Thursday, December 10, 2009

Alistair Darling denies benefit rise pre-election 'con'

The claim came after it emerged Mr Darling did not set aside funding to pay for rises for more than one year।
Mr Darling told BBC Radio 4's Today the increases, in child and disability benefit, were "not temporary".
He also defended his decision to delay vital spending decisions until after next year's general election.
He said he had not carried out a full spending review because of continued economic "uncertainty" but insisted spending growth in non-protected areas would be "pretty much flat".
'Honest'
How much each department gets will depend on unemployment levels and how much money they have been able to squeeze out in efficiency savings, the chancellor suggested.
"Frontline" spending in schools and hospitals will be protected from cuts, he stressed.
In Wednesday's pre-Budget report, Mr Darling announced a 1.5% rise in child benefit and disability benefits from April - just weeks ahead of the expected date of the general election.
He also announced an above-inflation 2.5% increase to the basic state pension.
This was followed on Thursday by an announcement that jobseeker's allowance and incapacity benefits would rise by 1.8% from April next year.
It makes me angry that bankers will get bonuses when the public sector, who work with the most vulnerable members of society, will receive pay-cuts
Rachel Gilroy, Crawley
Mr Darling said he was waiving the normal requirement to link the rise to the rate of inflation the previous September, as this would have led to the benefits being frozen because inflation was negative at that point.
But the Conservatives pointed to Treasury documents suggesting the benefits would rise in April 2011 by less than whatever the inflation rate-linked rise should be.
Tory spokesman Andrew Selous said it was "completely unacceptable and deeply cynical" to increase benefits before an election only to cut them afterwards.
And shadow chancellor George Osborne, for the Conservatives, said the government's economic plans should be "honest".
Mr Osborne told Today: "We have got to stop having a pre-election con where you put benefits up weeks before a general election and cut them afterwards."
But Mr Darling denied "electioneering" with the increases, insisting that the benefits would be reviewed again in 12 months' time and said the extra cash will not be taken back.
George Osborne criticised the ''cynical'' pre-Budget announcements
"I brought forward some of the increases in child benefit and disability benefits - 1.5% - because I thought it would be better to do that rather than have a situation where those benefits were frozen.
"Every year the government has to have a review of benefits. In 12 months' time we will look at what the situation is and we will know what inflation is in 12 months. The announcement I made yesterday in relation to those particular benefits was for this year.
"I was quite deliberately bringing the thing forward, because otherwise you would have had a situation where these benefits were frozen and I thought that would be a little bit unfair.
"A 1.5% increase in benefits I don't think can, with the best will in the world, be called electioneering.
"It is not a temporary rise, it is a rise we have put in this year and it is not going to be taken back. We will look at it again next year."
'Foolish things'
Lib Dem Treasury spokesman Vince Cable said the government should "spell out honestly to the electorate some of the things that would have to be cut".
Vince Cable: ''We all have to be much more honest with the electorate''
He said Mr Darling was right not to "rush into" spending cuts - but he said no areas should be "ring-fenced".
He told Today: "I think the more you impose ringfences and restrictions and sacred cows, the more difficult it is then for everybody else, and often very damaging cuts have to be made elsewhere."
He said it was important not to cut indiscriminately in "sensitive" areas such as hospitals and schools, but added: "There are some vast amounts of foolish things that this government has created, these curriculum authorities, an oppressive inspection regime - a lot of these things have got to go and we have got to be very firm about that."
And on health he said: "Vast sums have gone into the health service, it hasn't always been used efficiently and we should be honest enough to acknowledge that there are ways in which this could be done better."
Mr Darling is also facing claims his plan to raise National Insurance by an additional 0.5% "will lead to a real cut in health spending" because of increases in its vast wages bill.
National Insurance
George Osborne said it was "nonsense" for ministers to say they could raise NI and protect NHS budgets because the health service is such a big employer.
He said the tax would leave the NHS with a £446m-a-year bill
But Health Secretary Andy Burnham, who has unveiled his vision for the NHS over the next five years, said he was "amazed" the Tories were using this line of attack, as health spending increases were "locked in" and any efficiency savings would be reinvested in patient care.
"The NHS is getting a 5% increase next year because of the National Insurance increase. It will lock-in that uplift for years to come," he told the BBC News Channel.
The government said "difficult decisions" had to be made in order to reduce the UK's £178bn deficit but any spending cuts would come when the economy was growing again.
In his pre-Budget report, Mr Darling said there would be a 0.5% rise in National Insurance, on top of a 0.5% rise already announced, and a 1% cap on public pay settlements from 2011.
The increase, limited to those earning more than £20,000 a year, will hit about 10 million workers.
According to Treasury estimates, someone earning £30,000 will be £90 a year worse off and someone on £40,000 will be £190 worse off, while someone earning £10,000 a year will be £110 better off।