Osborne looks to slash benefits bill

PaulW1965

George Osborne is looking at options to cut billions of pounds from next year’s benefits bill by scrapping inflation-linked rises, in a move that could trigger a fierce cabinet clash.
The chancellor is alarmed at the political and economic difficulties presented by the fact that benefits and pensions next year would rise by 5.2 per cent, in line with the bumper inflation figure for September, the base month for the calculation.

The FT has learnt that Mr Osborne has asked officials to provide models for a range of alternatives models, including raising benefits in line with average earnings growth of about 2.5 per cent or even freezing some payments altogether.
Iain Duncan Smith, work and pensions secretary, is said to be highly concerned about some of the proposals, especially if it appeared that the government were picking an arbitrary new model or unfairly hitting poor households.
Nick Clegg, deputy prime minister, is said to be monitoring the situation closely. The Liberal Democrats will oppose anything that suggests the coalition is unfairly passing the burden of deficit reduction on to struggling families.

Mr Duncan Smith is expected to lay an order in the Commonsin December setting out the benefits and pensions increases to apply from April and is braced for what could be tense negotiations with the Treasury.

The Institute for Fiscal Studies calculates that the 5.2 per cent September inflation figure – close to a 20-year high – added £1.8bn to the benefits bill compared with previous forecasts. Economists expect inflation to drop sharply in coming months.
The IFS said that freezing all benefits and pensions – a highly unlikely outcome – would save about £10bn, while linking the increase to wage rises would save £5bn. Moving to an average inflation figure – calculated over six months to September – might save about £1.4bn.

http://www.ft.com/cms/s/0/e6c1af4c-0569-11e1-a3d1-00144feabdc0.html#axzz1cd3Aq9Ah

grizzly1911

I accept that the benefits bill is too high, their are insufficient jobs and there are some perpetual claimants.

I accept that the bill needs to be reduced.

I just find it interesting that Inflation is OK as it reduces our debt fueled by QE1,2,??, devaluation and VAT increases and Jo Public just have to live with it.

On the other hand the consequence is that it hits the public purse that is shock horror. Simple answer just move the goal posts again.

There are far too many indices played off against each other. A single standard should be agreed and kept to.


If we are in the mire then all spending should be looked at each time - foreign aid? we need it ourselves by the look of it, Trident, Government itself and the 100+ ministerial posts. At least they saw the light on ID cards and NHS IT.

No doubt money would be found if intervention in Syria became a politicians desire.

Nice to know the news reporting is now focusing on those naughty Chinese who keep their exchange rate low. If we could we would be right there with them;)

Flight2quality

It does seem strange the benefits will go up by 5.2% when average wages are falling in real terms.

grizzly1911

Flight2quality wrote: »

It does seem strange the benefits will go up by 5.2% when average wages are falling in real terms.

Snakes and ladders.

It is also likely that for those on low incomes, benefits or earners the inflation rate is much higher, energy, food, fuel and is unavoidable.

The Government has contributed to the cause surprised:rotfl: that they didn't factor in the effect.

kabayiri

grizzly1911 wrote: »

...
The Government has contributed to the cause surprised:rotfl: that they didn't factor in the effect.

Hehe, yeah.

I mean this inflation rate sprang up on them didn't it?

It's not like they spend lots of time tracking and trying to monitor and predict inflation is it.

It sounds a bit like a news spin story for them to take corrective action because frankly, they foobar'd up.

TrixieB

OptionARMAGEDDON wrote: »

How long before specimens like this could have their benefits cut before actually losing some weight? I bet that sow could go a few months without food and still have a few flabby pounds!

Another low blow for an MSEr - Know for a fact that she's claiming benefit do you? You want to be careful, it's one thing saying this, it's another entirely to put someone's picture up like that

smartn

Can't get around the fact that for low income earners who have not seen pay rises of 5.2% or above this year benefit rises of 5.2% must seem grossly unfair. Benefits shouldn't be seen as a lifestyle choice and should have some degree of hardship associated with it otherwise why bother working for a living?

In this comment I exclude people who are unable to work due to a genuine disability etc as any civilised country should look after people in those situations.

abaxas

smartn wrote: »

In this comment I exclude people who are unable to work due to a genuine disability etc as any civilised country should look after people in those situations.

There is a huge difference between 'look after' and 'a nice shiney new car every 3 years'.

DaddyBear

They should get a benefits freeze, like the pay freeze I've had to put up with for the last 2 years.

smartn

abaxas wrote: »

There is a huge difference between 'look after' and 'a nice shiney new car every 3 years'.

Couldn't agree more. Never understood the concept of motability etc with brand new cars, would have thought a decent reliable second hand motor should do the job just as well. Not even sure why people should have the right to own a car in these circumstances, a right to be able to get from a to b for appointments etc absolutely, but not necessarily in there own new car!

OptionARMAGEDDON

Surely with levels of unemployment it would make more sense to pay for a disability transport scheme where people can book in advance for use of a free taxi service? Or, is this scheme purely about propping up a sector of british industry? Ford fiesta or Polo max. No need for 1 series or Audi top marques