Social Security (Up-rating of Benefits) Bill

Baroness Sherlock Excerpts

Report stage
Tuesday 2nd November 2021 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I will speak to the other amendment in this group: Amendment 5, in my name and that of the noble Baronesses, Lady Janke, Lady Altmann and Lady Boycott. But first, I want to comment on Amendments 1 and 7 and thank the noble Baroness, Lady Altmann, for her introduction and explanation of them.

Noble Lords will remember that in Committee, the noble Baroness, Lady Altmann, tabled an amendment which simply excluded pension credit entirely from the effects of the Bill. The Minister opposed this on lots of grounds, but probably the main one was that the earnings growth had been distorted as a result of the pandemic, and therefore it would not be an appropriate way to increase pension credit. The noble Baroness has come back with Amendments 1 and 7, which would require the Government to uprate pension credit with reference to earnings but adjusted for the effects of the pandemic.

As the noble Baroness mentioned, I am quite sure the Minister will get up and say that the Government do not believe a figure can be found which will be robust enough to use as a measure of underlying earnings growth. We will come back to the substantial discussion on that point in the third group, but, in short, Labour accepts that there is a distortion in the earnings data, but we think the Government should go back and try harder to find an alternative way to deal with this without ditching the earnings link and the manifesto commitment to the triple lock—and, indeed, losing the trust of the nation while they do so. Our view is that that should be done for the state pension, which we will come back to in the third group.

In the meantime, we need the Government to face into the growing problem of pensioner poverty and to develop a longer-term strategy for tackling it. Amendment 5 would force the Government to start by assessing the impact of the Bill on pensioner poverty within six months of the Bill passing, followed by a Statement to both Houses of Parliament.

We know we have a problem. I will not go over again all the evidence from around the House that we rehearsed in Committee, but let me give a quick summary. Pensioner poverty was doing really well: it fell markedly between 1997, when it was 29% for the UK, and 2010, when 14% of pensioners in Great Britain were living in poverty. That was due primarily to the introduction of pension credit. From 2012, pensioner poverty started to rise again. Last year, 18% of our pensioners were living in poverty—that is more than 2 million pensioners now in poverty, with over a million in severe poverty.

There is a real gender pensions gap. The number of women pensioners living in poverty has increased dramatically at a time when the total number of women pensioners has fallen as a result of the state pension age going up. That is really significant. We also have a particular problem in some regions, especially London, and there is a worry about a growing problem in the north. Older people from black and Asian communities are around twice as likely to be living in poverty as white pensioners.

The context for the Bill is a cost of living crisis, with inflation rising and energy bills skyrocketing. I raised this in Committee, and the Minister responded to my concerns by saying that energy prices were built into CPI. But the prices reference point for uprating is the September CPI rate, and the energy cap was raised on 1 October. It has been raised by £139 for those paying by direct debit and a huge £153 for those on prepayment plans. Yet again, there is huge premium on being poor: the poor pay far more per person for energy than the rich.

Given the worries about pensioner poverty from around the House, and the fact that the state pension is the largest single source of income for most pensioners, it would seem obvious that Ministers should carry out an impact assessment so that they would know what effect suspending the triple lock would have on pensioner poverty. But, astonishingly, there has been no impact assessment for the Bill. When I moved a similar amendment in Committee, the Minister said it was not possible to do what we asked because it would involve modelling. She said:

“Assumptions would need to be made about how each individual pensioner’s income would change in future under each scenario.”—[Official Report, 26/10/21; col. 750.]


I accept that assumptions would have to be made—that is what happens when you model things. Is it really impossible to model the impact of this policy? If so, how does anyone model the impact of any policy on poverty? When I was a spad in the Treasury—which I accept was back when dinosaurs roamed the land—it had a TAXBEN model which it used to assess the impact of any changes in taxes and benefits. Also, in those days, the DWP had some of the best statisticians anywhere in Whitehall. I have no reason to believe that that is not the case now, although I know the department has shrunk. So, I recognise that assumptions would need to be made, but in modelling they just have to be reasonable and stated. I would even be happy with an assessment which ignored behavioural responses, if that would make it easier.

