WHY BARBARA CAN'T CUT OUR PRICES
The facts about what we have to pay for, and what we have to pay with, are not in dispute.
Prices have risen so that £1 in October, 1964, is worth only 17s. 6d. today. £16 a week then has dropped to £14 now.
For those in work, wages and salaries have risen. But not for retired people on fixed incomes. They suffer most of all.
Which prices have risen most? The answer was given in the House of Commons a few days ago.
Since October, 1964, fuel has gone up by 21 per cent, food by 13 per cent, durable household goods by 7.5 per cent, and clothing by 6.6 per cent.
Note that the biggest increases come from industries that are under Government control—coal, electricity and gas.
Large as it is, this 21 per cent increase does not include the new gas prices nor the extra 20s. a ton on coke, which was announced two days after Mrs Castle made her first big speech on prices.
Other things haven't risen by quite so much. Why? Because they are subject to competition between manufacturers and between shops, all of which are anxious for our custom.
Nationalised industries have a monopoly. If you want what they sell you have to pay what they charge. But if a clothing manufacturer prices his goods out of the market you can buy a different make.
If British refrigerators go up too much, you can switch to an imported kind. Competition is international.
An example of this is in nylon and Terylene goods. We women probably pay less for nylon stockings now than we did several years ago.
World-wide competition in synthetic fibres has been intense. Our industry here has had to be efficient to survive. And it has.
When it comes to buying goods in the shops, the housewife can always try somewhere else. Especially since Edward Heath abolished resale price maintenance when he was President of the Board of Trade in 1964.
All around the lesson is clear. Competition is better for the customer than State monopoly.
What else can be done to keep prices down? The very reverse of what the Government has been doing.
It can't expect prices to stay stable if it puts on taxes and overheads which add to costs. It had put on plenty even before the last Budget.
Devaluation added further to raw material costs and then the 1968 Budget brought the biggest increases yet, adding 12s. 6d. per man per week to Selective Employment Tax, heavily increased duties on lorries and 4d. more on petrol.
Having done all this to put prices up and increased Purchase Tax as well, Ministers have a nerve to say they are going to campaign to put them down.
It's all a bit phoney because if the Budget means anything, it is that the Government wants prices to rise, and we have got to make do with less at home in the hope that more will be sold abroad.
When it comes to economising, housewives have to, because the Government won't.
Yes we've heard about cuts in Government expenditure several times. To be precise, five times since 1964.
But after all these alleged cuts, the Government is still spending more than it originally planned. Some cuts.
Now let's look at incomes, at what is left in our pocket. Some wages and salaries are up, others haven't changed much.
But direct taxes have gone up, too. That's the only way they ever go under Labour Chancellors.
And we pay quite a lot more each week for the Insurance stamp. So there isn't much left cut of any increase, even for those who got one.
In the coming year a rise of 3½ per cent is the most we can have, and that is not for everyone. With at least five per cent on prices, this isn't exactly a recipe for inspiration or incentive.
More controls are to be brought in to see that we don't get a penny more than the Government allows. Indeed this was a “crucial” part of the Roy JenkinsChancellor's policy.
When trying to judge whether a policy will work, it's a good idea to look at what happened last time.
We had compulsory wage controls in 1966. When the Government came to the House of Commons for special powers we were promised that these would be temporary and not last more than a year.
Some of us didn't believe it, and said so.
So the Government had everything at its command and it used the lot. The people were taxed, Bank Rate was raised, cuts were announced, and wages were pegged.
And the result? Just over a year later things were so bad that we devalued the £. At the end of 1967 we had the biggest trade deficit ever, bigger than in 1964.
Compulsion didn't work then. Why should it work now? It won't because it can only operate unfairly and will cause bitterness and resentment.
The Nation needs something positive to go for. Under Harold Wilson it has been all stick and no carrot.