§ 7. Mr. Osborneasked the Chancellor of the Exchequer the purchasing power of the £ today, approximately, as compared with 20s. in 1924.
§ Mr. R. A. ButlerTaking the internal purchasing power of the £ as 20s. in 1924, it is estimated that the corresponding figure for October, 1955, is 8s. 8d. This estimate is based on the Cost of Living Index from 1924 to 1938, the consumer price index from 1938 to 1954, and the Interim Index of Retail Prices thereafter.
§ Mr. OsborneDoes this 8s. 8d., coupled with the figures I shall receive in answer to Questions Nos. 5 and 6, show that the investing public, the savers of the nation as a whole, over the last thirty years have lost a great deal of money through inflation, instead of gaining?
§ Mr. ButlerInflation never helps savers or those on fixed incomes. That is precisely why we are attacking inflation, with such success.
Mr. H. WilsonIgnoring that last joke by the Chancellor, may I ask whether he saw an article in the Manchester Guardian last week showing that anyone who purchased a representative £1 million worth of equity shares in 1919 would find that those same shares were worth £27 million at the present time?
§ Mr. ButlerI have not seen that instance; perhaps the right hon. Gentleman will bring it to my notice. Usually we get complaints from the other side of the House about people making gross profits. On this occasion, the right hon. Gentleman is complaining about losses.
§ Mr. NabarroIs not a very satisfactory hedge against all inflationary tendencies greater investment in tax-free National Savings Certificates?
§ Mr. ButlerYes, Sir.
Mr. WilsonSince, obviously, the right hon. Gentleman misheard what I said, may I ask whether he is aware that the figures in the Manchester Guardian, which related to the Financial Times index of securities, showed an increase of from £1 million to nearly £27 million in equity shares?
§ Mr. ButlerI did mishear. In that case, will the right hon. Gentleman kindly let me see the figures?
§ 36. Mr. Holtasked the Chancellor of the Exchequer, assuming the purchasing power of the £ in March, 1946, to be equal to 20s., what was the value of the £ in March, 1950, 1951, 1952, 1953, 1954, 1955, and in November, 1955.
§ Mr. R. A. ButlerI will, with permission, circulate the reply, which contains a number of figures, in the OFFICIAL REPORT.
§ Mr. HoltWhat point does the Chancellor expect the value of the £ to have reached by November, 1956?
§ Following is the reply:
Taking the internal purchasing power of the £ as 20s. in 1946, it is estimated that the corresponding figures for March, 1950, 1951, 1952, 1953, 1954, 1955, and for October, 1955, are:16s. 6d., 15s. 11d., 14s. 8d., 14s. 2d., 14s. 0d., 13s. 7d., and 13s. 1d.The basis of this estimate is as follows. Figures were calculated in the first place for the calendar years 1946–54 by using the Consumer Price Index. The Interim Index of Retail Prices was then used as a link to provide figures for March of each year and for October, 1955. No monthly figures on a comparable basis can be calculated for 1946; the average for that year has been used as a base.