§ 20. Mr. Lewisasked the Minister of Labour by how much the cost-of-living index is expected to rise as a result of the increased National Insurance contributions and the proposed increases in National Health contributions.
§ Mr. Iain MacleodAs I explained to the hon. Member in answer to a previous Question on 28th February, 1957, the Index of Retail Prices is not affected by changes in the cost of National Insurance contributions.
§ Mr. LewisCan the Minister explain why it is not affected? Does it mean that every time the Government take action to put up prices, and the cost of living is affected by it, and such things as the Rent Act, that has no effect on the cost of living, whereas when trade unions ask for wage increases to compensate for increased charges, that does have an effect on the cost of living? Why is it that one does and the other does not?
§ Mr. MacleodNo. I think it might suit the Government if all these things were included. For example, Income Tax is not included, and we have not been able to gain the benefit in the Index of the Income Tax reductions that we have made. The reason these matters are not included is because that was the advice of the Cost of Living Advisory Committee.
§ Mr. JayIs not this a case where the cost of living will certainly rise, even if the Index does not, and would not the Minister agree that this is bound to be taken into account in wage negotiations?
§ Mr. MacleodIt may be taken into account, anyway in argument, but whether it is taken into account by a tribunal I do not know; but if we are to have wage increases and increases in taxation of all forms reflected in the cost-of-living index, equally the decreases should also be reflected.