Government accused of 'cynical' benefit increases ahead of general election

Jobseeker's Allowance and incapacity benefits will rise by 1.8% from April next year, it was announced today.

The move comes after Chancellor Alistair Darling used his pre-budget report yesterday to announce an above-inflation 2.5% increase to the basic state pension.

In a statement to MPs today Pensions Minister Angela Eagle said the pension for a single person will rise by £2.40 to £97.65 a week.

Ms Eagle said benefits linked to the retail price index, such as those for disabled people and carers, will increase by 1.5% from April next year.

In total the uprating proposals will add £2 billion to the benefits bill for 2010-11.

Ms Eagle said it was "significant and worthwhile help for those among the poorest and most vulnerable in our society".

Tory spokesman Andrew Selous said it was "completely unacceptable and deeply cynical" to increase benefits before an election only to cut them afterwards.

Ms Eagle said income-related benefits are uprated in line with the Rossi index, which is the Retail Price Index (RPI) minus housing costs.

"This means those people who receive benefits such as Jobseeker's Allowance, employment and support allowance, incapacity benefits, will have an increase of 1.8% from April 2010."

Benefits linked to RPI faced being frozen as the index fell to -1.4% in September, but Mr Darling yesterday told the Commons that would be unfair.

Ms Eagle said the decision was made "because this Government continues to demonstrate its commitment to helping the poorest and most vulnerable in society".

She said: "This means we will increase benefits for disabled people and carers, statutory payments for parents and others who receive National Insurance-linked benefits by 1.5% from next April.

"So recipients of attendance allowance, carers allowance, disability living allowance and maternity allowances will have these important benefits uprated ensuring they do not fall behind."

The pension for a single person will rise by 2.5% to £97.65 a week, while the standard rate based on spouse's or civil partner's contribution will increase to £58.50.

This will give pensioner couples a total of £156.15 a week.

"This above-inflation increase, delivered as a result of a commitment by this Government will ensure that more than 11 million pensioners will receive a real terms increase in the value of their basic state pension."

But state additional pension will be held flat, meaning that on average pensioners will see an overall 2% increase.

Mr Darling had also confirmed that the standard minimum guarantee in pension credit will rise to £2.60 for single pensioners and £3.95 for couples from next April.

The Government will publish a "Back to Work" white paper next week, Ms Eagle announced.

She told MPs: "Our upcoming white paper will set out the next steps in our continuing determination to invest in people and give them the help they need because for this Government unemployment will never be a price worth paying.

"This package of up-rating proposals, worth around £2 billion for 2010-11, represents significant and worthwhile help for those among the poorest and most vulnerable society, providing real help in a challenging year."

Mr Selous said the Government had provided no funding in the PBR for the uprated benefits to remain beyond next year.

He said: "We welcome any action that can provide support to the innocent victims of Labour's failure to tackle poverty.

"But ... it is completely unacceptable and deeply cynical for the Government to increase benefit levels before an election only to cut them after an election.

"And this is exactly what the Government appears to be doing.

"The Government is committed to a 1.5% rise in child benefit, disability living allowance, carer's allowance and incapacity benefit but has no funding to continue these after the election year."

Mr Selous said it was the kind of "sleight of hand" that was now expected from the Government.

He welcomed the increase in basic state pension but asked when ministers would look to restore the earnings link.

And he said there was a "hidden threat" to pensions in yesterday's PBR which suggested new personal accounts would not be up and running until 2017.

Ms Eagle insisted the 1.5% boost was a real rise and should not be described as a cut.

Legislation was already in place to restore the earnings link for pensions from 2012 or by 2015 at the latest, she said.

Personal accounts would begin being introduced in 2012 as planned but there would be a "slowing" of implementation, Ms Eagle said.

Liberal Democrat spokesman Steve Webb said the 1.5% increase of benefits for disabled people and carers would be in place before an election in 2010 but then ignored in 2011, which he described as "the definition of cynicism".

"Had we had an increase in real terms in 2010 for disabled people and families that was a permanent feature of the system, we would have welcomed it unreservedly," Mr Webb said.

"As it is, it is a temporary, pre-election feature of the system which should have been made a permanent feature.

"I think we would have all hoped that this statement today would have made that clear - it's almost as if the Government are embarrassed about what they had done."

Tory Peter Bone (Wellingborough) called on the Government to be "clear" about whether the increase would be disregarded.

Ms Eagle said: "I'm not embarrassed about an uprating statement that puts £2 billion of extra resources, at a time of economic challenge and difficulty, in the pockets of people who are often the poorest and most vulnerable in our society."

The rise was "not temporary, it is real, and it is happening in April next year", she insisted.

But Ms Eagle also said the Chancellor had made clear the Government would have to decide in 12 months' time what would happen for the next year.

"Benefit upratings are only held on an annual basis, so we cannot speculate this far away when we don't really know what the rate of inflation will be and what the implications for uprating in 2011 will be," she added.