RPI to CPI Early Day Motion 1032

JamesU

viridens wrote: »

In case of problems, The appropriate section says "Your pension will be increased to take account of increases in the cost of living and is fully index-linked in line with the Retail Price Index (RPI) on the same basis as state pensions..."

And as bolded above, if it is decided that CPI is to be used as the measure of inflation for state pensions instead, then that is also the measure used on your pension. The paperwork looks crystal clear to me, CPI from now on. Hence previous discussion, starting with post #1, where the argument is really about whether or not CPI is an adequate measure of inflation for indexation and revaluation purposes (e.g. see #19 and various other posts from then onwards).

JamesU

Haybob

Clearly the Government can do this but have we all been mis-sold our pensions? Pension booklets etc. may all quote the RPI but the trustees say that was because the only index of inflation when they were prepared was the RPI and it is what was written in the original deeds that applies.. I do not know if this is correct or not. It seems to me a bit like agreeing to buy a Black Ford car when they only made Black (although their literature just quoted a car) but receiving a White car on delivery because they had started producing White cars as well. If you were led to believe the car was to be Black and you paid for a Black Car on that expectation and understanding then in my view they should deliver a Black Car. However, that is my moral assumption whether it is legal or not I do not know. Perhaps as well as writing to MPs many of which are just not for turning, we should be lobbying all relevant Trade Unions as well; after all they are supposed to defend our terms and conditions.

I consider that Frank Field sums it up very well in the attached link.

http://www.frankfield.co.uk/media/articles/q/date/2010/12/13/no-challenge-to-thatcherite-reforms/

teacher_retired

Haybob wrote: »

Clearly the Government can do this but have we all been mis-sold our pensions? Pension booklets etc. may all quote the RPI but the trustees say that was because the only index of inflation when they were prepared was the RPI and it is what was written in the original deeds that applies.. I do not know if this is correct or not. It seems to me a bit like agreeing to buy a Black Ford car when they only made Black (although their literature just quoted a car) but receiving a White car on delivery because they had started producing White cars as well. If you were led to believe the car was to be Black and you paid for a Black Car on that expectation and understanding then in my view they should deliver a Black Car. However, that is my moral assumption whether it is legal or not I do not know. Perhaps as well as writing to MPs many of which are just not for turning, we should be lobbying all relevant Trade Unions as well; after all they are supposed to defend our terms and conditions.

I consider that Frank Field sums it up very well in the attached link.

http://www.frankfield.co.uk/media/articles/q/date/2010/12/13/no-challenge-to-thatcherite-reforms/

You make a fair point and this is a good link. I know unions are working on the legal issues and coordinating action.
However it is important to understand the background to EDM 1032 and the current governments line. In an article in yesterdays daily mail the government source said it wants private providers to take over from the state in areas of the public sector. Pensions are protected in such transfers by 'fair deal' rules agreed in late 1990's but 'government sources said ... it would not require legislation to tear them up'. Should this happen pensions for those affected would be reduced by over 50%
This is the background of EDM1032. The government do not seem to want to talk. They seem intent on dictatorial changes to the whole public sector and with great sadness I see much conflict ahead
That is why I suspect EDM1032 holds the way ahead for I think a modified cpi will be the only thing the government will consider - eventually. But I suspect it will take a great deal of action before they do.

JamesU

Haybob wrote: »

Clearly the Government can do this but have we all been mis-selled our pensions? Pension booklets etc. may all quote the RPI but the trustees say that was because the only index of inflation when they were prepared was the RPI and it is what was written in the original deeds that applies.. .......However, that is my moral assumption whether it is legal or not I do not know. Perhaps as well as writing to MPs many of which are just not for turning, we should be lobbying all relevant Trade Unions as well; after all they are supposed to defend our terms and conditions.

The pensions have not been miss-sold. RPI was the known and applied measure of inflation for years and hence used. The Government believes CPI is now more appropriate. Only real issue I can see here is that CPI may not actually be an adequate measure of inflation for indexation (pensions being drawn) and revaluation (pensions not yet taken). Hence the EDM1032 which may be effective if enough MPs are canvassed, understand the real implications of a switch to CPI, and support the EDM motion.

People can argue until the cows come home personally, or through legal representation, based on wording, scheme rules, trustee deeds etc. Ultimately I feel the message that is not getting across or argued sufficiently is the real impact on pensioners irrespective of whether it is in relation to public or private sector pensions, or indeed state pensions come to that. Without sufficient clarity on the real impact of a switch from RPI to CPI on pensions, it is more difficult to argue constructively to MPs and also improve public awareness and opinion on the issue.

