Inflation

Oral Answers to Questions – in the House of Commons at 12:00 am on 24th July 1980.

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Photo of Dennis Canavan Dennis Canavan , Stirlingshire West 12:00 am, 24th July 1980

13. Mr. Canavan asked the Chancellor of the Exchequer what is the current rate of inflation.

Photo of Mr Martin Flannery Mr Martin Flannery , Sheffield, Hillsborough

15. Mr. Flannery asked the Chancellor of the Exchequer what is the current rate of inflation; and what it was in 1979 and 1978 at this time of year.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

The retail prices index rose by 21 per cent in the 12 months up to June 1980. In the comparable periods up to June 1978 and June 1979, the index rose by 7·4 per cent and 11·4 per cent respectively.

Photo of Dennis Canavan Dennis Canavan , Stirlingshire West

Since we have one of the lowest wage economies in Western Europe, why does the Chancellor blame so-called high wages for the high rate of inflation which he has created? When he said in his television broadcast last week that we are paying ourselves too much for producing too little, was he referring to himself since he will soon be earning £30,000 a year for producing nothing but high inflation and record unemployment?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

I wish the problems about which the hon. Gentleman is obviously anxious were capable of being solved by abuse of that kind. He must note that even from the figures that I have given the rate of inflation has been increasing for the last two years. The downturn this month is the first step in the right direction. The problem about our economy and the comparison between standards of living is that even in the last two years pay rose 10 times faster than productivity. That is the reason for the difference in our living standards and those in the rest of Western Europe.

Photo of Mr Martin Flannery Mr Martin Flannery , Sheffield, Hillsborough

Will the Chancellor of the Exchequer admit that his Government's policies more than doubled the rate of inflation that existed when the Labour Government left office? When will he admit that the Government's policies are an utter failure and that they are so doctrinaire as to be almost unbelievable? Does he accept that there is further unemployment in the pipeline and that the situation has run away with the Government, who have no idea how to handle this dreadful situation?

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

Far be it from me to enter a competition in doctrinairism with the hon. Gentleman.

Photo of Mr Geoffrey Howe Mr Geoffrey Howe , East Surrey

I remind the House that the rate of inflation when we came to office—the rate at which prices had been rising in the last six months of the Labour Government—was substantial—14 per cent.—and rising.