secretary of State proposing to defend sterling in the coming months to ensure that imported inflation does not ruin the Chancellor's plans?
On the first part of the question, I am using a period of six months, which is invariably used and which has been used by this Government from the beginning on questions on this subject. Seasonal factors inevitably show a rise in the winter and a fall in the summer and create difficulties in the statistical pattern. I am using the same statistics as I have used throughout on questions on this subject. That is the proper basis for comparison.
On the second part of the question, there is some indication of a hardening of certain commodities, particularly food and metals, quite apart from the effect of any decline in the value of the pound. The effect of the decline in the value of the pound on the Retail Price Index since 1972 when the float began is about 5 per cent. up to the present. This does not take account of certain changes which take longer to show their effect, but the pound inevitably reflects varying inflation rates and it is evident what the Government are trying to do about that.
Does my right hon. Friend agree that the impact of inflation is not consistent throughout the population? Because low income groups and large families have to pay a proportionately larger part of their income for energy, food and rent, they are hit much harder by inflation.
My hon. Friend is correct. That is why the Government have continued with both food subsidies and rent subsidies and have recently increased both during the period of the counter-inflation policy.
Does the Secretary of State agree that the impact falls more heavily on different parts of the country, and that in north and north-east Scotland people are particularly hard hit because of the increase in transport charges? They are not protected by the London weighting allowances as are people here
There is some evidence that the pattern of regional pricing is rather more varied than the hon. Gentleman's question implies. It is not the case generally that Scottish prices are higher than prices throughout the rest of the United Kingdom.
To what extent does the right hon. Lady think that the unprecedented public sector borrowing requirement envisaged this year constitutes a real threat to the Government's anti-inflation policies?
Will my right hon. Friend take this opportunity of agreeing with me—[HON. MEMBERS: "Oh".]—for once—that the forecasts made by the gloom-mongers of the Opposition or the long-haired Cambridge economic forecasters, that inflation will take off again in the long term, are not based on any reputable statistical evidence whatsoever?
I shall endeavour to take every opportunity to agree with my hon. Friend. On this occasion I should like to say that as this is a country that invariably presents the most gloomy view of its own achievements, it is worth mentioning that the cutting of the rate of inflation by more than half in one year is a pretty remarkable achievement in a democracy, even though we still have a long way to go.