§ Mr. Rentonasked the Secretary of State for Employment on what basis the retail prices index is compiled; who makes the judgment on the percentage by which the retail price index has moved; and what recent changes have been made in the basis on which the retail price index is calculated.
§ Mr. Waddington:The retail prices index is designed to measure the change from month to month in the average level of the prices consumers in the United Kingdom pay for the goods and services they buy. The coverage and method of construction of the RPI are well established and follow the recommendations of the retail prices index advisory committee. A description of the RPI can be found in the article "The non-statistical reader's guide to the retail prices index". published in the October 1975 issue of the Employment Gazette.
It is the responsibility of my Department to compile the RPI and to publish details of its movement. This is a matter 240W of measurement rather than judgment. Some 130,000 prices are collected each month throughout the country and these are combined, making allowance for their relative importance in household budgets according to regular information obtained on actual expenditure patterns, to give an overall measure of price change.
On the recommendation of the retail prices index advisory committee some technical improvements in the method of calculation of the index were made in 1978—see page 148 of February 1978 issue of the Employment Gazette. No changes have been made since that time apart from those that are required to ensure that the index is up to date, for example, in terms of consumption patterns and product coverage.