HC Deb 08 February 1961 vol 634 cc398-9
48. Mr. W. Hamilton

asked the Minister of Labour why National Health and National Insurance contributions are not included as an item taken into account in assessing the cost-of-living index; and whether, in view of the increased and increasing importance of this item in the budgets of millions of people, he will now give it due weight in the index.

Mr. P. Thomas

On the recommendation of the Cost of Living Advisory Committee (Cmd. 9710) these contributions and similar payments were excluded because of the difficulty of measuring the services provided in return. I understand that no satisfactory way of including them could be found.

Mr. Hamilton

Is the Minister aware that the urgency for reconsideration of this matter has been increased by recent developments? Is he aware that, when the new Insurance Scheme comes into operation in April and the new Health Service charges and the consequent contributions are imposed, something like 12s. a week will be taken out of a basic wage very often of £8 a week? That represents a very substantial part of a wage of that kind. Is it not a fact that to suggest that this cannot be incorporated in the cost-of-living index makes nonsense of the index?

Mr. Thomas

As to reconsideration the operation of the index is constantly under review by the Ministry of Labou but, as this item has been considered by the Committee on three different occasions, each with the same result, I see no purpose in asking the Committee to look at it again.

Mr. Lee

Would not the hon. Gentleman agree that my hon. Friend the Member for Fife, West (Mr. W. Hamilton) is on a most important point? Would he agree that especially those in the lower wage brackets will now be asked to pay something which is an appreciable percentage of their income and which in fact is a penal poll tax9 Will he ask his right hon. Friend to agree to submit this item again to the Cost of Living Advisory Committee in view of the great importance and the great hardship which is involved?

Mr. Thomas

There are many payments such as Income Tax which it has been found could not be included in the index but, as I told the House, the index is constantly under review by my Department.

Mr. J. T. Price

Will the hon. Member explain why it has been found to be impracticable to include a factor for National Insurance contributions in the formula when a factor is included by the mathematicians for domestic insurance, such as industrial injuries, death benefits and so on, paid to private insurance companies? Why can they make an allowance for one item when they miss altogether a much bigger item which has a bigger impact on the wage envelopes of millions of people?

Mr. Thomas

I am afraid that I am not in a position fully to answer that very complicated question, but I can tell the hon. Member that matters such as life insurance premiums are certainly not included in the index.