Goverment's RPI ditch would save businesses £40 million- ALMR

ALMR: goverment must ditch the Retail Price Index (RPI) now
02/08/2017 - 09:07
The ALMR has called on the government to bring forward its planned 2020 switch from using the Retail Price Index (RPI) to using the Consumer Price Index (CPI) as its way of measuring inflation.

ALMR chief executive Kate Nicholls echoed a recent state from the Office for National Statistics regarding the ‘unsuitability’ of RPI, and said a switch would save the drinking and eating out industry millions.

Nicholls said: “We have repeatedly called for the introduction of CPI for businesses rates and a move away from the current, unworkable system.

“The government’s own statistics body agrees that the current system of using RPI is totally discredited and only increases costs on employers.

“The move would save eating and drinking out businesses £40 million and would help facilitate discussion between the sector and service providers such as PPL and PRS.”

The ONS gave the green light earlier this week for the use of CPIH, a new national statistic which it said would offer the most comprehensive picture of how prices are changing in the economy.

Despite the announcement, Nicholls feels the switch needs to be made sooner in order to reduce ‘spiralling’ rate costs currently ‘burdening’ the eating and drinking out business.

Nicholls added: “We need action by the government now, not in 2020, if eating and drinking out venues are to continue to grow.

“This simple switch could help minimise inflationary pressures in the supply chain at a time of considerable economic and political uncertainty for the UK."

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