Wednesday 19 October 2011


I'm at something of a loss to understand why the government is determined to use the Consumer Price Index (CPI), a measure of inflation that excludes housing costs, when determining how much prices for the fabled hard working British family are increasing. After all, along with food and heating, housing is one of the absolute must haves for all of us. However, the fact that it is generally lower than the Retail Price Index (RPI) may point us in the right direction.

And that is particularly important in the month of September, for it is that month's inflation figure that dictates the rise in pensions and in state benefits. And the CPI's 5.2% is decidedly more manageable for the government, than the RPI's 5.6%.

Even using the lower measure, the estimated cost of the increase is £1.2 billion: a large amount given the disastrous state of the British Exchequer.

As Gordon Brown found, when he palmed pensioners off with a 50p a week rise, it's not politic to give a derisory sum to the retired, especially when you've already nabbed between £50 and £100 a year from their meagre incomes to pay back the bankers' bail out. They could be said to have done their bit.

However, no such sympathy is widely felt for the unemployed, who are characterised as being work-shy, and the sick, who are characterised as shirkers hiding behind maladies imaginaires.

And so it is that it has been trailed widely that all benefits apart from retirement pensions, won't, this year, increase at the rate of inflation. 

Mostly people on benefits are the poorest in the country. Yes, there are exceptions,I know, but in reality relatively few, despite what the Sun and the Daily Mail would have us believe. Many are working in low paid jobs and have tax credits, many have been thrown out of work recently by government cuts and can find nothing else. And hard though it may be to believe, many of the people on Incapacity Benefit have  illnesses which lay them horribly low.

For people on these low incomes, whether they be waged or unwaged, times are very hard. The bulk of their income goes on food and heating, clothes and council tax water payments (in Scotland). So with food inflation at around 10% and fuel inflation even higher, their incomes are stretched to breaking point. Edwina Currie may have laughed at the notion that people in the UK were going hungry, but that only shows how completely out of touch she is (if a fling with John Major wasn't enough to indicate that already).

I realise that for civil servants on £20,000 who have not had a pay rise for the last couple of years, and won't for the next couple of years, it may be galling to see benefit claimants pick up a 5% rise. But none of them was too worried when inflation was 1% and they carried off pay rises of 4% and more. The thing is, you either set these benefits by the rate of inflation, or by the rate of wage increases. You can't pick and choose...well, not if you set out to play fair.

I hope that the government will give careful thought to how they proceed with this. You can only push people so far before they start to get really cross, and the current government seems determined to pick fights with everyone at the same time.


  1. tris

    'play fair' You are talking about the English Tory scum to whom lying cheating stealing is second nature(bit like the snp)

    the problem with you is you actually imagine the scum Torys consider the plight of the Unemployed when they see the Unemployed as Human rats which need to be eradicated.

    Edwina Currie only claim to fame is that she f~cked a prime minister and she never tires of telling the world of it(makes me puke to think about it)

  2. Try not to puke Niko.

    No. I don't think they do understand, Niko, because I don't think they can.

    None has ever been unemployed. It's something that doesn't happen to them no matter how useless and stupid they are: an alien concept.

    Even when they don't have a job, they are not actually unemployed. They just aren't earning anything. They are having another "gep yar"

    They can have no perception of what it is like to live in a dump, being cold, being hungry and being frightened.

    But, that's not the same thing as them sitting down and thinking about doing the right thing. The right thing isn't always the "moral" thing; sometimes it's just the "sensible" thing.

    You see, I think that despite the draconian punishments handed down to people who were involved in the second, or was it third, set of riots in the last year, I don't think for a minute that people won't do it again (witness current situation in London's Pater Noster Sq).

    If I were in that situation I probably would. And I'd do it around Olympic time.

  3. "'m at something of a loss to understand why the government is determined to use the Consumer Price Index (CPI), a measure of inflation that excludes housing costs, when determining how much prices for the fabled hard working British family are increasing."

    Its cheaper. When the coalition linked pensions to inflation, they deliberately used the CPI method, given that this is a poorer measure than RPI or RPIX.

    But specific to benefits et al, it is to reduce the costs.

