Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has considered moving the uprating of excise duty from Retail Price Index to Consumer Prices Index.

The Government confirms tax rates and thresholds annually. In some cases, reflecting the government’s economic and fiscal objectives, they are uprated to account for inflation.

The Office for National Statistics, regulated by the UK Statistics Authority (UKSA), produces a range of inflation statistics. The most widely used estimates of inflation, both by Government and the private sector, are the Consumer Prices Index (CPI) and the Retail Prices Index (RPI)

The Government agrees with UKSA that RPI has flaws, and at times overstates and at times understates changes in prices. RPI’s shortcomings are well-documented. In 2013, as a result of flaws in the way it is measured, RPI lost its status as a National Statistic. Since 2010 the Government has been reducing its use of RPI and has committed to not introduce any new uses of RPI. Further moves away from RPI are complex and more work is required to understand the costs and benefits of any changes.