IN A MOVE to devastate the finances of some of the poorest people in the country, the Coalition Government is planning to break the link between the inflation rate and benefit payments.
Currently, benefits rise in line with inflation on an annual basis.
But it emerged yesterday that the government is planning to freeze benefits for two years while inflation roars ahead, and then link them only in line with what they term ‘average pay’.
A spokesman for the PCS told News Line yesterday: ‘This is an absolute disgrace.
‘If the government thinks there’s a disparity between the increase in benefits and the increase in wages then it should do something about the latter instead of the former.
‘We think that benefits are low enough as it is and pushing them down even further below inflation would drive even more people into poverty.
‘I’m sure all trade unions will be opposed to this plan.’
A spokesperson for Unison said: ‘Breaking the link with inflation would be a direct hit on those most in need of help.
‘If the government is serious about bringing down the deficit they should be targeting the tax-break businesses and wealthy tax dodgers who are costing this country and taxpayers billions.’
The government made it known it is planning the freezing of 90% of benefits – which officials estimate would make savings of £7 billion in one year.
A spokesman said a switch to a link to ‘average pay’ since 2008/9 ‘would have saved £14 billion’.
Chancellor Osborne has told the House of Commons he wants a further £10 billion of welfare cuts on top of its current £18 billion cuts programme.
A right wing ‘think tank’ has estimated that had benefits been linked to earnings, not inflation, over the last few years, jobseeker’s allowance would currently be a weekly £66.81 rather than £71.
The inflation figures were released by the Office of National Statistics yesterday.
The annual rate of inflation in the UK, as measured by the Consumer Prices Index (CPI), was 2.5% in August down from 2.6% in July, according to the figures.
The Retail Prices Index (RPI) inflation measure, which includes housing costs, was 2.9%, down from 3.2% in July.
The ONS said smaller rises in the price of clothing had contributed to the fall in the rate of inflation, helping to offset bigger rises in the price of petrol and a rise in the cost of rail travel.
The ONS warned a number of factors are putting ‘upward pressure’ on prices.
‘Some of the utility companies are talking about price increases in the next few months, (while) there have been reports of poor harvests in many parts of the world, which could possibly have an impact on food prices,’ said ONS director Richard Campbell.
‘Finally, if the oil price continues to go up, we expect that to feed through to petrol and diesel prices.’