Inflation drops but the unemployed are still getting poorer

Tue, 14/10/2014 - 13:13 -- nick

Inflation has fallen to 1.2%, its lowest level in five years.

But it shows how impoverishing the government's restrictions on benefit rises has been that this still means unemployed people and other claimants are getting poorer.

The Tory-led coalition capped annual increases in welfare at 1% from 2013, and inflation has been above this level since then.

This means anyone on benefits has lost a significant part of their income as their cost of living increases, even without taking into account all the other reductions and caps the coalition has introduced in their war on the poor.

There is no escape for those in work either, despite work and pensions secretary Iain Duncan Smith claiming he wants to 'make work pay'.

His party announced at their 2014 conference that they will cap in-work benefits next, even as they trailed tax cuts for richer people.

There was better news when the prices that make up inflation were revealed.

The fall in the overall rate was led by a drop in the costs of energy and food, two things that almost all claimants have no choice but to buy.

At other times luxury goods have led rises and falls, and this is why we oppose its use for working out the level of benefits.

At UnemployedNet we have campaigned for the introduction of a new measure to be used to uprate welfare, the Benefits Price Index or BPI.

This recognises the needs of those who receive these payments, and the limited range of things they can afford to buy.

The news that inflation is falling is welcome, but the government's intention to break all links between it and benefits means prices are stretching away from unemployed people's incomes, causing poverty for all.