UK universities employer calls for higher RPI for me and lower CPI for thee!
In defence of its offer of a 1.1% inflationary pay increase, our employer rejects RPI as a statistically unsound measure of inflation (for reasons along the lines I mention here) and presses for benchmarks against other measures of inflation which have shown more modest increases.
But in its defences (click here and here) of an increase in tuition fees from £9,000 to £9,250, our employer claims that this is justified on grounds that it “is limited strictly to an inflationary rise of 2.8% in 2017–18”, thereby “maintaining the income that universities receive in real terms”. Astonishingly, however, here our employer endorses an RPI-based measure of inflation, even though this measure (RPIX) employs the very methodology that they reject as statistically unsound in pay negotiations!
If an RPI-based hike in tuition fees is needed to maintain income in real terms, then so is an RPI-based increase in pay. The figure of 2.8% was based upon an Office for Budgetary Responsibility forecast for RPIX in 2017–18. RPI and RPIX (=RPI minus mortgage costs) are currently running at 2.0% and 2.2% respectively, whereas CPI and CPIH (=CPI plus housing costs) are currently running at 1.0% and 1.2% respectively. Our employer is therefore offering us an increase in pay along lines of CPI. If they are unwilling to increase this offer to RPI, on grounds that RPI is a flawed measure of inflation, they will be hypocrites if they do not decrease the 2017–18 increase in tuition fees to the OBR’s forecast of a 1.7% rise in CPI for that period.
Our employer can’t have it both ways: not RPI for me and CPI for thee.