There is a common theme across all the amendments today and there are concerns from all Benches about low pensioner incomes. Our simple amendment reflects that concern. If the Minister is not convinced by all the evidence mentioned here and in Committee, I urge her simply to accept my amendment and do the work to establish the facts. If the Government want to break their manifesto commitment, at least they should be committed to gathering and publishing information about the impact of that decision. I look forward to the Minister’s reply.

[Lord Rooker (Lab)]

My Lords, I had not intended to speak. I can see why there is a logic against the noble Baroness’s amendment in some ways, although if she puts the amendment to a vote, I will support her. There was a time—I am going back some years now—when the Government were committed to a link. The consequence of that was that I had to put forward a 75p pension increase. I remember saying to Alistair Darling, my boss, “Couldn’t we make a quid? It’ll be a lot easier to explain a quid than 75p.”. He said, “No, no. The formula’s there. The Treasury said this is what we do: we stick to the formula.” So we stuck to the formula. I was always able to defend it in a way because the supplementary pension, although people did not always apply for it, was worth three quid rather than 75p, but we know about the uptake. The Treasury factor in that people do not take up benefits.

However, here it looks as though pensioners are being treated unfairly. I do not think they are because, as I shall say tomorrow in the debate on the Budget, there are so many hidden tax increases, particularly for pensioners with a very small occupational pension who are at the moment outside the tax net but who will be sucked into it because of the freezing of the personal allowance over a five-year period. Substantial numbers will be paying tax without anybody announcing a tax increase, and that is unfair. I hope that some time, when he flies in, the noble Lord, Lord Lawson, will come to support me on the basis that he supported me and Audrey Wise in 1977 to make the system workable.

However, the noble Baroness has a point. I do not intend to speak on the other amendments because there is a point where logic says you cannot take account of the pandemic. I understand the long run. For a couple of years, I did the job that the Minister is doing and I understand that Ministers are presented with a 30-year run of the consequences of any change in the figures. That has got to be the case when you are talking about pensions.

If we had the second or third-best pension in Europe, we would not be having this argument, would we? However we have one of the poorest basic pension rates of any modern economic country, but we are, so called, one of the richest. Sometimes we have to say, “Hang on a minute: let’s take a stand,” and I think today is an opportunity to do that. I know the logic is against this, but when one looks at the figures, it is an opportunity to make a change. The Government could be forced to have a look at some of the long-run consequences of having such poor pensions, where they factor in low uptake of pension credit. One of the documents produced for the Budget on changes in household incomes mentions that they factor in that people will not claim benefits to which they are entitled. That is not very fair. Today is an opportunity for the little people to hit back.

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[Baroness Stedman-Scott (Con)]

My Lords—

[Baroness Sherlock (Lab)]

My Lords, my apologies: I was too slow to leap up. I thank my noble friend Lord Davies for introducing his Motion and thank all noble Lords who have spoken. As I said in Committee, I think we all share an underlying concern, which is about the living conditions of pensioners—particularly poorer pensioners—in our society. I will not rehearse our debates on pensioner poverty, but I am grateful to my noble friend Lord Davies for opening up the question of a strategic approach to the state pension.

The assumption had been that the state pension, old or new, was the basis, or the foundation, of developing retirement income and that any private provision would be on top. Given that we have rising levels of pensioner poverty now, and looking across the landscape of current saving rates on auto-enrolment, are the Government confident that this strategy is working and that people will have adequate income in retirement on the basis of the figures that she is seeing? I should be interested to hear her response to that.

My noble friend Lord Sikka again mentioned the question of people who are struggling. We are very anxious about the cost of living facing pensioners in the difficult months ahead, which is why I very much hope that the Government are tackling pensioner poverty in the ways that we have discussed.

Taking my noble friend Lord Davies at his word, he did not in fact raise this with the intention of pressing the Government for 8.1% now but to raise the broader questions. I hope the Minister will take him on that basis and give him a response that will help to answer the kind of questions he has raised.

[Baroness Altmann (Con)]

I apologise for being even slower to rise. I will not detain the House long. I would just like to echo and support the calls for a wider review of state pensioner support. That is long overdue. Perhaps this debate will produce a willingness at the department to look again at all the elements of the way we support pensioners in this country.

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I very much support the alternative approach of the noble Baroness, Lady Altmann. I think most of us here agree that what is proposed in the Bill is woefully inadequate. I hope that all Members of this House will support this amendment and send it back for MPs to think again.

