Retail Price Index (Weighting) (Hansard, 22 January 1979)

§ 22. Mr. Nelson
asked the Secretary of State for Employment what representations he has received concerning the present system of weighting in the retail price index.

§ The Under-Secretary of State for Employment (Mr. John Grant)
Representations have been received jointly from the Civil and Public Services Association and the Low Pay Unit asking for consideration to be given to the construction of a separate prices index for low income households for which a different system of weighting would need to be considered.

§ Mr. Nelson
Has the Minister seen the findings of the Child Poverty Action Group showing that, as prices have more than doubled under the Labour Government, the hardship faced by the low income families has been severe? Does he agree that such families, who pay a higher than average proportion of their income on food, clothing and rent, have faced considerable hardship under a Labour Government?

§ Mr. Grant
I know an elephant when I see one, and it does not require a new set of statistics to prove that those on low pay and fixed incomes have suffered disproportionately, and always will, at a time of high inflation and a wages free-for-all. The sooner the Opposition recognise that fact, the better it will be for those on low incomes.

§ Mr. Hooley
Does my hon. Friend agree that it is absurd to include two highly dangerous and socially destructive drugs, namely alcohol and tobacco, in calculating the retail price index? Since this has implications for taxation policy, will he consider removing those items from the calculation?

§ Mr. Grant
That is a matter which the Retail Price Index Advisory Committee 22 might wish to examine. But those items form a considerable proportion of spending in many households, whether low income or otherwise.

§ Mrs. Kellett-Bowman
Is the Minister aware that if the Labour Party had not destroyed the tax credit system, which was carefully planned by the Conservatives, those who are now enduring hardship, particularly old-age pensioners, would not now be suffering?

§ Mr. Grant
It is time that the Conservatives stopped shedding crocodile tears about those on low pay and pensioners. The Labour Government have taken a number of measures designed to help those on low incomes, and I think that they have been effective.

§ Mr. Mike Thomas
Given that the purpose of different forms of retail price index is to represent the actual spending of different groups, and in view of the use made of the index relating to pensioners, what response will my hon. Friend make to the representations rather than merely replying that he is receiving them?

§ Mr. Grant
No, I cannot say that at present, but those matters are receiving careful consideration. We shall be replying to those two organisations shortly.

§ Mr. Maxwell-Hyslop
Since in some areas of the country, such as Devon and Cornwall, average incomes are way below the national average and yet the cost of living on many items is higher, will the Minister use a tiny amount of computer time to arrange for cost-of-living indices to be prepared and published on a sub-regional basis?

§ Mr. Grant
That matter can be examined, but I wish to warn the hon. Gentleman that a further breakdown of that kind will use not merely more computer time but more Civil Service time. I hope the hon. Gentleman will bear that in mind.