RPI to CPI Early Day Motion 1032

Ripoff_2

Haybob wrote: »

I agree that we need a www.pensionernet.com it is very frustrating that there does not appear to be one focal point that we can all get behind. I can't see that waiting for a legal challenge is going to prevent this steal, it is only when they understand that thousands of affected people are angry and all have a vote that they may pause to listen. The Occupational Pensioners Alliance have sought a legal view http://www.opalliance.org.uk/ but we need a rallying point so that all affected can unite against this wrong.

Thanks for this, the OPA is headed by the same person as the NFOP, i.e. Roger Turner, thus using the two organisations together could be the answer for a unified stance?

MEY_3

I have written to both Mr. Ed Miliband and Steve Webb today and await their replies, on the issues. It will be interesting to learn of their responses, of Labour Party attitudes in the former and the Guardian Q and A session specifically in the latter case.

Prof_as_was

Where should we be headed, how best head there?

I’ve just been trying to get hold of a sense of direction (and clear my head) by going over the posts of the last few days, looking for commonalities. We do seem to be talking a bit about where we need to go now, and from here, and (in my personal reading and interpretation at least) talking about three or four broad strategies that we would like to see pursued. Each seems important, right, (and each has its own sub-branches and categories). I list them (I can be improved on, of course) as:


1) 1) Keep up the political pressure.
2) Pursue the idea of legal challenge

3) help bring together the relevant associations on to a common platform for pressing 1) and 2)
4) Create a more dedicated, focussed web meeting place



Not hard to agree. But there are associated uncertainties: about how best to move forward, by what means, who will/can do some of these things, with what resources of time and money, with who involved, etc. Again, agreed, I feel just those things.



But we must nevertheless try move on all these fronts if we can. This post is intended in that spirit. I, for one, want to submit some ideas for discussion in the hope that they can be built on. I intend a couple of posts, soon, each trying to speak separately to one or other of these associated but different agendas, and will reference this post as their context as about moving forward on one or other each of these four.



Anybody who finds themselves sympathetic to my drift is welcome to improve or extend my list of numbered strategies, and use them in reference to further discussion where it might help identify one of these lines of march.

Prof_as_was

With reference to my post 354, and its:1) Keep up the political pressure.


Again, respect and thanks to the work of Ripoff, initiator and sustainer of this now 18 page thread – and as near a patient moderator as it allows. Ripoff’s first and lasting aim has been political pressure through getting MPs to sign EDM 1032, (still the name of the thread!). Congratulations – at the time of writing, 102 signatures. That’s a lot, considering the following people in Parliament normally won't sign EDMs: Ministers and government whips, Parliamentary Private Secretaries, the Speaker and his deputies – and in this case lobby-fodder Government supporters. My MP (the latter) has firmly indicated to me that he doesn’t hold with EDMs, and is candidly clear that the only reason for the CPI change is deficit reduction, and it will be permanent for that reason, so there).
However, I, (and others, I detect) are thinking that the EDM campaign of itself, not to mention impressive right-wing press criticism of the proposal, and the powerful objective evidence and rationality that has built up on this blog, is not bothering Webb, Govt, or the Govt benches, and not going to anytime soon.
The EDM campaign must of course keep going. The next question is what else, to back it up, ramp up the political pressure? It follows that it will be through opposition MPs, Shadow ministers, uncomfortable L-Ds, and perhaps L-D shadow spokespeople such as they are.
Here’s a suggestion. Would campaigners here who live in the constituency of EDM signatories (there must be some)
(list at http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=42021 )
be able to press them (by letter, or better by making an appointment at a constituency surgery or at Parliament itself) by thanking them, and further enquiring something along the lines of
a) how Parliamentary opposition can be further activated or progressed,
b) how they personally can further help with that,
c) whether they will press their shadow spokespeople to take the issue up persistently and loudly as a major issue affecting millions of voters,
d) whether they will look at and mention our blog as a source of info and expertise
e) what else they might advise as a means of pursuing and intensifying political pressure
f) anything else like this you think of
g) what from their responses you may report to this blog, and what would they want kept confidential.

On this tack, I recall someone asking, ‘how many threatened voters? In terms of political pressure, important question. At the start of all this I saw a press reference to 8 mill, I quoted it when writing to my MP (and my L-D prospective, or whatever they are at this stage in the cycle). But we need something authoritative, broken into ‘in payment’, in subscription, public, private. Anybody got ideas of possible web sources for these numbers?

ordinaryman

Thank you Prof as Was for your suggestions as to how we can maintain the pressure on politicians, particularly Labour MPs, Shadow Ministers and 'uneasy' Lib Dems. I entirely concur with this. Congratulations also to Ripoff for his tireless pursuit of the Early Day Motion route. We must continue to write, email, publish, persuade and cajole people to wake up to the implications of what the Government is doing to Pensioners. Published letters in national newspapers are another possibility.

