Abstract
This chapter describes the actions of the government in moving indexation from the Retail Prices Index (RPI) to the Consumer Prices Index (CPI). A significant step was made in 2010 when the indexation measure was changed to the CPI for a wide range of taxes and benefits. The government also reconsidered the use of the RPI for bonds and private pensions but after studying the likely consequences decided not to make any change. The continuing use of the RPI, despite it being labelled a “poor measure of inflation” by the UK Statistics Authority, was criticised by the Royal Statistical Society and the House of Lords Economic Affairs Committee in 2018/2019. This led to the announcement by the Chancellor of the Exchequer that the flaws in the RPI would be fixed, but not before 2025.
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