§ Mr. MichaelTo ask the Secretary of State for Social Security what level of inflation has been allowed for in his Department's calculations leading up to the setting of social security benefit levels for(a) 1988–89 and (b) 1989–90.
§ Mr. ScottThe April 1988 uprating was based on the published movement in the retail prices index (RPI) between September 1986 and September 1987; the index rose by 4.2 per cent. The rates of the new income-related benefits took account of a rise of 3.2 per cent. in the RPI less housing costs over the same period.
The uprating in April 1989 is based on the movement in the RPI between September 1987 and September 1988; the RPI rose by 5.9 per cent. and the RPI less housing by 4.7 per cent. over that period. Because the RPI was subject to an error which was corrected during the relevant period, benefits are being increased by more than the rise in the RPI where necessary to compensate for the error. Also in recognition of the error the premiums in the income-related benefits will receive an extra increase.