RPI to CPI Early Day Motion 1032

Aberdeenangarse

Stop whinging!

ordinaryman

Thank you Ripoff for the timely reminder and the link to the article in the 'New Statesman'. I found this a very convincing piece underlining the fact that CPI, quite apart from being a device to reduce the liability of uprating Pensions, is also an unsuitable method for measuring Pensioner inflation.

Let us hope that this fact, along with many others, features prominently in the forthcoming Judicial Review.

Good to see that the RPI/CPI issue is increasingly being mentioned by Brendan Barber, Mark Serwotka, Mary Bousted and other Public Sector Union Leaders in their recent speeches as one of the conditions in the negotiations.

We also need to make much more of the fact that, whilst CPI is deemed to be the Bank of England's 'preferred measure of inflation' for the majority of us, Members of Parliament and the Bank of England's Monetary Policy Committee have pensions uprated by RPI ! So much for the 'we're all in this together' chorus! The e-petition is making progress but we still need many more signatures. so people GET SIGNING!

Gracchus_Babeuf

The problem with CPI is that is does not use a proper weighted average to calculate inflation; it used something called a 'geometric mean', which is always weighted towards the lower end of the range. This is why it is inadequate as a measure of cost of living. The best measure would be RPIX, which excludes the cost of mortgages (irrelevent for pensioners) but includes everything else.

MEY_3

Gracchus Babeuf - I agree wholeheartedly with your sentiments except your final sentence. The change is not irrelevant to pensioners in my estimation. Though the CPI-RPI issue may only affect 7% of pensioners now (Steve Webb's assessment), with people beginning mortgages later for economic reasons, or at least have them running longer, and splitting couples having to possibly take out mortgages later in life, it can in no way be assumed that the figure will remain static and is more likely to increase, I suspect, rather than reduce.
Any "solution" that didn't take account of that probability would still be unsatisfactory to me even though I am personally unaffected.

Ripoff_2

This article is worth a read. Keep up the good work on getting those signatures for the e-petition, nearly hit 60k at the last count.

http://www.telegraph.co.uk/finance/personalfinance/pensions/8805352/Teachers-to-be-7700-worse-after-inflation-switch.html

ordinaryman

The e-petition has now reached 60,000 signatures. But many more are needed so please pass the word on to all those people including pensioners who may not be aware of the issue or who have not yet signed. We need to keep up the momentum!

It looks as if the negotiations between the Coalition Government and the TUC and Unions are going nowhere over the issue of Pensions and that the Government are not listening to the concerns being raised. ( see BBC Report Wednesday on-line) If that is the case then we are going to have to shout more loudly and make the case even more emphatically so that they do take notice.

I would urge everyone affected by this to spread the word, mobilise others, write to MPs, Ministers, unions, newspapers, media et al to emphasise the injustice of the Government action over the move to CPI. We need to create nationwide opposition to this. If we simply roll over and accept it then mark my words, they will come after us again with actual cuts to our regular pensions.

This is an issue which we can, literally, not afford to ignore!

Ripoff_2

TOXIC INFLATION WREAKING HAVOC ON OLDER PEOPLE

Inflation at twenty year high but inflation faced by over 50s even worse

Older people are the worst hit victims of soaring inflation with people in their 50s being affected by higher levels of inflation than the country as a whole. RPI Annual retail price index (RPI) inflation was 5.6% in September, up from 5.2% in
August. Saga calculated that annual retail price index (RPI) for the over 50s inSeptember was as follows:

• 50-64: 6.6% (up from 5.8% in August)
• 65-74: 6.4% (up from 5.5% in August)
• 75 and over: 6.5% (up from 5.3% in August)

“Commenting on The Saga Price Indices, Dr Ros Altmann, Director General Saga said: “The Government is ignoring the impact of inflation on older people. “We are deeply concerned. Surging inflation and sinking savings income are damaging growth by hitting older generations who have cut their spending. “Anyone who has bought an annuity is seeing their buying power erode month after month while policy makers worry about borrowers and banks.
“This is not a recipe for economic recovery.”

