Secrecy over RPI change indicates a government that is increasingly deranged

I’ve received a reply (from the Cabinet Office) to my query about the changes to the manner in which Manx RPI is calculated on the Island it's clear that the change occurred by diktat rather that with Tynwald approval. The government of course used the ‘cover’ of a ‘consultation’.

My original query was reported on Crown Dependency News:

https://www.facebook.com/crowndependencypoliticalnews/posts/185579325777...

The response to my query about the sample size is also somewhat vague. I had pointed out that UK Regional indexes which are calculated on a much larger sample size are notoriously unreliable.

Perhaps it's unkind but I would say the change of formula was dictated by expediency rather than accuracy so that RPI levels used on the Island are lower. If this is the case it has long term implications for many factors such as increases to benefits and wages are derived from it.

As is the norm most of the evidence surrounding the change is ‘not public’ which begs the question why? Surely on an Island as small as this and a topic as ‘dry’ as this here is no need for such ‘secrecy’. It shows the mindset of a government that seems increasingly deranged!

Here’s the reply from the Economic Affairs Division:

“Dear Mr Moffat,

The change to the calculation of the Retail Price Index was approved through both the Cabinet Office and also the Council of Ministers, and whilst those papers are not public, the information that these decisions were based upon is still available as part of the consultation that we undertook in relation to the Retail Price Index back during 2016, which can be found here:

https://www.gov.im/about-the-government/government/government-consultati...

under the titled ‘Consultation on the Future of the Manx Retail Prices Index (RPI)’.

The change to this calculation was circulated to everyone as part of the press release which was issued in January 2018, in which MHKs and MLCs were provided a copy of as part of our standard procedures, however they were not required to approve the change.

The ONS have not undertaken this change, however in March 2013 they had declassify the RPI using the Carli formula as an official statistic because, in their assessment, it did not meet or conform to international standards for price indices. However I would highlight that Jersey have been producing their RPI using the Jevons formula for a number of years and as part of the process of changing the Manx RPI over to Jevons, we spoke with them. We did also undertake discussions with the ONS to discuss why there was an increasingly large gap being appearing between our CPI and RPI measures, and the outcome of these discussions was that the formula effect that using the two different formulas causes, was being amplified on the Isle of Man because of the difference in the number of prices being collected between the UK and the Isle of Man. In essence because the Carli formula does not handle price volatility very well, the lower number of prices that are collected amplifies this volatility whereas in the UK the larger number of prices which are collected tends to smooth over this.

In terms of the validity of the statistics, whilst we do have a smaller sample size than the UK, our retailer coverage is more than appropriate for the Island, for example all of the major food retailers are included. Our collections will also always be smaller because of the way certain markets for goods and services operated, such as for utilities where prices only need to be gathered from the one or two suppliers that exist on the Island, compared with the UK. We do also, where appropriate, make use of ONS data within the monthly collections.

Kind regards

Economic Affairs”