Shadow pensions minister Rachel Reeves has hit out at the Government’s decision to switch the indexation for pension increases from the retail price index to the consumer price index.
In July, pensions minister Steve Webb announced plans to change the measure for future revaluation from 2011.
However, following widespread industry concern that scheme legislation could have “hard-wired” RPI into the scheme rules of many sponsor companies, Webb confirmed the DWP would consult on the detail of the switch.
Speaking at a Professional Pensions conference last week, Reeves said Labour would stand against a permanent change in the pension inflation measure. She criticised the Government for failing to properly consult on the appropriateness of CPI for pensioners before the announcement.
She said: “There has been a lot of announcements about policy that do not have the detail in there.
“I heard Steve Webb say that CPI is a better measure of inflation for pensioners but he has not consulted the Office for National Statistics on that.
“It is easier to say it is a better measure than it is to prove it. It is very clear that it is a cost-saving policy.”
However, Reeves indicated Labour would be willing to consider an alternative policy that would see increases measured using the CPI until 2015. She also revealed Labour was supportive of a universal state pension in principle, although she insisted the contributory principle should remain intact.
Reeves said: “We do not want the contributory principle removed. We think it is right that those who pay more in should get something back.”