Friday, 21 December 2007

Retail Price Index - good enough for MPs - too good for the Police.

The following is taken from this Tuesday's (18/12/07) Hansard written answers:

Mr. Maude: To ask the Leader of the House what plans she has to bring forward proposals to increase the Communications Allowance; and what increase she intends to propose.

Helen Goodman: In accordance with the resolution of the House of 28 March, the Communications Allowance is increased on 1 April each year by the percentage increase in the retail price index as at 31 December the preceding year.
The Communications Allowance provides funds to allow a Member of Parliament, to communicate proactively with their constituents and inform them about an MPs Parliamentary duties. MPs may claim up to £10,000 per year from this allowance. The Communications Allowance may be used to meet expenses for:
• Regular reports and constituency newsletters
• Questionnaires and surveys
• Petitions
• Targeted communications
• Contact cards
• Distribution costs including direct mailing and postage
• Websites
• Some capital purchases
Now, I find this a little difficult to understand. Why is the Communications Allowance increased in line with the RPI (Retail Price Index) and not the CPI (Consumer Price Index)? The basic difference between the RPI and the CPI is that the CPI does not take into account housing costs and in particular owner occupiers’ costs such as mortgage interest payments. So what do mortgage interest payments have to do with the price of stationery?

If the CPI is good enough for calculating public sector pay increases (particularly the Police), then why isn't it good enough to calculate the Communications Allowance? Could it be that if the allowance is calculated using the CPI, then it will only increase to £10,210 - whereas if it is calculated using the RPI, the allowance will increase to £10,430?

Maybe I'm wrong, but this looks like "one rule for us, and another rule for the little people."


Mrs Smallprint said...

And ever was it thus.

GW said...

The retail price index is the RPI (the highest index), the RPIX (the second highest)is the RPI adjusted to eliminate housing costs, the CPI is the lowest - probably a meaningless figure produced by a corrupt government and a gutless civil service. Of course, the highest indicator is the only one good enough for our dictators.

George Warburton

Daily Referendum said...

Cheers George,

Post amended.