Pensions Update

Christine Jardine Excerpts

Tuesday 7th September 2021 Commons Chamber

[Dr Coffey]

I cannot give that commitment to my right hon. Friend today, because I do not know exactly what it involves, so I will take his request away and consider it. I want to emphasise that overall we have seen a variety of increases over the past decade owing to the triple lock policy. I am confident, as I have flagged already, that we have seen a substantial increase in pensioner income as a result of that policy thus far.

[Christine Jardine (Edinburgh West) (LD)]

First, may I congratulate the Government on quite an afternoon? One afternoon, two statements, two broken promises—even for this Government, that is quite an achievement.

Despite all the problems that we have heard about, the triple lock was designed to protect pensioners, 2 million of whom live in poverty in this country, from the days when all they could expect was a 75p increase. Will the Secretary of State clarify two things? First, she said in her statement that the earnings link was set aside last year because of earnings falling by one percentage point. My understanding of the triple lock was that it would always mean the higher of 2.5% inflation or earnings, so would the percentage not have been 2.5% anyway? Secondly, would she be prepared to put it in writing, in legislation, that this is only for one year, so that pensioners do not feel that they have been asked to take the word of a Government whose word is not worth the paper it is written on?

[Dr Coffey]

The one year will be set out in the Bill, which I expect to be published tomorrow. As I have said, Steve Webb—the former Lib Dem pensions Minister, who probably knows more about pensions than any other member of the Liberal Democrat party—has been very public about the fact that this is a pragmatic approach, in effect, and it is not what this was designed for. I also point out that, when I made a similar statement last year, the hon. Member for North East Fife (Wendy Chamberlain), who usually speaks on DWP matters for the Liberal Democrats, asked about what would happen next year and whether we should anticipate that something like this approach might be needed again. That was a fair question, but it was important that we took things one year at a time because we did not know the future impact.

As I have already articulated to the hon. Member for Edinburgh West (Christine Jardine), this will be for one year only. The setting aside of the earnings link is because earnings are built into the Pensions Act. If we had not changed the law last year, we would not have been allowed by law to have increased the state pension at all; it would have been frozen in cash terms. Just as last year we set aside the earnings link to allow the uprating and ensure that state pensions were not frozen, this year we are setting it aside to correct for the fact that we have a statistical anomaly.