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Altmann, for explaining her amendments, and all noble Lords who have spoken. I welcome my noble friend Lady Ritchie to the debate and thank her for sharing her perspective on Northern Ireland with us and the position of women. That was very helpful.

We had a good discussion at earlier stages of the Bill about the way the Government have gone about finding an alternative to the triple lock which will deal in some way with the impact of the pandemic on earnings data. As the noble Baroness, Lady Janke, has just indicated, I do not think many of us are very happy with where the Government have landed; I think that is safe to say. I will not rehearse all the arguments from Committee, but I am going to summarise them because noble Lords have made some very important points about poverty. There is an additional dimension to this amendment about the question of principle.

The Government came to power on the back of a manifesto commitment to the triple lock. Labour also supported the triple lock at the last election. Therefore, for all of us, the starting point is that the triple lock should apply. We on these Benches accept that the earnings growth data have been distorted by the effects of the pandemic directly, and the effects of the furlough scheme and changes in hours. But that does not mean the Government should just ditch their manifesto promises.

As my Commons colleague, the shadow Pensions Minister Matt Rodda MP put it at Second Reading:

“At the very least, Ministers should maintain an earnings link, explain their decisions, offer binding commitments to protect the triple lock and protect the incomes of less well-off pensioners.”—[Official Report, Commons, 20/0/21; col 63.]


Well, quite. Both in the Commons and in this House, Labour has made clear its view that the Government should have found a way to deal with this that maintained the earnings link. The importance of the earnings link has been very well explained by the noble Baronesses, Lady Wheatcroft and Lady Greengross, my noble friend Lady Lister, and others.

But how should that be done? In the Commons, Labour suggested using an average rise in earnings over a longer period of time. In this House, I first suggested that to the Minister not in this Bill but in the passage of the Social Security (Up-rating of Benefits) Act 2020. That was the emergency Bill designed to deal with the fact that earnings were negative last year, therefore something had to be done to uprate it. This year in Committee, again I raised the question of why the Government did not smooth the effects over two years, but I got no satisfactory answer and I accept that time has moved on. So where does that leave us?

The Government will say that we cannot pin down precisely the size of the pandemic effect on earnings growth. That is true, but the best we have is the work that the ONS has done. Its modelling stripped out the two main things: the base effects and the compositional effects. If noble Lords will forgive me for “nerding” for a moment, I will explain them.

The base effect is essentially that, a year earlier, people were on furlough and worked fewer hours; when you measure earnings a year later, more of them have gone back to work and are on full hours, so earnings appear to have jumped a lot. That is one effect. The compositional effect is a change in the composition of the workforce—people on lower incomes were more likely to lose their jobs in the pandemic.

The ONS modelled stripping both of those effects out to try to get a figure for real underlying earnings growth across the year to use as a reference point. It came up with a range for that underlying growth. The Government do not like it because they think it is not robust enough to use as a measure for uprating earnings. If they do not like those figures, I suggest that it is up to the Government to go away and find some other way to show that the earnings link is being maintained. Amendment 3 does not specify any figure, and Amendment 4 merely says that the Government should use a figure for earnings chosen

“in the light of reasonable adjustments to take account of the impact of the COVID-19 pandemic based on the Office for National Statistics reported earnings figure.”

In the Commons, my colleague, the shadow Work and Pensions Secretary, Jonny Reynolds, said:

“I do believe there is a need to maintain the value of the state pension and the objectives of the triple lock are ones we should keep to”.—[Official Report, Commons, 20/9/21; col. 84.]


That is the problem with the Government’s approach in a nutshell. Their proposals in the Bill mean stepping away from the fundamental principle that pensions should keep up with earnings. They also breach the manifesto commitment to the triple lock, which, as my noble friend Lord Davies said, is a breach of trust with the electorate—that is the third, coming after the cut in overseas aid and the national insurance rise. There must be a better way than this, and this amendment directs the Government to find it. If they do not like this wording, they can bring back an amendment in lieu.

I realise that the Bill needs to be on the statute book by 26 November, for reasons to do with IT, but that is more than three weeks away. The Government managed to get the whole Bill, in all its stages, through the Commons in a few hours, so I do not believe it is beyond their wit to be able to come up with an alternative and come back to the House in due course.

