Economy: Inflation

Lord Barnett Excerpts

Tuesday 11th March 2014 Lords Chamber

[Lord Newby]

My Lords, I agree with the EEF on the desirability of wage increases, particularly for those on lower incomes and not only, as has happened all too frequently in recent years, for those on the board. I also agree that raising the income tax threshold further is an excellent way of helping people on modest incomes and I hope that we can do more of it.

[Lord Barnett (Lab)]

My Lords, I take it that the noble Lord agrees with Robert Peston of the BBC—I am not referring to my dear and noble friend Lord Peston—who said that, on the figures given by the Government, the change from RPI to CPI would cost £83 billion over 15 years. That would mean substantial losses in retirement for pensioners in private sector businesses, not those in the public sector. This is a substantial loss in revenue for those people. What plans do the Government have to compensate those pensioners in retirement, who will suffer considerably?

[Lord Newby]

My Lords, the noble Lord knows that this Government and the previous Government decided to move to CPI from RPI as a measure of inflation simply because we believe it is a more appropriate way of measuring inflation. It is as straightforward as that. Everyone who is affected by CPI rather than RPI will be affected by a better measure of inflation.