Lord Elton
Main Page: Lord Elton (Conservative - Excepted Hereditary)
Lord Gardiner of Kimble
My Lords, I should emphasise that this exercise, on which I am endeavouring to answer, is a consultation process and that it is only at a latter stage and under very special circumstances that Ministers would become involved in it. If a recommendation were to be made by the statistics authority, the Bank of England would be consulted on whether any proposal would be a fundamental change to the basic calculation of the RPI that would be materially detrimental to the interests of holders of relevant index-linked gilts. It is only at that stage, if the Bank considered a proposed change to the RPI to be fundamental and materially detrimental, that the agreement of the Chancellor would be required. As I have said, I do not think that any of us should prejudge an independent consultation.
Lord Elton
My Lords, did I gather from my noble friend’s answer that the effect on gilts is the only consideration that the Government would have before they made up their mind on this?
Lord Gardiner of Kimble
It is obviously one of the considerations, but there will clearly be a number of considerations. There are effects in terms both of the liabilities for index-linked gilts as well as the assets. However, the point that I wish to make is that there is a process by which all these considerations are made and there are regular reviews of the RPI.