§ 22. Mr. John Hallasked the Chancellor of the Exchequer what is the basis of the calculation which has led to his estimate that if the starting point for Surtax was adjusted to compensate for the fall in the value of money since it was first fixed at £2,000 it would now be about £3,500.
§ Sir E. BoyleThe calculation was made by linking three series of indices, the Cost of Living Index from 1920 to 1938, the Consumer Price Index from 1938 to 1959 and the Retail Price Index since then.
§ Mr. HallDoes my hon. Friend realise that I shall have to have time to study that Answer? I still find it very difficult to understand how it is that, if the Chancellor of the Exchequer wanted to be paid today a sum equal in purchasing power after tax to what he received after tax in 1938, he would have to have nearly £75,000? Increasing the starting level to £3,500 would not do much to remedy this.
§ Sir E. BoyleThere is a very simple answer. In 1920, which was the year in which the starting point of Surtax was first fixed at £2,000, the Cost of Living Index reached its highest point between 1914 and 1939.