If a constituency member were to see an MP and was able to say “instead of my current £100 pension/week because of the switch from RPI to CPI, I will receive £75” in today’s terms (see my previous posts on thread for examples), I think the message would be clear and unequivocal and easy to argue. Unfortunately outside of a forum such as this, a lot of people cannot easily quantify the impact and hence cannot argue the case easily.

The unions should set up an online calculator using factors that ONS or the Royal Statistical Society agree with (e.g. 0.7 – 0.85% difference between RPI and CPI, average inflation rate of X%) so that everybody can see the impact on their individual pensions and print it out. Should be general so that it can be used by public and private sector employees alike. Millions of printouts of individual future losses sent to MPs with a simple request: do you agree with these calculations and their inpact on my current or future pension provision etc etc? That could provide clarity on impacts, raise awareness, and may also provide a wake up call for MPs.

Saturday morning ponder….:D

JamesU

BoxerfanUK

JamesU wrote: »

The unions should set up an online calculator using factors that ONS or the Royal Statistical Society agree with (e.g. 0.7 – 0.85% difference between RPI and CPI, average inflation rate of X%) so that everybody can see the impact on their individual pensions and print it out. Should be general so that it can be used by public and private sector employees alike. Millions of printouts of individual future losses sent to MPs with a simple request: do you agree with these calculations and their inpact on my current or future pension provision etc etc? That could provide clarity on impacts, raise awareness, and may also provide a wake up call for MPs.

Saturday morning ponder….:D

JamesU

What a good idea James :T Who can do it??

Prof_as_was

JamesU wrote: »

Importantly, I would also like to know when the EDM1032 is likely to be discussed in Parliament and how much time remains to further canvass MPs. Does anybody know?JamesU

Perhaps it would help if it were better understood that EDMs hardly ever ever become the subject of Parliamentary discussion, and why 1032 certainly won't. EDMs' only Parliamentary purpose (as opposed to the sort of good fuss-making use that 1032 has been puty to for our grievance campaigning) is to get a feel for backbench opinion (or emotions, alas) on certain issues, and only backbenchers (ie roughly half of all MPs) are normally involved in signing them. Only when backbench opinion threatens the Government's majority does Govt find it worthwhile paying serious attention. Backbenchers rarely use EDM as an approach to bringing down the Govt. That usually takes the form of a no confidence motion that they feel has a chance of winning through Govt defections. Rarely, EDM discussion occurs when Govt wants an issue discussed, and finds it procedurally convenient to pick up a referent and sympathetic EDM where there is one - not one they don't like! Some MPs (usually those who would like archaic Parliamentary procedure radically purged) themselves won't sign EDMs on principle because they perceive them as silly, an empty cost-free gesture to constituents, and they are not altogether wrong. 1032 had around 100 Labour Party signatures, and less than half-a-dozen L-Ds. That was useful to our campaign, never an engine that would have prevented the change to CPI. Only half-a-dozen Labour MPs appeared in the Chamber for the debate itself, (quite normal for this sort of business, with good reason) and only 19 answered the Division Bell. This last is also perhaps a more complex issue than appearsto our indignant first sight.

In thinking and wondering about what might be done about the CPI/RPI issue in Parliament, on Feb 17 last when it was settled for 2011-12, or on future occasions, it may be helpful and economical (certainly practical) to bear in mind that the RPI change was a clearly announced Budgetary policy (now brought in to force) of a Government with a strong working majority. The opposition, or any House of Commons process, was and is not able to reverse it. For better or for worse in our funny old constitutional monarchy, that's a consequence of the last General Election.

The options for political (as opposed to legal) reversal are these. Either the Government falls because it loses its majority, ie the support of enough of the considerable number of whipped and office-holding MPs presently suppporting, it on a confidence issue (and that won't be pension upgrading), and is replaced without a General Election (its possible) by a Government minded to reverse it at the next opportunity (a February); or parties minded to reverse it are brought to power in a General Election; or the present Govt is persuaded to change its position for February 2012 and the 2012-13 Budget.

Ripoff_2

All, EDM 1032 is still valid are far as I can tell and will be used on the 1st March by the various lobby groups, but remember there is no commitment to debate the EDM in Parliament. It is a tool to get the message across to Government, not the best tool I admit but as I have said many times it keeps this subject right at the front of the political agenda and gives something to rally around.

There are many issues regarding this change least of all the validity of using a measure that does not do what the Government says it does...i.e. A better measure of pensioner inflation. All indications being that it falls well short of doing that.

