§ 88. Mr. Lewisasked the Chancellor of the Exchequer if he is aware that since 1951 the index of import prices fell from 133 to 114 in 1954, yet the index of prices of all consumer goods and services rose from 136 to 150 in 1954; what was the reason for this; and what action he proposes to take to ensure that when import prices fall these reduced prices will be reflected in a fall in the retail price index and not arise, as has been the case since 1951.
§ Mr. MaudlingThere are several reasons for the divergence between the indices referred to by the hon. Member. The reduction in import prices reflects very largely a fall in the prices of basic materials, which constitute only one and often a small component in the costs of consumer goods. The index of wages, which are a much more important element in costs, rose from 120 in 1951 to 142 in 1954. There are many items on which consumers spend their money, such as fuel, transport, rent and rates which are little affected by import prices, and whose prices are chiefly determined by internal costs.