Please Sign the e-petition if you have not already done so, and spread the word. [URL="mhtml:{6EF71D81-FCE8-447B-947D-380BDD9A9C3B}mid://00000056/!x-usc:http://epetitions.direct.gov.uk/petitions/1535"]http://epetitions.direct.gov.uk/petitions/1535[/URL]

viridens

For info:


Civil Service Pensioners' Alliance Newsletter‏

Number 76 21 October 2011


Dear Colleague

RPI/CPI SWITCH: JUDICIAL REVIEW

As previously advised, the judicial review hearing will take place on 25/27 October 2011. Our QCs have been well briefed and have been working in close co-operation with the QCs who are handling the similar challenge being mounted by the group led by the Public and Commercial Services Union. We have seen their skeleton arguments and we are confident that they will put forward a convincing case. We are unlikely to have the judgement for some time. We will let you know as soon as we have it.

PENSIONS UPRATING FOR 2012
The inflation figures for September 2011 showed that CPI inflation had risen by 5.2% and that RPI inflation had risen by 5.6%.
For the past 20 years the September figures have been used to determine the pension increase for the following April.
However, at a lobby briefing on 18 October, the Prime Minister’s official spokesman hinted that the usual annual increase in benefits and pensions may not be automatic, claiming that it was for the Chancellor to decide each year whether to continue to apply this procedure. The spokesman said:-
“The process on this is that the September figures are usually used for uprating benefits, but the final decision on that is something that happens in the autumn statement,” “It is standard procedure [to use the September figure], but it is also standard procedure that the decision is taken at the Pre-Budget Report, under the previous government, or in the autumn statement, under this government.”
The Coalition Agreement said:-
“The Government believes that people deserve dignity and respect in old age, and that they should be provided with the support they need. That means safeguarding key benefits and pensions, and taking action to make it easier for older people to work or volunteer. We will restore the earnings link for the basic state pension from April 2011, with a ‘triple guarantee’ that pensions are raised by the higher of earnings, prices or 2.5%.”
For the past year Ministers have been telling us that “the CPI better reflects the pensioner’s experience of inflation”
The relatively high CPI and RPI figures for September reflect the increase in the VAT rate to 20% and the much higher costs of food and fuel, all of which weigh particularly heavily upon pensioners. We will have to bear those increased costs until next April, before we receive any compensation. We have always accepted the September figures as a fair basis for inflation increases, because they balance out over time. If the forecast are to believed, the September figures for next year are likely to be about 2%. So, for both the Government and for pensioners, it is a case of swings and roundabouts.
Therefore, it would be grossly unfair if the Government were to hit us with the double whammy of a move to CPI and a move away from the September figures.
The TUC, individual Trade Unions, the National Pensioners Convention and various consumer groups have already expressed their concern about any possible move away from the September figures and have urged Ministers to make clear that they have no such intent.
We, too, will be voicing our own concerns to Ministers and we will be seeking appropriate assurances.
Members might wish to make similar representations to their own MPs.

Yours sincerely

John Amos

John Amos
Deputy General Secretary

Ripoff_2

Rally at the Royal Courts of Justice London on 25th October until 10:30am when the judges start sitting, to support the Judicial RPI Review. If you can be there then please attend to show support, but please spread the word.

JohnB47

I've seen this mentioned a couple of times recently.This is a quote from The Civil Service Pensioners Alliance website (http://www.cspa.co.uk/):

The inflation figures for September 2011 showed that CPI inflation had risen by 5.2% and that RPI inflation had risen by 5.6%.

For the past 20 years the September figures have been used to determine the pension increase for the following April.

However, at a lobby briefing on 18 October, the Prime Minister’s official spokesman hinted that the usual annual increase in benefits and pensions may not be automatic, claiming that it was for the Chancellor to decide each year whether to continue to apply this procedure. The spokesman said:-

"The process on this is that the September figures are usually used for uprating benefits, but the final decision on that is something that happens in the autumn statement,” “It is standard procedure [to use the September figure], but it is also standard procedure that the decision is taken at the Pre-Budget Report, under the previous government, or in the autumn statement, under this government."

They wouldn't, would they? When/how is the 'Autumn Statement' made?