§ Mr. Hanley
To ask the Chancellor of the Exchequer whether he will make a statement about the recent report of the Retail Prices Index Advisory Committee.
§ Mr. Major
As I told my hon. Friend the Member for Carshalton and Wallington (Mr. Forman) on 4 July, at column577, the report examines how the price of holidays might be incorporated into the retail prices index and recommends that the Central Statistical Office should begin to collect relevant data and examine a new methodology which the committee has developed. However, there is no recommendation to include holiday prices in the retail prices index for the moment. I am asking the Central Statistical Office to put in hand the data collection and further work necessary to determine whether it will be possible to overcome the methodological problems associated with incorporating a holiday price index into the retail prices index in due course.
The report also examines the way financial services are taken into account in the retail prices index. On this it recommends that the annual fees which are being introduced for the holders of certain credit cards should not be covered by the retail prices index, and that any supplements which retailers might charge to customers using credit cards should also be ignored in constructing the index, at least for the present. It is also recommended that charges for personal banking services and transaction charges incurred by households buying and selling investments should be excluded from the index, but that the coverage of insurance should be extended to include personal accident and "protection-only" life insurance. I have decided to accept these recommendations.127W
The full report is being published today as Cm. 1156 and copies are available in the Vote Office.