§ 78. Sir I. Fraserasked the Minister of Pensions for an estimate of the amount of money based on the price index of consumer goods and services required to be paid to a war pensioner today to have the same purchasing power as the basic rate of 40s. had in 1919, 1932 and 1938, respectively.
Mr. AmoryMeasured by the particular method suggested in the Question, the amounts required to produce the purchasing power of 40s. in 1919, 1932 and 1938 would be about 67s., 100s., and 92s. The basic pension of 40s. was, however, fixed in 1919 on a cost of living basis and was not reduced as the cost of living fell, the appropriate rate based on the relative 29W cost of living figures in 1932 and 1938 being about 27s. and 29s. respectively. Comparison, therefore, with 40s. in those years is not a valid basis for assessing the present rate. Based on the old cost of living index to 1947 and since then on the existing Retail Prices Index the current rate appropriate to 40s. in 1919 would be about 52s.