For us, this is a matter of principle. It is not just about the amounts of money. That is why we are supporting this amendment, specifically on the earnings link for the state pension. The Government should find a way to keep their manifesto promise and maintain the earnings link, and to do so in an appropriate way. I hope the Minister will accept it.

[Baroness Stedman-Scott (Con)]

My Lords, I thank the noble Baronesses, Lady Altmann, Lady Janke and Lady Wheatcroft, and the noble Lord, Lord Hain, for their amendment. The Government’s reasons for not adopting an altered measure of earnings have not changed. That includes the unacceptable level of risk that would be attached to changing the definition of earnings using the current legislation. I remind your Lordships again that the cost of failing to secure Royal Assent to this Bill by mid-November would be in the range of £4 billion to £5 billion.

I very much understand my noble friend Lady Altmann’s concern about a temporary suspension of the earnings link, for all the reasons she and others have so eloquently outlined. But the fact remains that the figures quoted from the Office for National Statistics have no official status and have been taken from a blog that the ONS published, alongside the usual earnings statistics, first in July this year and then in subsequent months.

The key reason why the Government cannot accept this amendment is that the ONS figures are just not robust enough to form the basis for an uprating decision. This is best demonstrated by two quotes from the ONS:

“The blog explains that there are a number of ways you can try to strip out these base effects, but there is no single method everyone would agree on. We have tried a couple of simple approaches. Neither approach is perfect … Our calculations of an underlying rate are there to help users understand base and compositional effects, but there remains a lot of uncertainty about how best to control for these effects, so they need to be treated with caution.”


Using a range of possible estimates based on a method that cannot be agreed on does not provide a sufficiently robust basis for making critical decisions about billions of pounds-worth of expenditure.

A further point is that the ONS has calculated its range of adjusted underlying earnings growth for a measure of regular pay. The usual measure of earnings used for uprating is total pay, which is regular pay plus bonuses, because this gives a more complete picture of earnings, as bonuses can play an important part in earnings. There are no such problems with CPI inflation, which is a robust national statistic and provides a clear and sound basis for this year’s uprating, with no need for any complex adjustments.

I must remind the House that this Bill is for one year only. From 2023-24, the legislation will revert to the existing requirement to uprate by at least earnings growth, and the Government’s triple lock manifesto commitment remains in place.

Finally, I point out that, if a percentage of 3.1% or more is applied in 2022-23 to the current rate of the basic state pension, this would mean that the full yearly rate will have increased since 2010 by £570 more than if it had been uprated by prices; that is over £2,300 pounds more in cash terms. In addition, people over state pension age are entitled to free winter fuel payments worth £2 billion every year, free eye tests and NHS prescriptions worth around £900 million every year, and free bus passes worth £1 billion every year.

My noble friend Lady Altmann talked about the cost-of-living crisis in relation to energy and inflation. Ofgem’s energy price cap has protected consumers from the recent fluctuations in wholesale gas prices. Millions of low-income households will be supported with the cost of essentials through the £500 million household support fund. This builds on the £140 warm homes discount, which helps 2.2 million low-income households with their energy costs, and the winter fuel payment, which provides £200 toward energy bills for households with a member at or above state pension age and £300 for households with a member at or above 80 years old.

The noble Baroness, Lady Lister, talked about not receiving a letter. I am assured that the letters have gone out. If, by the end of this debate, she still has not received one, I hope she will let me know and I will make sure this is rectified. I say the same to everybody in the House: I am sure that those letters have been sent. In the light of my remarks, I ask the noble Baroness to withdraw her amendment.

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Tabled by

[Baroness Sherlock]

5: Clause 1, page 2, line 11, at end insert—
“(3) Within six months of the passing of this Act, the Secretary of State must publish a review of the impact of this Act on pensioner poverty.(4) The review must examine, but is not limited to, the impact of this Act on women.(5) This review must be laid before both Houses of Parliament, and a Minister of the Crown must arrange to make a statement.”

[Baroness Sherlock (Lab)]

My Lords, on Amendment 5, I thank the Minister for having listened to our representations on the impact of this Bill and for agreeing to publish an impact assessment. I would have preferred to have had a chance to read it before making a decision. However, given the Minister has moved on this issue, I accept her assurances and will not press my amendment. I should warn her that we shall keep coming back to the matter of pensioner poverty, so I hope that the Government have plans to tackle this in the longer term. For today, I thank her and shall not press my amendment.