I have today sent an email to the Public Service Pensioners' Council (PSPC) following a conversation I had one of the officials there. In the email I have described the opinions expressed about CPI on this Forum and have sent examples of letters I have previously sent to Teachers' Pensions, Steve Webb, Ed Balls, Nick Clegg et al. My hope is that the PSPC which represents a large number of Professional Associations, in Education, the Civil Service, Police, Local Government etc. will reflect the opinions so many of us are now expressing and put their considerable weight behind the campaign to have this measure to reduce pensions reversed.
The contact email is [EMAIL="a.brown2@nut.org.uk"]a.brown2@nut.org.uk[/EMAIL]

The address of the PSPC is Hamilton House, Mabledon Place, London WC1H 9BD. Tel 02073804765 Fax 02073833454

Ripoff_2

The EMD total is still rising 104 MP's have now signed the motion. Many thanks for your persistance but we still need MORE. So please keep the word going on this and get any family and friends who may not yet found the time to email their MP's, to do so, especially Tory and LD ones.

They need to know this is a real isssue that will effect people lives forever, not just during the deficit reduction.


LAB = 84 LD = 4 CON = 0 Oth = 16

I see you are talking about the next steps and you are right to do so. Everyone needs to think of ways to get this into the Media, it needs a much higher profile.

The BBC have covered it several times but it's taken a back seat lately. There is enough information on this forum to put the case so you could write a letter to your local paper for them to explain to the general public what this change actually means, National newspapers have covered it but maybe a letter there may also raise it's profile again, the Sun, Mirror, Guardian etc.

In many ways it needs ALL to take seperate steps but in a unified way, by that I mean each of you write, each of you get the message out by any means you can but collectively, using this forum on how to coordinate that. Maybe each week/day you could have a combined letter write to say the BBC, then the Sun , then wherever. So today, say you all write to the BBC, put the case and arguments and depending how many people do that maybe they may get interested, there's Panarama, Rip-off Britain programme. Pen the same letter to the PSPC as advised by Ordinaryman. It's an idea, not the answer but what do you all think? will it work?

I am conscious of running out of time on this as the vote is in March and by the time any group or fighting fund is formed the argument may be lost, more action is needed now!

This could be People Power at it's best without having to take to the streets!

The "Prof as was" ideas are also sound so that is another way forward but what ever action is taken needs to be taken sooner rather than later.

Ripoff_2

John Ball, head of UK pensions at Towers Watson, said he expected FTSE 100 companies to gain an estimated £15bn.

"The government's policy change has transferred wealth from pension scheme members to sponsoring employers, who are busy quantifying these windfalls on their balance sheets. The impact depends on the scale of legacy pension promises, the scheme's rules and what its membership looks like. Some companies won't be affected at all, and we've seen those who estimate gains that range a few million pounds to the billions.

Full article at:
http://www.guardian.co.uk/business/2011/jan/24/company-pensions-index-linked

This is not just about Public Sector Pensions, this is also about the many Private Sector pensioners who will also be affected by this change and as you can see their money is not going to the public purse but to the employers and their shareholders!

BoxerfanUK

Well said Ripoff :T
Yes Bendix, message 358, don't let the green eyed monster cloud your judgement. :rotfl:

If you think this change is only going to affect public servants then you must be in cloud cuckoo land.

Prof_as_was

bendix wrote: »

It's lovely to see the public sector pension people whipping themselves into a frenzy of righteous indignation now that their special pension arrangements are being subject to public scrutiny.

I for one support the move and hope you lot fall flat on your faces.

The public sector has been gorging from the trough for far too long.

Tell us Bendix, because I'm really interested to know what drives and informs your point of view, (you're not alone in holding it), did you know, in coming to your opinion of me and my Public Sector Pension, that I paid for it by a substantial voluntary subscription, in my case divi'd up every month for forty years. I don't know what you mean by "special pension arrangements". You see, I always understood my pension as a prudent investment, started as a hard-up young man, Putting something by for my old age, so that I wouldn't be a burden to anyone, including the tax-payer (or the state, which ever). And so far, I'm not. The investment earnings that I now live off, ie my occupational pension, are not that great, (though they are enough to pay tax on, so I'm a contributing tax-payer too).

This has been explained often enough in this thread before, and you could look back for more detailed explanations of what I am telling you. I wonder if you mistakenly imagine that public sector pensions are some sort of DSS benefit or state hand-out, and that's the misunderstanding that is causing you such evident stress?

