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Ministers 'consider alternatives' to 5.2% benefits rise
Ministers are concerned about the big hike to the benefits bill Continue reading the main story
Ministers are considering alternatives to an inflation-linked rise to benefits, government sources have said.
Benefits and pensions are due to go up by 5.2% from next April, in line with September's inflation figures.
But the government is worried about the cost of such hikes and the impact on public opinion given the current low wage increases.
Deputy Prime Minister Nick Clegg said the government would "not balance the books on the backs of the poor".
He said "difficult decisions" would have to be taken, but he would not "provide a running commentary on decisions and debates which haven't even been held in government yet".
Sources would not say what other options were being considered instead of an inflation-linked rise.
The BBC News channel's chief political correspondent Norman Smith said one possible option could be raising benefits in line with the average inflation rate for the year, rather than the September figure.
The Financial Times is reporting that Chancellor George Osborne has asked officials for alternative models, including a rise in line with average earnings growth of about 2.5% or freezing some payments.
It is understood the government will have "resolved" the options by early December when the uprating of benefits is presented to Parliament.
The Institute of Fiscal Studies has calculated that the 5.2% September inflation figure will add £1.8bn to welfare spending next year.
It said freezing all benefits and pensions would save about £10bn and linking benefits increases to wage rises would save £5bn.
A further option of switching from the September inflation figure to an average inflation figure calculated over six months could save about £1.4bn, the IFS added.
During a visit to RAF crews in Lincoln, Mr Clegg said: "I think we all know that we are having to do something extremely difficult.
"But we have been very, very clear, we're not going to balance the books on the backs of the poor. That will remain our guiding principle as we continue to take these difficult decisions in the weeks, months and years to come."