Amendment 5 not moved.

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[Lord Hendy (Lab)]

My Lords, it is a pleasure to follow my noble friend Lady Blower. I support all the amendments that have been advanced today because they all have the object of protecting the level of state pensions. I particularly support Amendment 6, moved by my noble friend Lord Sikka.

I apologise that I was out of the country last week and so missed participation in Committee. However, I hope noble Lords will allow me to develop a short point that I made at Second Reading. Because, as a Member of your Lordships’ House, I have endeavoured to restrict my participation to the issues that arise from the rights and interests of workers, I want to emphasise two reasons why the state pension is of such concern to workers. The first is that pensions are the deferred wages that workers effectively earned while they were able to work. Once retired, their capacity to earn from their labour is exhausted and pensions are essentially what sustains them. Low earnings lead to low pensions, and the pay gaps manifested in earnings are duplicated in pensions—the gender pay gap in particular, but also differentials based on ethnic origin and disability.

The impact on pensioners of the failure of pensions to keep up with the costs that they face—as noble Lords and, in particular, noble Baronesses have pointed out—will be profound. Some 25,000 of our elderly already die of the cold each year, 2 million live in poverty and 1.3 million do not get enough to eat. Life expectancy is falling in the areas with the greatest poverty.

That leads to my second point. The second reason why present pensions are also of concern to those who are currently in work is this: my noble friend Lord Sikka reminds us that the Government estimate that, by the removal of the triple lock, they will save £5.4 billion from pensioners in the year 2022-23 and some £30.5 billion over five years. That is money that, were it left in the purses and pockets of pensioners, would be spent on food, clothing, heating, rent and so on. Pensioners’ incomes are spent in their local economies. There they help to sustain the jobs of current workers, particularly in shops and local services. Make no mistake: more high street shops will close and more jobs will be lost from the failure to maintain the triple lock, and it will hit the poorest areas the hardest. The impact may be indirect but the ending of the triple lock will affect current earners as well as current pensioners.

The Minister, who is rightly respected because of her sensitivity to the plight of the less well-off, knows that well. She was kind enough to write to me and other noble Lords after Second Reading explaining her position, but her Government have no answer to the two essential points made in the debates today. The abolition of the triple lock will mean that poor pensioners and the poorest local economies in the country will be made yet poorer. Such outcomes are far from necessary, as my noble friend Lord Sikka has repeatedly demonstrated through the progress of the Bill. I therefore support his amendment and all the others that seek to salvage something from the wreckage.

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend Lord Sikka for introducing his amendment, and all noble Lords who have spoken.

As I have said previously, many of us around this House share an underlying concern about the living conditions of pensioners, especially poorer pensioners. We have had lengthy debates about pensioner poverty in Committee and in debating my Amendment 5, so I am not going to revisit the issue at length at this stage of the Bill. However, I am pleased that the Government have agreed to publish information about the impact of the Bill, which I hope will help us to press the case for a fresh assault on the growing problem of pensioner poverty.

I explained in earlier debates our stance on uprating and what we think is the right way forward. We do not believe the Government have presided over earnings growth of 8%, much as they would like us to think they have. We think they should find a way to deal with the earnings data distortion caused by the pandemic and look for a way forward that maintains the earnings links and uprating and fulfils their manifesto commitment to a triple lock. That is the right way forward.

There is an additional issue in how this amendment is framed. The elected House has voted for the Bill and, since it has only two clauses and Clause 2 is simply the commencement, extent and name of the Bill, to delete Clause 1 would effectively completely eviscerate the Bill. I understand how strongly my noble friend feels about this issue; we all feel strongly. The question is not what we want to happen and what we think is the right thing but how this House can best achieve a result for those who most need our help.

So although we cannot support my noble friend’s amendment, that does not in any way mean that I believe the Government have got this right; I really do not think they have. That is why we on these Benches are very happy to throw our weight behind the amendment that is going to go back to the Commons and make them look at this issue again. I urge the Government to find some way in which they can fulfil their manifesto commitment, maintain that earnings link and make sure that people out there get the uprating that they need. I hope the Government can do that.

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[Baroness Sherlock (Lab)]

My Lords, I normally think my job is basically to help the House by offering an idiot’s guide to how things work, but I think it is beyond me this evening. My noble friend has asked so many questions that I want to add only a couple.

