States pension rise ‘comes across as a token gesture’
A CAUTIOUS welcome has been given to the proposed increase in the States pension but Age Concern chairman David Inglis said its members hoped that proposed reforms would give them a ‘better deal’.
Mr Inglis said that while the 6.8% increase being suggested was encouraging, it did not reflect people’s future expenditure, particularly with something like electricity prices already set to rise by another 7%.
‘It comes across as a token gesture,’ he said. ‘It would be more beneficial if there was more in the pot.
‘But we accept that they didn’t adjust the pension mid-term and they said they would look at it because of the rising rate of inflation.’
Employment & Social Security’s policy letter on the uprating of the pension and other contributory benefits includes a request for members to approve it looking into reforming the system.
‘Before starting this work, we’re asking the States if they support this general direction of travel,’ said ESS president Peter Roffey.
Mr Inglis said Age Concern members would ‘have to be optimistic that they are considering us and that they might be able to give us a better deal further on down the line.
‘But what we’ve got to remember is that members are now subject to taxation which wasn’t the case a few years ago, so it can be giving with one hand and taking with the other.’
While the States pension increase will be 6.8%, the same as the RPIX for the year to the end of June, if approved by the Assembly, had ESS based the rise on its guideline policy, it would be 6.4%.
This formula, introduced in 2016, was for the rise to be RPIX plus one third of the increase in median earnings.
Committee president Peter Roffey said that with the rise in median earnings being lower than inflation over that period, ESS is proposing that it be dropped in favour of going for RPIX alone, which would be the fourth time in five years that this path was taken.
He said he would be ‘surprised and disappointed’ if members did not accept the uprating proposal.
The same applied to the request for members to approve ESS looking into a progressive restructuring of the social security contributions system.
‘The Guernsey Insurance Fund is losing money hand over fist each year and we’ve got to do something to start reducing those losses,’ he said.
But a decision on the uprating report was essential when it was put forward next month to enable it to come into effect on 1 January next year and he would be asking the Assembly to debate the report ahead of the Policy & Resources Funding and Investment Plan which included its suggestions for tax reforms.
