§ Baroness Jegerasked Her Majesty's Government:
What is the present level of inflation in the official pensioners' price index compared with the general retail price index; what is the purpose of the pensioners' index; and whether any future adjustment of pensions should be made in the light of the pensioners' price index.
§ Lord TrefgarneOver the lifetime of this Government the general index of retail prices has risen faster than the pensioner price indices, and retirement pensions have risen faster still. But between the third quarter of 1981 and the same quarter of 1982 the pensioner indices rose by between 8.2 per cent. and 8.7 per cent., whereas the general index of retail prices rose by 8 per cent., if housing costs are included, and by 7 per cent. if they are excluded. The pensioner indices cover fewer pensioners than the RPI but are intended to monitor the price experience of a large, stable and important group of low income households whose expenditure patterns differ markedly from that of households covered by the general RPI. There would seem to be no advantage in moving to the use of indices other than the RPI for uprating retirement pensions and other benefits if, as experience shows, the differences in price movements tend to cancel out over time.