Benefit Claimants To Lose Nearly £1bn As 'Historic Link To Inflation Broken'


Huffington Post UK First Posted: 18/11/11 09:53 GMT Updated: 18/11/11 10:02 GMT
React

Millions of unemployed and disabled people are to lose nearly £1bn in benefits next year after the government decided not to raise welfare payments in line with inflation, it has been reported.

Nearly six million people will be affected by the changes - despite Vince Cable signalling on Sunday the move would not happen.

"We believe the most vulnerable people in society should be protected in these very difficult conditions," he told BBC One's The Politics Show.

But a report in the Times on Friday said ministers, including Work and Pensions Secretary Iain Duncan Smith, had agreed that 5.7 million people claiming benefits would lose hundreds of pounds a year. The savings, of around £1bn, would possibly go towards the government's proposal to scrap a 3p per litre rise in petrol prices.

Inflation soared to over 5% in September – the month where the CPI rate is used to calculate increases in benefits.

The increase would have cost the government up to £1.8bn – leading to the government's decision to break the link between inflation and rises for those on disability and unemployment benefits. But the move is not expected to hit those receiving pensions.

Benefit Claimants To Lose Nearly £1bn As 'Historic Link To Inflation Broken'