RPI to CPI Early Day Motion 1032

Mr_Moonraker

In November 2010 I asked the House of Commons Information Office the following question ‘ if a MP retired in 2008 how will his/her pension be protected against inflation e.g. will it be increased in line with RPI. ‘

I received the following response : -

‘with respect to your specific enquiry, once in payment, MPs’ pension benefits are increased in line with the increase in the Retail Prices Index (RPI) in the twelve months to the preceding 30 September.’

I also wrote to my MP asking if her pension referenced RPI, she did not reply, my sister wrote (twice) to her MP (Steve Webb) asking :-
Why are retired MP’s still getting increases in line with RPI while other retired public sector workers getting increases in line with CPI ?

Is any of his MP’s pension, including any frozen accrued pension, still linked to RPI ?
He did not reply.

KMK

I am really interested in the last posts re MPs' index linked pensions.When I contacted my MP last year to protest about CPI being applied to our pensions, I got a reply several weeks later, full of sanctimonious claptrap about public pensions being unaffordable etc and thus the need for a change to CPI. I assumed that as they work in the public domain, then their pensions too would be linked to CPI from April 2011. After all we are "all in it together"

The secrecy you describe about their actual index linking sounds very dodgy to me. After all the deception surrounding the expenses scandal, I suspect that they may be trying to hide the fact that they have held on to RPI in the hope that we would not notice!!!

I have now contacted my MP yet again to ask him directly whether MPs' pensions are still linked to RPI. Might get a reply by Christmas!

ordinaryman

In reply to Ripoff et al,

It seems quite clear that MPs Pension increases are still indexed to RPI as is the case for the Bank of England and its Monetary Policy Committee. We need to capitalise on this by exposing the hypocrisy of the Coalition in keeping for themselves what they and the Treasury are telling everyone else is now an inappropriate index ( RPI) whilst they legislate for a lower index for the rest of us (CPI).

This has got to be an achilles heel if ever there was one! A Freedom of Information request needs to be made over this issue so that the Government is forced to explain or justify it. The Public Sector Unions and the lawyers acting for them in the (now postponed) Judicial Review process should also be made aware of this in preparation for their submissions to the Review. How could they defend such an injustice?

On a slightly different but related angle, I have the distinct feeling that the Government are becoming desperate. Frances Maude looks to be under an enormous amount of pressure pursuing very difficult negotiations with the Unions unable to concede anything to them for fear of another U-turn. Imagine a scenario where he has summoned Danny Alexander, whom I believe to be the author of the policy on indexation, to a meeting. Alexander has been told to 'bloody well get out there and convince the country of your bloody policy, I've had enough of this!' The hapless Alexander makes a reasonable fist of it to the Daily Telegraph but, of course, antagonises the Unions who believe that the whole basis for negotiations has been scuppered.
........ Thought I might just give my theory a bit of an airing in this post. Hope no one objects too much!

Haybob

It is a difficult and interesting situation. I believe that most of the unions have been in previous negotiations about pensions and have accepted that changes (negotiated) are necessary and indeed require new entrants to Local Government and NHS schemes (and maybe others) to retire at 65 rather than 60, together with other changes agreed with the respective trade unions. However a particular principle has been to respect and honour any accrued rights and this is where this coalition government have already failed. Where were the negotiations with the unions regarding the RPI/CPI change? It was done by sleight of hand and when pressed the coalition have clearly stated “it’s not up for any negotiation” and that is why we are where we are at present with the future legal challenges. This change was enacted following assurances that no changes whatsoever would be made to any pensions’ accrued rights were given by the parties prior to the election. However the RPI/CPI change was one of the first made by this government after the election with NO consultation. Therefore any present negotiations are going to be very messy and when the 11 million or so old age pensioners get their CPI rise next year instead of the RPI (unless the legal challenge is successful) it will be plain that all these pension changes have been very badly thought through.

JohnB47

"The Public Sector Unions and the lawyers acting for them in the (now postponed) Judicial Review process....."

I hadn't heard that it has been postponed. Can anyone expand on that please?

Ripoff_2

JohnB47 wrote: »

"The Public Sector Unions and the lawyers acting for them in the (now postponed) Judicial Review process....."

I hadn't heard that it has been postponed. Can anyone expand on that please?

The review has been delayed due to the Treasury Solicitor requesting more time and thus has been put back till late Sept, early October by the court when the review should take place.

My opinion is that this will help Government and as the 2012 uprating figure is based on the September inflation then this gives Government time to "fiddle the figures" so RPI and CPI look about the same hence they will argue that there is little difference, "so what is all the fuss about" but of course later on the gap will widen again. Being cynical of course here but do you trust this Government?

Ripoff_2

Although the government claims CPI is its, “preferred” measure of inflation, it continues to support the use of RPI by regulators determining price rises and for a number of other purposes. I thought many of you may wish to view exactly what is being increased by RPI while your pension is being increased by the lesser CPI, view the link below.

http://glcoord.org/index.php/cpirpi-technicalities/62-cpirpi/284-government-supported-use-of-rpi

Mr_Moonraker

Ripoff wrote: »

My opinion is that this will help Government and as the 2012 uprating figure is based on the September inflation then this gives Government time to "fiddle the figures" so RPI and CPI look about the same hence they will argue that there is little difference, "so what is all the fuss about" but of course later on the gap will widen again. Being cynical of course here but do you trust this Government?

This has already started, the freezing of Council Tax for 1-2 years was done primarily to reduce the differential between RPI and CPI. They obviously got the full support from the electorate for this move.

It’s a similar case with the triple guarantee on State Pensions, the Coalition knows wages will not increase above inflation for the foreseeable future so the change is effectively moving State Pension increases from RPI to CPI. After the next election, if the Tories win then they will simply link State Pensions back to inflation (thic time using CPI) as the did under Thatcher in the 1980s.

teacher_retired

The recent intervention by d Alexander has been made to scupper current negotiations.
It was interesting to see the recent newsnight interview when the minister refused to answer direct questions saying all points should be raised in these negotiations. Yet as was pointed out they are refusing to negotiate.
For example at the last actuarial review some three years ago the teachers pension was fully funded. This three year review is now long overdue yet the government are stalling on producing these figures.
The unions are ready to receive these figures and to negotiate how any shortfall, if any, can be met.
It is becoming obvious by the day that the government want this conflict.
I wonder if they see it as a re-run of the miner's strike with their ultimate victory assured.
They may be in for a surprise.
I suspect they will bring in the proposed 40% rule for strike ballots.
I think we would in that event see a much larger turnout in members voting.
They may be surprised by what happens next!

grizzly1911

Mr_Moonraker wrote: »

It’s a similar case with the triple guarantee on State Pensions, the Coalition knows wages will not increase above inflation for the foreseeable future so the change is effectively moving State Pension increases from RPI to CPI. After the next election, if the Tories win then they will simply link State Pensions back to inflation (thic time using CPI) as the did under Thatcher in the 1980s.

I thought I was cynical;)