§ Mr. Alisonasked the Chancellor of the Exchequer what he estimates is the effect on the index of retail prices for food, for services and for all items of the selective employment tax.
§ Mr. TaverneIt is estimated that if the tax were fully passed on in increased prices, the total effect of the S.E.T., including the increase announced in the Budget, would be to raise the all-items retail price index by about 1 per cent. Clearly the actual effect must depend on the ability of the sectors affected to absorb cost increases, and this ability will not be the same in all circumstances. Calculations of the effect of the S.E.T. on the retail price index are necessarily uncertain, and it would not be justified to give estimates for separate components of the index.