Nicola Smith
As well as including a large number of cuts in benefit entitlements (for example for the poorest mothers and for disabled people) the Budget announced changes in the mechanism for benefit uprating. A quick analysis, using the CPI and RPI forecasts provided by the Office for Budget Responsibility, shows that as a result of the move to CPI for calculating benefit rises, the values of all state benefits – and pensions – are being cut.
As a result, for example, of the Budget’s decisions, the value of Carers Allowance and Jobseeker’s Allowance will be 4 and 3 per cent less respectively in 2015 than had the RPI indexing remained in place (£135.20 and £132.60 less annually respectively).
Note: this post was updated on 29th July 2010 to take account of figures released by Steve Webb MP in response to a parliamentary question from Yvette Cooper MP.
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