A Conservative peer has attacked proposed changes to the way the Retail Prices Index is calculated as “inappropriate” and a cynical Government “manouvere” to cut costs.
The Office for National Statistics is considering calculating RPI using the same methods as the consumer prices index, which is usually lower.
It launched a consultation on 8 October which closes on 30 November. Any changes will be announced in January and implemented in March.
Lord Naseby has tabled an oral question in the House of Lords asking why the ONS is reviewing the calculation of RPI. It is due to be answered by Cabinet office minister Lord John Gardiner on 14 November.
The National Association of Pension Funds has warned it could have “huge implications”, with a “far-reaching impact” on pension investments.
It is estimates the index could fall by between 0.3 and 0.9 per cent.
Lord Naseby says: “It is entirely inappropriate at this moment in time when the country is facing austerity. When so many things are dependent on RPI, to alter the basis with which it is calculated is wrong.
“The ONS says it is only going out to consultation but its favoured approach would knock nearly 1 per cent off RPI.
“Excuse me if I am a sceptical old politician but I think it is just a manouvere to reduce the costs to Government. All index linked savings certificates are on RPI and there is a whole stack of other things connected to it so I think it is just a manouvere.”