I am grateful to my right hon. Friend for that answer. Are not those low inflation figures a great tribute to and justification for my right hon. Friend's low inflation policy? Will my right hon. Friend confirm that it is his intention and that of the Government to continue that policy to make Britain a low-inflation country? Will he comment also on the effect on inflation of an increase in public expenditure of £35 billion a year?
It is absolutely clear that, whatever measure one looks at, inflation is reducing. The headline rate is now down 5 per cent. from the peak, the headline rate minus mortgage interest payments is now 2·9 per cent. down from its peak, and producer prices have also declined by 1 per cent. in the past four months. Encouragingly, too, the rate of increase in earnings in manufacturing industry has fallen by 1 per cent. in the past four months. That is very good news for British industry and very good news for the economy. My hon. Friend is absolutely right. Opposition Members are not remotely interested in the fight against inflation.
As the Chancellor is concerned about earnings and so on, does not he have some responsibility to restrain the exorbitant increases that have been given to people who were on very high incomes in the first place? Is not it absolutely sickening and hypocritical that the very people who are receiving such exorbitant increases—66 per cent. and even more in some instances—are preaching to their work forces about moderating wage claims? Is not it time that we ended such hypocrisy?
My right hon. Friend the Prime Minister has made his views absolutely clear. Although Conservative Members have frequently argued that there is an international market for management, we take the view that some of the recent increases in industry are excessive and are unjustified. I do not believe that it is the purpose or function of government to interfere by rule of law in those matters.
Does my right hon. Friend agree that those who price themselves out of the market, whether they be the chairman of a company or the lowest-paid employee, will lose their jobs?
My hon. Friend is absolutely right. That is why I referred to the decline in the rate of increase in manufacturing earnings, which is good news for jobs and for output.