We have written to the Chancellor of the Exchequer with our concerns regarding the news that tuition fees in England are to be uprated by RPIX.
RPI (and hence RPIX) has been discredited as an inflation measure for some time, having lost National Statistics status in 2013, with ONS strongly discouraging its use due to issues with its methodology.
The letter from RSS President Dr Andrew Garrett and RSS CEO Dr Sarah Cumbers stresses that this is an example of the inconsistent use of different inflation measures by government which gives the impression that government is ‘inflation shopping’.
It notes that when households are paying, for example on student loans or air passenger duty, RPI is used, which typically shows a higher rate of inflation than CPI. In contrast, when the government is paying, for example, for public sector pensions, CPI is used which shows a lower rate.
The letter suggests that the Household Costs Indices (HCIs), currently under development by ONS and an index the RSS has long campaigned for, would be the natural successor to the RPI for uprating purposes, since the macroeconomic measure, CPI was not designed for this type of use.
While the government may want to wait until the HCIs gain accredited status, we urge policymakers to ensure the ONS has the resources to continue their development and that when uprating by inflation, the choice of inflation measure must be clearly stated and justified.
Read the letter.