§ 1. Mr. Giles Shaw
asked the Secretary of State for Prices and Consumer Protection what is his estimate of the effect on the Retail Price Index of the increased employers' contribution to national insurance.
§ The Under-Secretary of State for Prices and Consumer Protection (Mr. Robert Maclennan)
My right hon. Friend the Chancellor of the Exchequer told the House on 1st August that the estimated effect would be to add about 1 per cent. to the RPI by early 1978.
§ Mr. Shaw
Does the Minister agree that to add anything to the RPI at this 2 time is retrogressive? Why not bear in mind small businesses and industrial costs in areas such as that from which I come? If the Government want to regenerate British industry, why not cut expenditure instead of taxing jobs?
§ Mr. Maclennan
I presume the hon. Gentleman will accept, because his party has been pressing for it, that the public sector borrowing requirement must be reduced at this time if the rate of inflation is to be contained. It is an important part of the Chancellor of the Exchequer's strategy to bring that about. Secondly, the hon. Gentleman will appreciate that the immediate impact of that will not be felt until May, and therefore to some extent his point is taken.