HC Deb 17 December 1981 vol 15 cc444-5
16. Mr. Dykes

asked the Chancellor of the Exchequer what further use he intends to make of the tax and price index.

Mr. Brittan

The Central Statistical Office will continue to publish the tax and price index each month. It provides a useful supplement to the information contained in the retail price index.

Mr. Dykes

Would it not now be better either to change the inputs or to abolish the index altogether?

Mr. Brittan

I do not think so.

Mr. Straw

The Chief Secretary said that the TPI was a "useful supplement". Has he forgotten that the former Financial Secretary said that if we wanted a general guide to the changes in total costs facing taxpayers we should look at the TPI, not the RPI, because it is a truer guide? Since the TPI has increased by 15.2 per cent. in the last year, while the RPI has risen by only 11.7 per cent., do the Government still remain of the view that the TPI is the truer guide?

Mr. Brittan

The hon. Gentleman has given a characteristically selective quotation from what my right hon. Friend the former Financial Secretary said. That selective quotation has been refuted at least half a dozen times. It is important for wage bargainers to concentrate not on cost of living increases, but on what employers have the ability to pay.

Sir Anthony Meyer

What shall I tell the nurses in my constituency and other constituencies who ask why they should be held to a 4 per cent. increase when local authority manual workers have achieved an increase of double that amount and the miners appear to be going on strike to get more than three times that amount?

Mr. Brittan

Some of those matters are still to be seen. As my right hon. Friend the Prime Minister pointed out, the consequence of any excessive increase in pay for local authority employees will be an increase in the rates, from which everyone will suffer. That cannot be sensible.

Mr. Maclennan

Do the Government hope that the percentage increase in income next year will be below the percentage increase in prices?

Mr. Brittan

It is not possible to give an answer to that question in that form now.

Mr. William Hamilton

Is the Chief Secretary aware that, whatever index he uses, the irrefutable fact is that everyone earning more than £20,000 a year has been provided with incentives by the Government and everyone on average or below-average earnings has had a massive kick in the teeth?

Mr. Brittan

That is a classic over-simplification, which fails to take account of the impact of current tax rates on the marginal rates of increase in earnings across the board at a perfectly normal level.