A decision on the future of RPI is expected to be announced alongside the Spending Review on 25 November.
This announcement will be informed by the results of the joint consultation by the UK Statistics Authority and HM Treasury on their plans to replace the RPI with the normally much lower CPIH.
Since the start of the 2010s, CPIH has been on average 1.0 percentage points lower than the RPI.
The consultation ended on 25 August – the TUC response can be found here.
The General Secretaries’ statement is as follows:
As representatives of workers and pensioners, we are deeply concerned by the imminent threat to scrap the RPI measure of inflation.
This is not a technical issue. Getting rid of RPI would affect millions of working people – both in terms of pay and pensions.
Two-thirds of private sector schemes are still uprated by RPI. Shifting to the proposed CPIH measure would leave the average male worker with a private sector pension £11,000 worse-off in retirement. And it would leave the average woman worker on a private sector scheme £14,000 poorer.** That is not right.
And if future pay bargaining moves from RPI to CPIH this could reduce pay rises by more than £350 for the average full-time UK worker.
Nobody is claiming the RPI is perfect. But it remains the best measure for living costs and would be straight forward to modernise.
As has been shown across Europe it would be perfectly possible to have RPI existing in parallel to CPIH (or CPI) and have the latter measure focus on guiding monetary policy.
We are disappointed that expert calls to retain the RPI have been repeatedly ignored. The Royal Statistical Society and House of Lords Economic Affairs Committee have both presented compelling evidence for keeping it.
We urge the government to listen to these bodies and to unions. Scrapping RPI will hit workers in the pay packet and make it harder for them to have dignity in retirement.
And it will damage the reputation of inflation measurement in the UK.
Frances O’Grady, General Secretary, TUC
Dave Prentis, General Secretary, UNISON
Len McCluskey, General Secretary, Unite
Warren Kenny, Acting General Secretary, GMB
Dave Ward, General Secretary, CWU
Dave Penman, General Secretary, FDA
Steve Gillan, General Secretary, POA
Mick Cash, General Secretary, RMT
Manuel Cortes, General Secretary, TSSA
Steve Jamieson, General Secretary, College of Podiatry
Dr Paul Donaldson, General Secretary, HCSA
Dilwyn Roberts-Young, General Secretary, National Union of Teachers Wales
Brian Strutton, General Secretary, BALPA
* The pay calculation is based on annual survey of hours and earnings figures for full-time employee earnings.
** The value of pension lost is taken from the Pensions Policy Institute briefing note
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