In the bad old Labour government days state welfare benefits and pensions were indexed in the following April according to the inflation rate in the previous September. One year, I forget which, the September inflation rate was so low that state pensioners received only a 75p increase. Even Labour was embarrassed, maybe more by the PR disaster than the plight of the pensioners, but, whatever the reason, Labour has promised that under them this should never happen again.
We Liberal Democrats promised in our election manifesto that such payments would be indexed according to a "triple lock" of wage inflation, price inflation,or 2.5%, whichever is the higher. To our joy this was accepted by the Tories and included in the Coalition Agreement. It was a bit of a let-down that the price inflation measure to be used was to be CPI rather than the normally higher RPI, but, even so, it wasn't a bad deal.
Even by this lower measure inflation last September was 5.2%. Pensioners and welfare recipients will still have to endure these increased costs for another six months before they get relief, but even so, it is something to look forward to.
Alas, George Osborne is alarmed and it is rumoured that instead of keeping to the agreement he is keen to adjust these payments to a six month average figure, which he hopes will be lower than the September figure
Well, our Liberal Democrat leaders have broken one promise and it could be years before we're allowed to forget it. Lets hope they have the guts to tough this one out. We must not connive with a government which seems totally incapable of tackling the bankers' bonuses and the near 50% rises of top CEOs, but as soon as those at the bottom of the pile strike it lucky, skim off their little bit of the cream.