"Gorging at the trough" I simply don't recognise or understand as anything that describes my working or retired life. Are you sure you're not being a tad irrational? A bit OTT?

One thing that sometimes muddies the water, of course, is that the people who should have kept and looked after my monthly subscribed money in a forty year growth fund that would have paid my current pension twice over - didn't. Govt took it as annual revenue, and spent it annually on whatever they wanted. Govt's defence of that practice (myself, I'd call it malpractice) is that in some years the Treasury (tax-payers) showed a profit (over pension money paid out), and in some years a loss (swings and roundabouts). That began to look less defensible lately, what with longevity, and was addressed quite recently by renegotiation of terms with the unions involved, so that the accounts are once again predicted to pan out evenly over time. Personally I still think the idea of 'spend the Prof's investment money annually, it'll work out OK' is irresponsible, and has damaged both me and you Bendix (as a tax-payer, I'm assuming you are). Ceratinly any problems created by the practice are not my fault, any more than they are yours.

Try to think of us as all in it together.

MEY_3

Below I reproduce a copy of the e-mail that I sent to Steve Webb. I am publishing this on here because instead of someone actually responding to my points I received a form letter back from the DWP about state pensions, which was totally irrelevant to my letter. I have therefore re-submitted the e-mail requesting the courtesy of a reply addressing the points.

"Thank-you for your Q and A online session for The Guardian last Thursday. In some respects though I found it unenlightening. Below I reproduce the part devoted to the issue that concerns me and I would appreciate a fuller response on those points. Your comments are in navy italics, my response below.
Thanks for the new questions about CPI/RPI. There's a lot of technical detail on all of this, but here are the key points:
1. We've made two changes to the way pensions are uprated. The basic pension will go up in line with the highest of earnings, consumer prices or 2.5% - a "triple guarantee' to Britain's pensioners. Additional state pensions and public sector pensions will go up in line with the consumer prices index - the headline measure of inflation used in the UK. Taking account of both of these changes, we estimate that a typical person retiring this year with both basic and additional state pension entitlement will be around £10,000 better off over the course of their retirement
Not just public sector pensions are affected Mr. Webb. Any private pension scheme linked to the Principal Civil Service Pension Scheme 1974 will also be affected. This now includes schemes which are private but once fell within the terms of the Civil Service (e.g. BT). The Hutton Review doesn't include these in its terms of reference, so they are now in a no man's land because they are affected by government changes with no input into the outcome.
2. There are a number of reasons why the CPI is a more appropriate price index to use when preserving the real value of pensions in payment.
CPI is the Bank of England headline inflation measure and as the HICP was designed for making comparison with other European member states, not as a measure of personal inflation, as you are only too well aware.
a) the RPI includes mortgage interest, which is irrelevant to the vast majority of pensioners - just 7% of pensioners still have a mortgage. Changes in the RPI can be heavily influenced by changes in mortgage rates - as in September 2009 when the RPI went negative and as a result additional pensions were frozen in April 2010. The CPI was positive in the year to September 2009.
CPI doesn't not include for example:-

• Mortgage interest payments (possible)
• Council tax (definite)
• House depreciation (possible)
• Buildings insurance (Very likely)
• House purchase costs, e.g. (possible)
estate agent fees (possible)
• TV licence (definite for some)
• Road fund licence (quite probable)
The brackets are mine to illustrate the factors that can affect private and public pensioners and the likelihood of that in my estimation.