First, I want to see whether I can understand what the Minister was saying in her letter on 25 October. I think she was saying that the national insurance scheme is financed on a pay-as-you-go basis, with contribution rates set broadly at a level necessary to meet the likely cost of contributing benefits and pensions in that year, taking into account any other payments and receipts and the need to maintain a working balance, which seems to be targeted at 16.7% of benefit expenditure. That is an oddly precise figure, whose basis completely eluded me, but maybe she can enlighten me.

The Minister’s response said the fund may be in surplus now but it was forecast to be in deficit next year so there would not be a surplus to draw on. I think her case is that the context of surplus is not meaningful, because the fund is designed to wash its face, and therefore, if income is lower or expenditure higher than expected, the Treasury tops it up and reverses those ships back out again. Is my idiot’s guide right—have I understood the Minister’s case? If so, can she answer some questions?

If there is a surplus of £37 billion, why is it so high this year? What is the projected deficit for next year, and why is it projected as that? I think my noble friend addressed my next question on the hypothecation of funds for the NHS. When the Secretary of State makes her statutory decisions on uprating, is any reference made to the state of the National Insurance Fund?

Finally, on a slightly tangential point, anyone who has ever knocked on doors during elections will know that a certain proportion of voters is still convinced that the National Insurance Fund is hypothecated at the level of the individual: “There is a savings account somewhere in the Treasury with my name on it; my national insurance contributions go into that and pay my benefits and pension when I retire.” I think that is one of the reasons why so many people are outraged when they find their state pension age pushed back or, after years of paying contributions, they finally claim benefits and find they are incredibly low—far lower than the tabloid coverage had led them for many years to believe was being offered in largesse to the poor.

In practice it is a pool system, not an individual one, and today’s workers pay for today’s pensions, not their own pension. Given that, does the Minister think there is enough transparency on the way the National Insurance Fund works? People are now paying 20% standard rate tax and 12.5% NI, so most workers are going to be paying 32.5%; and NI kicks in at a lower threshold. Does she think the Government are sufficiently accountable for all that and the way it is spent? I would be interested in her comments.

[Baroness Stedman-Scott (Con)]

My Lords, out of courtesy to the noble Lord, Lord Sikka, and the noble Baroness, Lady Sherlock, for the points that she has made, and to bring some clarity to the questions raised, I hope that the House will agree that I sent the letter in good faith, and will allow me to take it back to officials with the points that have been raised and come back with, I hope, the re-emphasis that is needed to clarify the position on the fund. However, I am advised that the first point raised by the noble Baroness, Lady Sherlock, in her summing up, is correct.

As the noble Lord, Lord Sikka, will be aware, there is an existing statutory requirement under the Social Security Administration Act 1992 for a GAD report on the likely effect on the national insurance fund of the draft Social Security Benefits Up-rating Order and the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations. There is no equivalent statutory requirement for this Bill, and GAD will conduct its assessment in the round based on the draft uprating order, which will include all benefits paid out of the national insurance fund, not just the ones covered by this Bill.

With respect to an assessment of the impact on the fund if this legislation is not passed, it is important that the working balance of the national insurance fund remains positive, as this ensures that there are always enough funds to pay for these benefits and allows the Government to deal with short-term fluctuations in spending or receipts. If the balance of the fund is expected to fall below one-sixth of forecast annual benefit expenditure, the Government will transfer a Treasury grant, paid from general taxation, into the fund. This ensures that benefits such as the state pension can always be paid as necessary.

I know that several noble Lords have suggested that, when in surplus, the fund can be used to increase expenditure beyond the level originally planned, but I am afraid that that is a misconception. The balance of the national insurance fund is managed as part of the Government’s overall management of public finances and reduces the need for it to borrow from elsewhere. Therefore, any additional spending from the national insurance fund would represent an increase in overall government spending and, without cuts in other areas of spend or additional taxes, an increase in government borrowing.

Not passing this Bill would not only increase state pension payments from the fund this year by an anomalously high figure of 8.3% but have a long-lasting compounded impact for decades to come as the anomalous figure would be baked into the baseline. The Government do not believe that this would be fair to younger taxpayers. Based on these arguments and the commitment that I have given to review the letter and the questions raised today, I ask the noble Lord to withdraw his amendment.