I ACKNOWLEDGE with thanks the Summers’ correction with regard to the difference between the composition of the Retail Price Index (RPI) and the Consumer Price Index (CPI), which now includes food and energy costs.
However, the issue I was trying to highlight was that RPI is invariably higher than CPI however the calculation is made.
In June 2010, when the this coalition government came to power the decision was taken that RPI would no longer be used to determine the annual increase in benefits, state pensions and public service pensions. Instead the lower CPI was to be used in the upgrade. At that time the Treasury advised this government that this measure would save £1.2 billion in 2011/12, rising to a total saving of £5.8 billion by 2014/15.
Cllr F Henderson Church Lane Westhoughton
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