    Strange economic strategy isn't it?

    1. Cut public spending when consumer confidence is low

    2. Tackle the subsequent demand crisis in the economy by printing electronic money

    3. Try to beat the subsequent inflation (caused by the printing of electronic money and low interest rates assoc with it) by ignoring it.

    4. Get around the rise in costs for unemployed on benefits by using a gerrymandered inflation measurement.

    Sound economics? No.

    Who voted for this coalition by the way? I certainly didn't, I didn't vote for Orange Book Liberals ... or the Cameron policies (which didn't feature in the manifesto by and large).

  4. That's the problem. I'm sure if they'd been up front about what they were going to do no one would have voted for them. Id not like to be English and sick in a few years, and that Ruth wants to do the same here... Over my dead body!!.

    The Liberals are no longer liberal, and the Conservatives seems to wish to NOT conserve anything.

    LOL. We've talked about this on your blog, Dean, and we are pretty much in agreement. If there is no Plan B there bloody well ought to be coz Plan A sure as hell isn't working, and probably won't in the current global situation.

    Something like it worked in Canada, but at a time when the USA was booming and buying loads of Canadian stuff. There was demand in the market. We have none. Our markets are all in recession.

    In the meantime all they are doing is ripping what little demand there is left out of the economy. No one has any money to spend and so no one is spending.

    I expect Gideon has never known anyone who didn't have money to spend and it's come as a bit of a shock that folk like that exist. But he's too proud to say... Ooooops. Plan B is.....

  5. Dean: Jeezo.

    Has all this hanging about SNP websites made you realise how crap the Torys are....?

  6. tris

    I'm the partner of someone on IB, so I know the fights they are going through with Atos etc


    I'm also a Civil Servant

    4% pay rise? Bollocks

    For years we had "Public sector has to show the way and have pay restraint" when getting a nice deal much less than inflation

    Or the year we were told we were getting 3%

    Except what happened was the minimum wage, the rise went to the folk at under minimum wage, I got half of f all, but we were told, the total wage bill went up by that amount

    We're also getting our fair share of demonisation.

    Even if my partner gets ESA, that will end after a year, and they won't get JSA

    So don't add to the lazy categorisation of Civil Servants, huh?

  7. I think rational argument is winning our Dean from the dark side, Conan.

  8. Anon,

    How long are you talking about, there?

    I took my information from the Guardian's article based on research by the Hay Group.

    In particular I'd draw your attention to...:

    "Back at the "operative level", which includes roles such as receptionist and accounting clerk, pay for those in the public sector has risen 50% over 10 years, with staff now earning £695 more per year on average than those in private firms. In the private sector, the equivalent rise has been 37%, with salaries remaining unchanged or falling since 2009 as firms felt the effects of the 2008-09 recession.

    Operative staff in the public sector now earn £18,027 on average, compared with £12,035 in 2000. Private sector equivalent wages average £17,332, from £12,652 in 2000."

    ...from the article.

    It does go on to say that the balance will be reversed over the next few years because of enforced pay restraint on public service staff (although, at least in Scotland that is only those over £18,000).

    I agree that these are aggregated figures and don't necessarily reflect the pay increases received across the board. The higher you are, it seems, the less well you've done in the public sector, compared with the exact opposite in the private sector where the only people who have done really well are the senior management.

    I'm not quite sure what you mean by your last sentence. I didn't feel that my research was by any manor deep and exhaustive, but it wasn't entirely lazy either. The Guardian is unlikely to print that kind of article without it being reasonably accurate (based as it is on information from employment consultants, and of course based on the fact that it is the staple of public sector employees. I grant you that not all public sector employees are civil servants). Your sentence could also have been read as meaning that I was categorizing civil servants as lazy. And clearly, I didn't.)

  9. They do say that God loves a sinner, so the more I sin the more He loves me ... or is that self serving logic? :P

  10. Erm... the second option there Dean, I fear. But I expect he'll love you anyway.


  11. Tris

    Are those the figures that include the banks as Public Sector because they were bailed out by the taxpayer?

