Social Security (Up-rating of Benefits) Bill

David Linden Excerpts

Consideration of Lords amendments
Monday 15th November 2021 Commons Chamber

[Duncan Baker (North Norfolk) (Con)]

As the MP for North Norfolk, which has some of the highest numbers of older people in the country, you can understand, Madam Deputy Speaker, why I want to speak briefly in this debate. First, we have come back to basics. I was a finance director and a chartered accountant before I came into this place, so I have a reasonable grasp of statistics, and it is fair to say that this Government have, to the tune of around £400 billion, safeguarded the country through a pandemic that no one ever expected. Not only that, but the national debt sits at some £2.2 trillion, so it is understandable that we are sitting here this evening being extremely careful and prudent about what we do with our public finances.

The electorate, as we have seen many times before, will forgive a Government many things, but they will not forgive a Government being reckless with the public finances. We have to understand that, much as we would like to increase pensioners’ pay, every 1% increase costs the Exchequer a billion pounds. To put that in perspective, with an increase of some 8% to 9%, we are looking at an increase of some £8 billion to £9 billion. I can therefore see entirely how that would sit when we have to look in the eye of a prison officer, a police officer, a teacher, a firefighter or any other public sector worker who has seen their pay frozen for the past year. That is the real context. It is about fairness and a statistical anomaly caused by the dip, coming off furlough on to 100% pay and when the ONS statistics were taken. It has given rise to this one-off statistical anomaly.

What the House of Lords has proposed is sensible, and I took that to the Secretary of State to ask whether we could do something to still honour the framework of the triple lock, while ensuring that we have a sensible parameter to measure it by. The answer that came back was exactly the same as the one the excellent Minister just gave: we need a robust metric. We cannot just move the goalposts and cherry-pick a point in time because the argument does not fit at the moment. Many of my constituents have written to me about this issue, and when a detailed reply has gone back to them, a great number understand why we have this one-off double lock.

In summing up, I say two things to the Minister. First, woe betide us if we do not honour the triple lock next year. We have some of the best public finances recovery in the G7, as the Chancellor said the other week, so we must get back to giving our pensioners the pay increases they absolutely deserve, because they have paid in all their lives. Secondly, it would be wonderful to go into the next election with the resounding message that our pensions are good, honest pensions that people have earned all their lives, at a level that people can be proud of compared with Europe. Too often, our pensioners feel that is not necessarily the case. I would like the Minister to ensure that we put our pensioners at the front of the queue as we come out of this pandemic. I wholly understand what he has said this evening. I will be rejecting the Lords amendment, because it is sensible to maintain the public purse in the best possible way at a time like this, so that our country can rebound from where we are at the moment.

[David Linden (Glasgow East) (SNP)]

It is a pleasure to follow the hon. Member for North Norfolk (Duncan Baker), who spoke about the risks of throwing a billion pounds about here and there. I know he was not in the previous Parliament, when the Government were propped up by the Democratic Unionist party, but I recall them having no great difficulty finding a billion pounds down the back of the sofa. Indeed, I think the hon. Member for Strangford (Jim Shannon) was worth about £100 million, which is probably more than Messi.

Unlike the Minister, I am glad to see the Bill back in the House this evening, because the amendments passed by their lordships give the Government an opportunity to perform a U-turn with ermine grace and charm. Before it went back to the other place, the Bill as originally drafted facilitated the British Government breaking yet another manifesto commitment, namely the pensions triple lock, which I remind the House all parties in this Chamber committed to at the election fewer than two years ago. Thankfully, the Bill was amended in the other place, and I am grateful to Baroness Altmann for Lords amendments 1 and 2, which seek to restore the earnings link.

As we are relatively short on time, I will not go over some of the meatier issues that I outlined on Second Reading, including the Government’s repeated breach of their manifesto commitments, the worrying trends in pensioner poverty, pension comparisons with OECD countries and the—at best—disappointing lack of action on pre-existing equalities that are baked into our pension system. In speaking in favour of the Lords amendments, I will outline why the SNP continues to vote to respect its 2019 election manifesto commitment and why the Budget has changed things, which may result in more Opposition Members voting tonight than on Second Reading.

The Minister will have familiarised himself with the House of Lords Official Report, but in the interests of completeness and for the benefit of Hansard, I remind the House of what Baroness Altmann said on the cost of living crisis, which affects all the constituents we seek to represent in this House. She reminded the other place of the Government’s view that

“the 3.1% figure would still protect against rises in the cost of living.”—[Official Report, House of Lords, 2 November 2021; Vol. 815, c. 1140.]

She quoted the Under-Secretary of State for Work and Pensions, the hon. Member for Hexham (Guy Opperman) who said that that figure

“will ensure that pensioners’ spending power is preserved and that they are protected from the higher cost of living”.—[Official Report, 20 September 2021; Vol. 701, c. 86.]

However, the goalposts have moved, and the fiscal outlook is much bleaker. The Chancellor conceded in the Budget that inflation in September was already at 3.1% and would rise further. The Office for Budget Responsibility has gone further, predicting that consumer prices index inflation will reach 4.4% next year. It went on to say that inflation

“could hit the highest rate seen in the UK for three decades”,

which the House will know is about 7.5%. In reality, the Bank of England’s chief economist is forecasting 5%. To be blunt, the facts have changed and the Government must now change their position at least to reflect the fiscal outlook, if not to respect their manifesto commitment.

Pensioners across these islands are not immune from rising energy and food costs, and we know that inflation is biting hard for some of the most vulnerable people in our constituencies as we approach a harsh winter. Last month, energy bills rose by 12%, and food bills have also risen, so the Government must think again.

[Jim Shannon (Strangford) (DUP)]

The 12% figure is not reflected in Northern Ireland, where energy prices have risen by some 30%, and the cost of living has also risen by 20%. Does the hon. Gentleman agree that, for that reason, we must support the Lords amendments for the pensioners?

[David Linden]

I will avoid going into energy policy in Northern Ireland, given previous actions, but the hon. Member is right to place that on the record. His constituents in Strangford should be grateful to him not just for making that point but for backing the Lords amendments when we come to the Division.

The Red Book suggests that, by scrapping the triple lock, the Treasury will save £5.4 billion in 2022-23, £5.8 billion in 2023-24 and £6.1 billion in 2024-25. The Chancellor is clearly balancing the books on the backs of pensioners who continue to get a raw deal from a pensions system that they have paid into their whole lives. I caution the Minister that that is an electorally courageous move for a party that has generally enjoyed higher levels of support among pensioners. Indeed, I will be particularly interested to see how our Scottish Conservative colleagues try to sell this latest broken promise to the electorate north of Coldstream.

The SNP wholeheartedly opposes the British Government’s triple lock betrayal and urges the House to support the Lords amendments. There may be a couple of hundred extra MPs in the Division Lobby with us tonight compared with the last time the House looked at this in September, but we know that the Tory Government will use their majority to plough ahead and vote down their lordships’ amendments regardless. My constituents in Glasgow East will therefore conclude once again that the House does not work for pensioners and it certainly does not work for Scotland. The only way to do things differently is with the normal powers of independence, and I suspect that this tawdry Bill will only hasten that cause further.

[Stephen Timms]

In my intervention on the Minister, I asked if it remained the Government’s intention that the value of the state pension should, over time, at least keep track with earnings. He declined to confirm that it did, so it may be that the Government’s policy has changed. