Authorities under fire for RPI switch

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The Independent Online

In a move that will embarrass Treasury ministers keen to move the uprating of benefits to the consumer price index (CPI) rather than the retail price index (RPI), the president of the Royal Statistical Society has written to the chairman of the UK Statistics Authority, Sir Michael Scholar, complaining about changes to the official inflation measurement.

The RSS says it is concerned about the way the CPI has "over the years gained increasing prominence in Office for National Statistics material" and is "now the headline index, even though it is not necessarily the best index for all purposes".

Last month, the ONS announced a change in the way it presented inflation data, partly reflecting the Government's increasing emphasis on CPI rather than RPI.

The principal difference between the two measure is that the RPI includes mortgage bills and thus, to some extent, takes into account house prices; the CPI excludes such costs. Generally, the RPI is expected to increase more quickly than the CPI, and the switch between the two will mean a significant loss of income for, for example, families receiving housing benefit over a period of many years.

The RSS said: "We do not feel that CPI should have sole star billing in this way. Giving prominence to CPI ahead of other indices means that users are implicitly being encouraged to use it for purposes, such as wage negotiations, for which it is not ideal."

After the row about political influence at the Office for Budget Responsibility, ministers will be keen that the ONS demonstrates that its judgements are truly independent.

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