MPs agree on 5.2% benefits increase
MPs have officially agreed a 5.2% increase in benefits as part of a package of changes to pensions and social security benefits.
Pensions Minister Steve Webb said the Coalition would be spending an extra £6.6 billion in 2012/13 at a time when the country's finances where "under severe pressure" to "protect people against increases in prices".
But shadow work and pensions minister Stephen Timms claimed the Government had chosen to uprate benefits and pensions permanently in a way which "is usually going to be meaner than the method used before".
Speaking during a Commons debate to approve documents including the draft Social Security Benefits Up-rating Order, Pensions Act 2008 Amendment Order and the Guaranteed Minimum Pensions Increase Order, Mr Webb said: "This order gives real support to protect people against increases in prices. At a time when the nation's finances are under severe pressure, this Government will be spending an extra £6.6 billion in 2012-13 to ensure that people are protected against cost of living increases."
He added this would mean "£4.5 billion more on pensioners, over £1 billion more on disabled people and their carers and over £1 billion more on people who are unable to work through sickness or unemployment".
Mr Timms spoke about the uprating of "most" out of work benefits and the basic state pension in line with the Consumer Prices Index (CPI) rather than the Retail Prices Index (RPI).
He said: "The Minister has tried to paint this change as simply a sensible, bureaucratic change, not one that's ideologically motivated or one that represents a cut in the income of pensioners, but of course in reality that is not the case."
He added: "Let's be frank with people, the Government has chosen to uprate benefits and pensions permanently in a way which certainly in the case of benefits is usually going to be meaner than the method used before and in the case of pensions, this year and last year, is also meaner than the method used before and that's why last year, they over rode it and put the old method back in place."
He said: "They didn't in fact apply the triple lock last year. Under the triple lock, the basic state pension would have been updated by CPI which was a long way below the RPI, last year, so prudently I think the minister decided to over-rule his triple lock on its first outing and operate instead the old mechanism and uprated the basic state pension by the higher rate RPI instead.
"And of course in doing that he exposed to public view the weakness of his triple lock, he had to over-ride it in the first year when it was due to be applied."