§ 17. Sir J. Edenasked the Minister of Labour what is his estimate of the effect of devaluation of the £ Sterling on the cost of living index; and what will be the resulting total additional cost in increased wages where wage rates are automatically linked to the index.
§ Mr. HattersleyI estimate that the devaluation of the £ Sterling will raise the Index of Retail Prices by 2½ to 3 per cent. The effect of future index movements on cost-of-living sliding-scale arrangements for manual workers cannot be forecast with any precision, but it is estimated that it might add something of the order of £100,000 to the weekly wages bill.
§ Sir J. EdenIs it not a fact that prices are rising very rapidly at the moment, and has not the hon. Gentleman taken very clearly into account the consequential effects on wage rates of the movement of prices themselves?
§ Mr. HattersleyNo. We have considered all these things and the best estimate we can give to the House is 2½ per cent. or 3 per cent.