So it is disingenuous of you to pretend it is a more accurate measure, as your omissions confirm this not to be so. Its methodology may or may not be better suited but that is not the only factor to consider.
source: http://www.statistics.gov.uk/downloads/theme_economy/cpi-rpi-information-note.pdfso
b) CPI is the measure of inflation targeted by the Bank of England and is an internationally standard measure of inflation.
Utterly irrelevant for reasons given above. But to repeat, to damn the lie, CPI is NOT a measure of personal inflation. Surely you are not attempting to argue that pensions are not personal finances. The issue isn't about whether the CPI is an internationally recognised measure of inflation or not but about its suitability to measure national, personal, pensioner inflation. Why confuse the two?
c) when the RPI basket of goods is constructed, the spending patterns of the poorest pensioners are specifically excluded, whereas the CPI includes such households;
This is irrelevant. The highest earners and lowest (pensioners) are omitted, presumably to take out extremes and create an average. This doesn't have any bearing on the appropriateness to pensioners. It is not the spending patterns of individual groups that matter but what items are included in the final indexation. The items listed by bullet points above can be appropriate to pensioners and non-pensioners alike - but they are not included in CPI but are in RPI.
d) the way that the CPI assumes that households respond to price increases is different to the way it is done in the RPI; the IFS has praised the methodology used in the CPI saying that this was a 'sound rationale' for the switch to CPI;
This is a very misleading and incomplete quote, cherry picking the small bit that suits your argument and ignoring that which criticises it.
Quote:"Overall, then, we find that the move to CPI-uprating is not clearly justified by the coverage of the CPI being more appropriate for all benefit recipients, particularly for those of working age. Nor do our results suggest that the switch from RPI to CPI as part of the triple lock guarantee for the basic state pension was obviously justified on coverage grounds: whilst we find the majority of pensioners in receipt of other benefits are insulated from the costs excluded from the CPI, if we include state pension recipients as well, the proportion insulated falls to between 31.5 % and 32.2% of pensioner households, similar to the proportions the proportions insulated for working age households."
Source: http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/snbt-05434.pdf
Pretty similar I'd say, to your charge against Ms Angela Eagle (Wallasey) (Lab): Quote: - "It pains me to suggest that the hon. Lady is being selective in her use of statistics..."
Source: http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm100719/debtext/100719-0001.htm
It is important to add that with regard to company pensions, we propose *not* to over-ride scheme rules, and so where company pension schemes have specifically promised to pay RPI indexation, we will not be intervening to change this.
Again, irrelevant. Firstly your original intention was to propose to try to enforce or assist private schemes to make this change until having to reconsider for legal reasons. Hardly the same thing as not proposing it. Second, you must be well aware that many, older schemes especially, do not directly mention RPI but link to the public sector pensions legislation, thus disadvantaging some schemes against other private sector schemes
We acknowledge that the CPI is on average lower than the RPI. However, it is not the Government's role to choose the highest inflation measure available, but rather to choose the most appropriate measure. For the reasons given above, we believe that the CPI is the right measure to use.
Mr. Webb, it is widely acknowledged that no index completely accurately currently measures true personal inflation, and the very fact that the calculations use figures based on inflation September to September but paid in April (for public sector pensions) means it is always in arrears of true costs, therefore paying the higher measure would not at all be unreasonable, in reality. It is morally incumbent on the government to utilise the most appropriate (i.e. accurate) index however, which cannot be CPI as it currently stands.
Why did you leave answering the questions on this issue until last? Many questions were left on the Guardian site regarding this issue, and the total supporting it outnumbered most of, if not all, the other issues raised, making it the main topic put to you. To leave it until just before signing off could not have been to deliberately avoid the responses you would have received following your rather deceptive, and incomplete answers, surely? You were having to be cajoled by further questions when there was just five minutes left of your time, because you had ignored this tranche of questions. You didn't respond until last to a major area of questioning and so completely defeated the idea of a live session, as no one had time to refute any assertions you made, thus distorting the argument.
Here is a specific point you studiously avoided answering. Perhaps you would care to answer them now please.
CPI does not reflect pensioner inflation. Quote from the issues posed:
"This is what his department’s professionals said: (ONS) We continue to regard both the Consumer Prices Index (CPI) and the Retail Prices Index (RPI) as important measures of consumer price inflation. We believe that the CPI should become the primary measure of consumer price inflation but only when the inclusion in the index of owner-occupiers' housing costs has been achieved. We note that the ONS has an active research and development programme for the CPI and the RPI, and are preparing for wider user engagement on a forward work programme, starting this autumn."
You were also asked specifically when it was planned that the CPI was going to be altered to make it more reflective of pensioner inflation, as per the official advice given to your department in the ONS statement above. We are still awaiting your answer.
Quote: "19th August 2008 the then Shadow Chancellor George Osborne said “pensioner inflation is now considerably higher than CPI inflation because pensioners spend a much higher percentage of their income on high-inflation goods, like heating, light and food.” (from Conservative Party, ‘An Unfair Britain: Why Labour have failed on fairness’, 19th August 2008)."
Are you aware as to what has altered the position of Mr. Osborne?
Why do you not plan to suspend implementation of CPI until the effects have been fully evaluated, in line with the Early Day Motion 1032 request? Can you please provide the answer to this now? I'm anxious to discover whether you accept the principle of the ONS advice or if not, why not? I trust such a change to CPI is intended as I cannot believe you seriously consider introducing CPI until its very real weaknesses have been addressed.
Finally, purely as a matter of interest I would be most grateful if you could answer this last point for me. Are M.P.s pensions linked to RPI or CPI and if the former at what date will the government seek to voluntarily change to the "more appropriate CPI" (your words, not mine).