Tax and Price Index (Hansard, 26 March 1981)

§ 7. Mr. William Hamilton
asked the Chancellor of the Exchequer if he will make a statement on the future of the tax and price index.

§ Mr. Brittan
The tax and price index has been published monthly by the CSO since August 1979 and there are no plans to change this procedure.

§ Mr. Hamilton
Will the Minister now come clean with the House and tell us the exact effect of the Budget proposals on the index? Since the Government took office, has there not been a massive increase in the taxation burden placed on low income families? Does he accept that this index is a more accurate reflection of the reduction in their standard of living than the retail price index? Does he agree with his right hon. Friend the Financial Secretary that if trade unions are to bargain on the basis of any index it would be more accurate for them and more forthright for the Government to accept that they should bargain on this index rather than the retail price index?

§ Mr. Brittan
The hon. Gentleman talks about coming clean. Perhaps he will come clean about his failure to read the written answers which give the answer to his supplementary question. Neither the TPI nor the RPI is meant to be a yardstick for pay bargaining. In pay bargaining, it is necessary to consider what can be afforded by the concern with which the bargaining is taking place. That is the answer to the hon. Gentleman's supplementary question.

§ Mr. Straw
On 17 August 1979 the Financial Secretary said that neither the TPI nor the RPI should be used for wage bargaining. He said: if one wants a general guide to … the total costs facing taxpayers, look at the TPI, not the RPI. It is a much truer guide. If that is so, will the right hon. Gentleman explain why the Chancellor failed to mention at any stage in his Budget Statement the effect on the TPI of the substantial changes in direct and indirect taxation?

§ Mr. Brittan
The hon. Gentleman springs to the defence of the TPI now. He might care to explain why, when the TPI was introduced on 17 August 1979, the response of the trade union movement was to denounce it massively as a way to con people. He cannot have it both ways.