HC Deb 05 June 1967 vol 747 cc92-3W
Mr. Arthur Lewis

asked the Minister of Labour whether he will state to what extent the cost of gas supplied to industry and the general public is used in his cost of living index figure; and by how much the index figure would rise if the proposed 8 per cent. increase in the charges made for gas supplied to industrial users and the general public were initiated by the Gas Council.

Mr. Hattersley

The Index of Retail Prices measures changes in the average level of prices of goods and services purchased by domestic consumers. The weight assigned in the index to gas used by domestic consumers is 11 out of a total of 1,000 for all items. The direct effect of a rise of 8 per cent. in domestic gas prices would therefore be a rise of nearly one-tenth of one per cent., in the all-items index figure. Unless they are absorbed by increased efficiency, the indirect effects on the index of increased gas prices to industry, might be about a half of the direct effects, producing a total result of rather less than 0.15 per cent.

Mr. Arthur Lewis

asked the Minister of Labour on what basis his cost of living index figure takes account of electricity charges paid by industry in general and private consumers in particular; and what effect he estimates an eight per cent. to 15 per cent. increase in these charges will have on an accumulative basis to the costs of fares, rents, rates, steel, coal, manufacturers, wholesalers and retailers, on the basis that all of these increase their prices and charges to offset their electricity charges.

Mr. Gunter

On average, expediture on electricity accounts for about 2.3 per cent. of the total expenditure on goods and services by domestic consumers, whose expenditure patterns provide the weighting basis of the Index of Retail Prices. The direct effect on the Index of an 8 per cent. to 15 per cent., increase in electricity charges is therefore a rise of between 0.2 and 0.4 in the all-items index figure. Unless they are absorbed by increased efficiency, the indirect effects on the index of the same increases for electricity supplied to manufacturers, wholesalers and retailers, might be about half of the direct effects.