§ Mr. Summersasked the Minister of Labour (1) if he will provide a table showing an estimate of the total number of points by which the retail prices index would fall if there were a reduction of one-fourth in the Customs or Excise duties, and in the Purchase Tax, charged on the items used in the calculation of the index; and an estimate of the number of 16W points, included in that total, which would result from reductions of one-fourth in the Customs of Excise duties or Purchase Tax on each of the following items or groups of items: sugar and cocoa, beer and whisky, tobacco and cigarettes, cinema seats and football admission, petrol, clothing and footwear, and household goods and toilet articles, respectively;
(2) if he will give an estimate of the number of points the index of retail prices would rise if there were a reduction of one-fourth in the food subsidies as a whole.
§ Mr. IsaacsIt is not possible to give exact figures showing the ultimate effect on the prices of articles covered by the retail prices index of a reduction of one-fourth in the net total of food subsidies. The effect would depend, amongst other things, on the way in which the reduction in the total was distributed between different goods whose prices are subsidised. But, if the retail prices of those food items in the index which are affected were adjusted by amounts equivalent to one quarter of the net subsidies it is estimated that the retail prices index would show a net rise of about 2½ points.
As regards the result of reductions of one-fourth in the Customs and Excise duties and Purchase Tax of each of the various items listed, it is estimated that if the retail prices of the articles affected were reduced by an equivalent of such a reduction in the rates of duties and tax, the retail prices index would fall by about five or six points. Between four and five points of this fall would be due to the reduction in duties on drink and tobacco, and roughly one point would be the result of the reduction of taxes, including Purchase Tax, on the other items. I regret that it is not possible to give an estimate in tabular form.