The annual increases in consumer prices up to July 1976, the latest month for which consumer data are available for all these countries, were 12·9 per cent. in the United Kingdom, 5·4 per cent. in the United States of America, 9·4 per cent. in France, 4·1 per cent. in West Germany and 9·5 per cent. in Japan.
Will the hon. Gentleman explain how on earth his right hon. Friend can maintain that there has been a spectacular improvement in our rate of inflation when the rate of inflation is still miles above that of our main competitors?
It is simply that the rate of inflation last July was running at well over twice the OECD average. We have reduced this rate to about half as much again as the average inflation rate. That is a great improvement for one year but it must be sustained.
Has not this increase in the British rate of inflation as compared with that of other countries been largely due to the profligate increase in the money supply which took place when the Conservatives were in Government, especially during the last two years of the Conservative Government?
It is certainly fair to say that the voices from the Conservative Benches that we now hear were not raised at that time.
Is it not clear that, compared with other countries, the performance of the United Kingdom over the past two years has been absolutely abysmal? Is not the "spectacular" achieve- ment of the Government spectacular only in its ineptitude?
I do not think it helps the country to underrate the considerable achievement which has been made by working people in contributing to bringing down the rate of inflation, as they have done in the past year, by showing considerable restraint in their wage demands. They must be given full credit for offsetting other disadvantageous trends that have taken place, notably increases in the prices of commodities. Frankly, I believe that the hon. Gentleman would do well to recognise the extent of the achievement and seek to support our efforts to build on these foundations.
Has the hon. Gentleman noticed that the average level of inflation over the past year for the countries he has mentioned is half that of this country, despite the fact that those countries have also had to face rises in raw material prices and the drought? Will he confirm that the imminent fresh inflationary outburst that we are about to encounter has been caused mainly not by the drought or increases in raw material prices but by this Government's ruinous policy over the past two and a half years and their failure, even now, to respond to economic reality?
As is not infrequently the case, the hon. Lady is wrong in her facts. The inflation rate which I quoted was 12·9 per cent. as against the average annual inflation rate of 7·9 per cent. in the other OECD countries listed. The picture is a good deal better than it was at the same time in the previous year. The hon. Lady—[interruption]. If the hon. Lady wishes to intervene again, she must catch Mr. Speaker's eye.