Lord Bishop of Ripon and Leeds
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(11 years, 7 months ago)
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Lord Wallace of Saltaire
My Lords, I have gone back into the area of statistics and I am happy to tell the House that there is a range of different measures of inflation in Britain—the RPI, RPIJ, RPIX, which excludes mortgage costs, and the RPIY, which excludes tax changes. Then there are the CPI, CPIH, CPIY and CPICT. I hesitate to explain all these in detail to the House.
The Lord Bishop of Ripon and Leeds
My Lords, what advice does the Minister have for those widespread organisations which have historically used the RPI to alter pensions and salaries? They are unclear as to which of the various measures that the Minister just mentioned they should use for those purposes.
Lord Wallace of Saltaire
My Lords, they should not be unclear. The decision to maintain the RPI was taken precisely to leave clarity on the various forms in which the RPI is used as a reference point. I am quite clear from what I have read that the RPI as measured has an underlying upward bias of currently about 0.9% a year above CPI. That means that the Government end up paying more for index-linked bonds and elsewhere, which, in the long run, is against the interests of taxpayers although very much in the interests of investors and pensioners.