asked Her Majesty's Government:

What would have been the increase in the retail price index and the consumer price index over the past one, three and five years, using equal weights for the expenditure of each household (democratic weights) instead of weights proportional to the expenditure of each household (plutocratic weights).[HL7274]

The information requested falls within the responsibility of the National Statistician who has been asked to reply.

Letter from the Director of Macroeconomics and Labour Market, Colin Mowl, dated 14 September 2006.

The National Statistician has been asked to reply to your recent Parliamentary Question (HL7274) which asked what would have been the increase in the retail prices index and consumer prices index over the past one, three and five years using equal weights for the expenditure of each household (democratic weights) instead of weights proportional to the expenditure of each household (plutocratic weights). I am replying in her absence.

Information in the form requested is not readily available. Calculation of democratic weights for the retail prices index (RPI) would involve a considerable degree of manipulation of data from the Office for National Statistics' (ONS) expenditure and food survey, from which the RPI weights are derived. Specifically, the process would involve returning to the original survey data at household level (that is, each individual response). For each household, actual spending on every commodity would need to be converted into a proportion of the total expenditure incurred by that particular household. These proportions would need to be averaged across all households before using the resultant averages to produce RPI expenditure weights on a democratic basis. Special calculations would also be required to derive the weights for certain housing components whose weights are modelled (that is, mortgage interest payments and depreciation costs). This means that the question can be answered only at disproportionate cost.

However, previously unpublished research by ONS, which is summarised in the table below, gives some indication of the difference between the use of democratic and plutocratic weights in the RPI:

Consumer prices index (CPI) weights are derived from whole economy estimates of household expenditure taken from the national accounts. The source data come from a variety of sources, including non-household surveys, and are therefore not amenable to the construction of democratic weights.

asked Her Majesty's Government:

What was the overall rate of inflation in 2005; and what is their estimate of the overall rate of inflation in 2006.[HL7357]

The information requested falls within the responsibility of the National Statistician who has been asked to reply.

Letter from the Director of Macroeconomics and Labour Market, Colin Mowl, dated 14 September 2006.

The National Statistician has been asked to reply to your recent Parliamentary Question, concerning what was the overall rate of inflation in 2005; and what is the estimate of the overall rate of inflation in 2006. I am replying in her absence. (HL7357).

There are two main measures of inflation produced by the Office for National Statistics, the consumer prices index (CPI) which forms the basis for the Government's inflation target and the retail prices index (RPI) whose many uses includes indexation of state benefits and pensions. The percentage change over 12 months in the annual average index in 2005 for the CPI is 2.1 per cent. The corresponding figure for the RPI is 2.8 per cent.

The latest estimate of inflation in 2006 is for July when the rate of CPI inflation was 2.4 per cent and the rate of RPI inflation was 3.3 per cent.