Benefits-inflation link reviewed?

Journalist Paul Waugh is reporting on his blog that Chancellor George Osborne may not decide to uprate all welfare beneifts by today’s 5.2% CPI rate.

At this morning’s press conference, Waugh says he asked “Was the Government considering reviewing the September link to benefits uprating? Is it possible that the Chancellor could look at a new measure for the uprating process, say a longer period than just the snapshot of September?”

He notes that the spokesman’s reply was fascinating. First he pointed out that the Cabinet had indeed discussed the fact that the inflation rate could impact on benefits uprating.  Then he says that he added this:

“The September figures are usually used for uprating of benefits and so on and the final decision on that used to happen in the PBR and [now] happens in the Autumn Statement. Those issues are issues for the Chancellor. The September inflation figures are usually the ones that are used but the actual decision is taken at the time of the PBR or Autumn Statement.”

Waugh speculates that Osborne will be wary of being seen to block pensioners any uprating they’re due, but may be tempted to separate out benefits with a below-inflation rise.

Benefits-inflation link reviewed?

TUC General Secretary Brendan Barber has said that the possibility that the Government would not uprate benefits in line with this month’s inflation figures was “very alarming”.

http://www.politicshome.com/uk/story/21313/inflation_set_for_three_year_high.html

Another example of goalposts being moved by our wonderful coalition. Is it the claimants fault that their money is becoming more and more worthless as this mob cant get inflation under control? I thought we were ALL in this together (works both ways!)So much for eradicating poverty.

Paul Waugh has updated his blog to say:

3.45 UPDATE: Treasury sources tell me not to read too much into all this: “We will follow standard procedures.”

That may be enough to kill off the speculation now.

So we wait and see for now, I guess.

Don’t forget that it’s still 0.4% lower uprating than it would have been if they’d retained RPI as the link.

Indeed Gareth.

Notwithstanding this fact, the Telegraph are reporting that Frank Field has said that the Chancellor should honour his “commitment” to use the new inflation figure but urged him to consider changing the rules.

“There certainly is a case for a moving average — you might take a three month moving average (of inflation). It would protect taxpayers against unexpected blips like this one,” he said. “But the rules are the rules. It is best to think ahead to change things, not change them when you don’t like them.”

Meanwhile, James Wharton, a Conservative MP on the Commons public accounts committee, said the CPI figures were “distorted” and called on the Coalition to find a new measure of inflation for uprating benefits. “We need to find a measure that takes into account not just a snapshot of inflation for one month, which may be artificially high, but reflects the prices that people are actually paying,” he said.

“The Bank of England is saying this is a blip and that inflation is going to tumble over the next few months, so if we fix on this figure of 5.2 per cent benefits claimants and pensioners are going to do very well out of it.”

Setting benefits by inflation ‘is unfair’

I do find the notion that benefit claimants and pensioners are doing very well from their circumstances, in the current economic climate, to be somewhat laughable, even if I’m being generous. Especially from an MP who, according to theyworkforyou, voted very strongly for VAT increases and university tuition fees, amongst other things.

It’s not inflation over one month it’s inflation over a year!

CPI = Cut Poorer Increases

You mean the Govt’s cosy chat with the utility companies (landlords, food manufacturers, oil companies - who donate how much to the Conservative party p.a.?) won’t put a quick end to inflation of basic commodity prices?