If RPI had been replaced for a different measure then that would have been different and a different argument but RPI is still available to be used and thus just saying you are going to switch to a lesser measure is the real problem. No debate, no impact analysis, no consideration for professional opinions, and total dis-regard of public opinion.

I don't even mind them looking at the whole indexing of inflation and coming up with the most accurate measure as possible but I do mind when the Government just switches the inflation index to a lesser index just because it can, and then try and convince people it is a better measure, when it is quite clear that it isn't.

The inflation measure should be the correct measure and not one that includes ommisions and discrepancies, RPI is the true UK inflation measure and has been for 38 years and if it was felt that RPI was not giving the correct inflation rate, then RPI should have been looked at, not a complete switch to an entirely different measure that was only designed for macro economics between countries. CPI is not and never will be the correct measure of UK domestic inflation in it's present form, it's a flawed measure set for measuring pensioner inflation and should not be used for pension indexing. This is the real issue and what the EDM is trying to highlight.

Ripoff_2

JamesU wrote: »

The pensions have not been miss-sold. RPI was the known and applied measure of inflation for years and hence used. The Government believes CPI is now more appropriate. Only real issue I can see here is that CPI may not actually be an adequate measure of inflation for indexation (pensions being drawn) and revaluation (pensions not yet taken). Hence the EDM1032 which may be effective if enough MPs are canvassed, understand the real implications of a switch to CPI, and support the EDM motion.

People can argue until the cows come home personally, or through legal representation, based on wording, scheme rules, trustee deeds etc. Ultimately I feel the message that is not getting across or argued sufficiently is the real impact on pensioners irrespective of whether it is in relation to public or private sector pensions, or indeed state pensions come to that. Without sufficient clarity on the real impact of a switch from RPI to CPI on pensions, it is more difficult to argue constructively to MPs and also improve public awareness and opinion on the issue.

If a constituency member were to see an MP and was able to say “instead of my current £100 pension/week because of the switch from RPI to CPI, I will receive £75” in today’s terms (see my previous posts on thread for examples), I think the message would be clear and unequivocal and easy to argue. Unfortunately outside of a forum such as this, a lot of people cannot easily quantify the impact and hence cannot argue the case easily.

The unions should set up an online calculator using factors that ONS or the Royal Statistical Society agree with (e.g. 0.7 – 0.85% difference between RPI and CPI, average inflation rate of X%) so that everybody can see the impact on their individual pensions and print it out. Should be general so that it can be used by public and private sector employees alike. Millions of printouts of individual future losses sent to MPs with a simple request: do you agree with these calculations and their inpact on my current or future pension provision etc etc? That could provide clarity on impacts, raise awareness, and may also provide a wake up call for MPs.

Saturday morning ponder….:D

JamesU

JamesU I have already made available such a calculator downloadable at http://home.btconnect.com/AP_Publications/effectscalc/ feel free to use it. You can set inflation, your pension, etc to give you an idea of what this change will mean. It is set at the moment to 0.75% variance and 3% inflation as this is the best known loss that will occur. If inflation or the variance widens then the loss is greater. I agree with your comments, the message needs to be driven home to every MP and we need to keep driving it home, month after month until the message gets through.

Ripoff_2

BoxerfanUK wrote: »

What a good idea James :T Who can do it??

Already available SEE Post 709

http://home.btconnect.com/AP_Publications/effectscalc/ download calc from here.

viridens

Also pondering..

Pension rules also clearly state that the purpose of index linking to RPI is "to maintain the spending power of your pension". Surely the nub of our argument is that this will no longer be the case if CPI is used?

Also, CPI was introduced as an inflation target figure for the Bank of England. It was never intended for this new purpose.

Quote:


Originally Posted by viridens
In case of problems, The appropriate section says "Your pension will be increased to take account of increases in the cost of living and is fully index-linked in line with the Retail Price Index (RPI) on the same basis as state pensions..."

And as bolded above, if it is decided that CPI is to be used as the measure of inflation for state pensions instead, then that is also the measure used on your pension. The paperwork looks crystal clear to me, CPI from now on. Hence previous discussion, starting with post #1, where the argument is really about whether or not CPI is an adequate measure of inflation for indexation and revaluation purposes (e.g. see #19 and various other posts from then onwards).

JamesU

Following on from your bolding, state pensioners are receiving the 'triple lock' guarantee this year, and the link to earnings has been restored. My pension increase is certainly not in line with, or on the same basis as that.

On that note, here is a paragraph from a reply from my MP:
"In addition, the restoration of the earnings link to the state pension and the triple guarantee will help to offset any reduction in occupational pensions".
Cheeky ***. I do intend to challenge him on that statement...