The average monthly increase in the retail price index since March 1974 has been 1·4 per cent., and between July 1970 and February 1974 it was 0·7 per cent. Up to October 1977 the index increased by 14·1 per cent. over the previous 12 months, by 3·4 per cent., over the previous six months and by 0·4 per cent. over the previous month.
Since the two periods of roughly three and three-quarter years cover the period of the Conservative Government and the Labour Government, does not the right hon. Gentleman agree that the record of the present Government is disgraceful? How does he justify price increases under the Labour Government of almost twice the rate that they were under the Conservative Government when the Reuter commodity price index rose by 157 per cent. when the Conservatives were in office and by only 4 per cent. since the present Government came to power?
It was clear from the Order Paper, even before we heard that supplementary question, that the new tactic is to compare the two price increase periods and imply that inflation began only on the day of the 1974 General Election. Unfortunately for the Opposition, the facts do not support that case. Let me give the Opposition one simple statistical fact. During the last six months of the Conservative Government, who left office in 1974, price increases were 8·4 per cent. During the most recent six months of the present Government, price increases have been 3·4 per cent. Inflation began with the Barber printing boom, not with the General Election.
Is my right hon. Friend aware that the Opposition will continue both to select the figures that do their cause the most good and to ignore the truth? Is it not a fact that the Government are now on target for the planned reduction in inflation, that the last six-monthly and monthly figures in particular are most encouraging, and that this should have a suitable effect on wage bargaining throughout the coming six months?
I hope that it will have that effect. If we have a moderate pay round, as I believe will be the case, the improved inflation situation, which will certainly go on into 1978, will last even longer. I am sorry that the Opposition regret that the situation has improved so quickly. I hope that they will rejoice with me at the new improvement. We now have a lower inflation rate than the OECD average, which is what we have wanted for a long time but have not had for very many years.
No; I think that that is wholly wrong. If wage increases continue at present levels and thereby earnings are held down in the way that they have been—to the 10 per cent. ceiling, more or less—since August, I think that inflation will continue on the downward path. I see no reason to change the estimates that I have made regularly for the last year, all of which have proved right up to now. I hope that the final estimate for single-figure inflation throughout 1978 will have the same degree of accuracy.
There is absolutely no evidence for that. Neither the TUC nor the CBI believes it to be so. A number of Conservatives, some of whom are in the Shadow Cabinet and some of whom would like to be, insist that earnings will rise to that level, but there is absolutely no statistical evidence for saying that.
Although my right hon. Friend says, quite rightly, that there has been a considerable improvement in the inflation rate, will he maintain his efforts within the Government to ensure that this continues to improve? Also, have the Government had any indication from the Opposition that there is any satisfaction among them now that the figures are improving as such great play was made by them when the figures were much worse?
My hon. Friend will have seen here this afternoon not so much satisfaction as despair, and I regard it as both pathetic and deplorable that, when something is happening which is obviously for the benefit of the British people as a whole, the Opposition should be treating it in a wholly party political fashion.
Is not the right hon. Gentleman being somewhat less than frank? Is it not a fact that the Chairman of the TUC acknowledged last Thursday that the increase in earnings was running at about 17 per cent., which, according to the Chancellor's own reckon ing, means at least fast-rising inflation in the second part of next year? Does the Minister repudiate the Chancellor's statement and that of the Chairman of the TUC? If not, how can he reconcile that with the forecast that he has just given?
I will have to ask the hon. Lady to give me the reference to what was said by the Chairman of the TUC. If he said that earnings increases were running at 17 per cent., I have to say—despite the admiration and, I hope, friendship that I have for him—that he was wrong, because that is not the figure. Before I say that to him, I shall need the hon. Lady to produce the kind of substantiation which comes rarely from her.