    Because the banks skew the figures and no mistake

    From the PCS website

    Almost half (48%) of civil servants are in admin grades where the average (median) pay in 2009 was £17,120 for women and £17,600 for men.

    Average civil service pay is £22,850 a year, compared to £24,970 in the private sector.

    35,000 (7%) civil servants are paid less than £15,000 a year.

    40.5% of civil servants - 210,000 people - are paid £20,000 or less. And 63% of civil servants - 330,000 staff - earn less than £25,000 a year.

    You talk about a pay freeze since 2009, same for us.

    Civil Servantare castigated for pensions, allegedly higher thn average wages.

    You Wer going down that road, suggesting we have been gaining higher than inflation pay rises.

    As I told you, the employers have been pulling a fast one with total wage bill, which sees the employer fulfilling their statutory obligation at the lowest end, whith the other grades get hee haw.

    Sorry,getting a one off lump sum instead of a pay rise leaves you at the same pay as you had the year before. There are many such tricks and dodges pulled on us over the years.

    On a personal Norte. My partner is on IB. Soon enough she will get called in for ESA. Even if she gets it, after a year it will run out, and there I am, Civil Servant, carer and sole support, earning less than in Private industry

  12. I apologise if I misled.

    I'm surprised that they have included these people are they are not civil servants, or public sector workers. They don't have civil service conditions; final salary pension at 60. They work for us in that the government has bough a vast number of shared in their companies, dependent upon which bank. These are supposed to be sold on when, if ever, they start making a profit.

    Clearly Mr Osborne isn't in too much of a hurry to push them into anything, as they fund the Tory party.

    However, I will bow to your greater knowledge. As far as I know the top people in the banks did very well, unlike the top civil servants who appear to be paid much worse than the people in the private sector.

    The cashiers on the counters earn paltry amounts and will still get their pay rises.

    Like other civil servants at that rate. At least in Scotland.

    I'm sorry things are so bad for you.

    There are of course, people on IB who have no such support. No salary at all coming in, and no one to look after them. God knows what will happen to them. Perhaps God will care. Clearly the government does not.

    The trouble with a government of millionaires is that they never have to stop and think...what if that were to happen to me, or us.

    It never will.

  13. No, in Scotland Civil Servants are under a pay freeze.

    My partner had their IB taken away last year, and was refused ESA

    However the appeal was won for IB

    both have points system, but there are half as many points available in the ESA system compared to IB, first reason it s harder to get ESA

    Secondly, having been present at two Atos Assessments, the software led sessions produced documents that bore no relation to what had occurred in the session.

    So we've had to endure months of one income, it's not fun and relatively we're poorer now than we were then.

    HOWEVER, my point is that the either or s a false choice.

    The country is still wealthy and has potential for growth.

    But the Coalition sees Austerity as a weapon, one to force compliance in thoor and those afraid of being poor.

    Making the sick, the unemployed and public sector hate figures is part of the strategy

    Christ I sound like a paranoid, but you see what's happening in the States, it's coming here

  14. Yes Anon.

    I know a bit about the assessments too. The "health professional" because they don't always use doctors... (you have to ask what kind of doctor wants to sit reading out questions off a computer screen, without showing any medical interest) have to draw conclusions for what the client says.

    So for example, if they ask about your family contacts and you say that you see your granny once a week, they can conclude that you have a stable family life and good support system. Not that you feel sorry for your granny and drag yourself to see her with her shopping.

    If they ask how you got to the venue of the interview and you reply that you came on your own, on the bus, they can conclude that you are confident to make journeys alone, not that you have no one to bring you and are too poor to afford a taxi and too scared not to come.

    It is an outrage.

    And if the people who were suffering it hadn't been made out by successive governments, starting with Peter Lilly's "little bloody list", to be a set of scrounging bast**dsw, then the public would be outraged. But the Sun and the Daily Mail are happy to do the government's work for them.

    Yes there are cheats. So, find the cheats, don't become cheats yourselves to get the bills down.

    People have died because of Atos's badness.

    And no one in government cares. If I were IDS I'd be suicidal.

    BTW, The worst paid civil servants in Scotland are getting pay rises. (Under £18,000, I think).