Social Security

The hon. Gentleman makes a valid point, and we will have to keep the issue under review, especially as far as pensioners are concerned, in the extraordinary circumstances into which we are heading. Depending on the benefit, either the RPI or the Rossi index is used. Before we decide on the merit of the order, it is worth trying to understand which inflation measure is applied to each benefit and why. It is important to debate those issues because they open up important questions about whether different groups in our society suffer from different inflationary pressures. The benefits that people will access as a result of the order being made today will differ depending on the inflation measure that is applied to the benefit. The question that we have to ask when considering the merits of the order is whether the uprating will cover the increased cost of living to which the particular group drawing that benefit is subject. The RPI is applied to uprate contribution-based jobseeker's allowance, child benefit, incapacity benefit, carer's allowance and disability living allowance. Those are the main benefits to which it applies. The RPI is calculated by the Office for National Statistics each month by collecting some 110,000 prices of about 650 goods and services in about 150 locations, including on the internet. These goods include the obvious ones—bread, cereal, furniture and clothing, as well as water, gas and electricity. With that information, the ONS uses data from the Department's family expenditure survey and other detailed expenditure analyses put together by market research companies and trade reports, and arrives at a representative shopping basket. The changes in prices of the goods in the basket are used to produce a headline figure that is intended to be broadly representative of the cost of living. With reference to the RPI, which is the subject of the order, it is worth pointing out that the patterns of pensioner expenditure are not explicitly factored into the representative shopping basket. The ONS explains that that pattern of demand is probably atypical and would distort the average. Pensioner households, which on average derive about three quarters of their income from the state one way or another, are having some of their benefits uprated by the order according to an inflation index that does not explicitly acknowledge or comprehend how they spend their money. That is an important point that we need to bear in mind.