HC Deb 10 July 1968 vol 768 cc107-9W
Mr. Roy Hughes

asked the Secretary of State for Employment and Productivity whether she has now considered the Report of the Cost-of-Living Advisory Committee; and if she will make a statement.

Mrs. Castle

Yes. The Cost-of-Living Advisory Committee has submitted a unanimous report, copies of which are now available to hon. Members in the Vote Office. The Committee were asked to re-examine the desirability of publishing retail prices indices for special social and income groups and by regions and to consider again the treatment of owner-occupiers' housing costs and the possibility of including meals bought and consumed outside the home among the price indicators used for the Index of Retail Prices.

The main conclusions and recommendations are:

First, two special retail prices indices should be computed and published for one-person and two-person "pensioner" households at present excluded from the weighting pattern of the Index of Retail Prices. These two indices should exclude housing costs and should be published as quarterly averages only.

Second, there is no strong case at present for compiling indices for any other special social or income groups, though the possibility of compiling an index for low-income households with three or more children should be further considered after practical experience has been obtained of the working of the proposed new pensioner indices.

Third, whether reliable retail price indices for regions can be compiled at reasonable cost requires a detailed study of the technical problems involved. The Committee recommends that the Department of Employment and Productivity should accept the responsibility for initiating such a detailed study as soon as possible, in consultation with other Government Departments concerned.

Fourth, the Committee were not able to suggest any improvement, at present, in the existing methods of treating owner-occupiers housing costs and recommend that the existing methods should be continued.

Fifth, meals bought and consumed outside the home should be included among the price indicators used in the index. This recommendation was submitted in an interim report, was accepted and has already been implemented.

Sixth, the Committee examined a number of detailed criticisms of the method of compiling the index and has made: some suggestions for improvement. The Committee's general conclusion is that in its present form the index is working well and can be accepted with confidence as a satisfactory measure of changes in the average level of retail prices.

The Government accept the Committee's, recommendations and steps will be taken to implement them as soon as this can be done. The detailed study of the technical problems of compiling reliable price indices for regions is beginning immediately.