Oral Answers to Questions

Debate between Angela Eagle and Steve Webb

Monday 19th July 2010 Commons Chamber

[Steve Webb]

I am not sure whether the hon. Gentleman is aware that the Office for Budget Responsibility estimates that the country’s structural deficit is now more than £12 billion larger than it was thought to be at the election. I do not know where he would have got that £12 billion from. As for pensioners, not only will we ensure that we restore the earnings link, but in April 2011 the full value of the cash increase in the state pension will go through to the poorest pensioners on pension credit.

[Ms Angela Eagle (Wallasey) (Lab)]

Does the Minister agree that if the pensions in payment today had been linked to the consumer prices index rather than to the retail prices index for the past 20 years, pensions would be 14% lower than they are now? Does not the proposed shift in the definition of price indexation represent a huge raid on pension benefits, which gets worse and worse as time goes on and makes all current and future pensioners poorer?

[Steve Webb]

It pains me to suggest that the hon. Lady is being selective in her use of statistics, but if she looks at the increase in pensions as a whole—the basic state pension and additional pensions—she will see that we have linked the basic state pension to earnings, which over the course of 20 years, for a typical person retiring this year, will add £15,000 in extra state pension compared with price indexation, which was the policy of her Government.