National Insurance (Employers' Contribution)

Oral Answers to Questions — Prices and Consumer Protection – in the House of Commons at 12:00 am on 11th October 1976.

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Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey 12:00 am, 11th October 1976

asked the Secretary of State for Prices and Consumer Protection what is his estimate of the effect on the Retail Price Index of the increased employers' contribution to national insurance.

Photo of Mr Robert Maclennan Mr Robert Maclennan Parliamentary Under-Secretary (Department of Prices and Consumer Protection)

My right hon. Friend the Chancellor of the Exchequer told the House on 1st August that the estimated effect would be to add about 1 per cent. to the RPI by early 1978.

Photo of Mr Giles Shaw Mr Giles Shaw , Pudsey

Does the Minister agree that to add anything to the RPI at this time is retrogressive? Why not bear in mind small businesses and industrial costs in areas such as that from which I come? If the Government want to regenerate British industry, why not cut expenditure instead of taxing jobs?

Photo of Mr Robert Maclennan Mr Robert Maclennan Parliamentary Under-Secretary (Department of Prices and Consumer Protection)

I presume the hon. Gentleman will accept, because his party has been pressing for it, that the public sector borrowing requirement must be reduced at this time if the rate of inflation is to be contained. It is an important part of the Chancellor of the Exchequer's strategy to bring that about. Secondly, the hon. Gentleman will appreciate that the immediate impact of that will not be felt until May, and therefore to some extent his point is taken.