HC Deb 09 December 1954 vol 535 cc67-8W
Mr. Gaitskell

asked the Chancellor of the Exchequer if he will describe the official indices available for calculating changes in the purchasing power of the £ sterling and the cost of living.

Mr. R. A. Butler

There are three official indices available. These are:

  1. (a) The Cost of Living Index, compiled monthly from July, 1914, to June, 1947, by the Ministry of Labour, and then discontinued. This index was designed to measure the average changes in the cost of maintaining the standard of living prevalent in working-class households in 1914.
  2. (b) The Interim Index of Retail Prices, compiled monthly since June, 1947, by the Ministry of Labour. A wide range of goods and services bought by households of wage earners and others with relatively small incomes is used. Changes in weighting and coverage were introduced in January, 1952, to keep the index up-to-date. It will be further reviewed when the results of the 1953–54 household Expenditure Inquiry become available.
  3. (c) The Price Index of all Consumer Goods and Services, compiled for each calendar year since 1938 by the Central Statistical Office. This index covers the whole range of goods and services purchased by consumers.

It has been the practice both of this Government, and of the last, to answer questions relating to the purchasing power of the £ sterling by reference to the Price Index of all Consumer Goods and Services, wherever possible. But since this index is compiled only for complete calendar years, the Interim Index of Retail Prices is used to bring the calculation up-to-date from the last complete calendar year for which figures are available. When reference is made to years before 1938, the Cost of Living Index is used. Questions which relate to changes in the cost of living are answered by reference to the Interim Index of Retail Prices for periods after June, 1947, or, for earlier dates, by reference to the Cost of Living Index.

It is the practice for answers to questions relating to the purchasing power of the £ sterling or the cost of living to state specifically the indices on which the calculations are based.