Question to the HM Treasury:

To ask the Chancellor of the Exchequer, which stakeholders he or his ministerial colleagues have met since December 2019 to discuss changing the formula for calculating the Retail Price Index.

The Retail Prices Index (RPI) is a measure of inflation with a number of shortcomings. To address these shortcomings, the UK Statistics Authority (UKSA) has made a proposal to reform RPI by bringing the methods and data sources of the Consumer Prices Index including owner occupiers’ housing costs (CPIH) into RPI. Owing to the use of RPI in specific index-linked gilts, prior to 2030 the Chancellor’s consent to this proposal is required before it can be implemented.

As outlined in the consultation document (https://www.gov.uk/government/consultations/a-consultation-on-the-reform-to-retail-prices-index-rpi-methodology), factors related to the impact of the proposal on the holders of index-linked gilts are likely to be relevant to the Chancellor’s decision on whether he would offer his consent to such a proposal before 2030. At the Budget in March, the government and UKSA launched a consultation to seek views on whether UKSA’s proposal should be implemented at a date other than 2030, and, if so, when between 2025 and 2030.

The consultation closed for responses on 21 August. The government and UKSA will respond to the consultation in the autumn. As Economic Secretary to the Treasury, in July 2020 I chaired two roundtables comprising representatives of index-linked gilt holders to hear their views on the impact of the timing of reform. Further details of these meetings will be published as part of the response to the consultation.