HC Deb 17 November 1953 vol 520 cc141-2W
81. Mr. McKay

asked the Chancellor of the Exchequer, in view of the fact that the internal purchasing power of the £ sterling was estimated at 18s. 10d. in September, 1953, as compared with 20s. in October, 1951, how much worse off the married man with three children and an income of £500 for the financial year 1952–53 is now, despite the extra 6s. a week he receives in children's allowances.

Mr. R. A. Butler

The net income, including children's allowances, would be £524 1s. in 1951–52 and £541 12s. in 1953–54. Taking the purchasing power of the £ at 18s. 10d. the latter figure would be equivalent to £510 at the prices of October 1951.

It must be remembered, however, that the average weekly earnings of adult male wage earners have risen by 12 per cent. between October, 1951, and April, 1953 (which is the latest available date); so that the wage earner who, in October, 1951, was earning £500 is today, on the average, earning £560. Adding children's allowances, and deducting tax, this would give a net income of £600, or £565 at the prices of October, 1951.

82. Mr. McKay

asked the Chancellor of the Exchequer if he is aware that the Ministry of Labour's cost-of-living index at October, 1951, was 129 and in September, 1953, it was 140, indicating that the value of the £ sterling had gone down by 1s. 8d.; and what were the main classes of commodities he took into his calculations, in addition to the articles taken in by the Ministry of Labour, to bring the value of the £ sterling down by 1s. 2d.

Mr. R. A. Butler

The estimate of 1s. 2d. for the fall in the internal purchasing power of the £ sterling between October, 1951, and September, 1953, was based on the movement shown between 1951 and 1952 by the price index covering all consumers' goods and services, as calculated annually for the estimates of the national income, and since then by the Interim Index of Retail Prices.

The difference between this figure and one obtained by using the Ministry of Labour's interim index alone is due to differences in the relative importance of the various groups of goods and services in the two indices rather than to the exclusion of any particular items from the Ministry of Labour's index.