Retail Prices Index

Lord Lawson of Blaby Excerpts

Wednesday 24th April 2013 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, we could try giving up and steering in the dark if we want to, but trying to assess as well as we can what is happening in our economy and in the economies of our partners is a necessary part of the way we have to operate. We recognise that all measures will be imperfect. The decision to make changes in the RPI was taken to make it a little less imperfect than it was.

[Lord Lawson of Blaby]

My Lords, as the Minister who, a little over 30 years ago introduced RPIX, is not the most important thing to forget about all these indices and just to keep inflation really low? Then the difference between these indices is neither here nor there.

[Lord Wallace of Saltaire]

Digging into this, I am told that one of the problems is the way in which the RPI was estimated. They changed the way in which they calculated changes in the pricing of clothing, which got more and more difficult as discount stores were adopted. That is why the gap between CPI and RPI has widened in the past four or five years. That has a substantial knock-on effect for the Government, the Exchequer and for consumer prices.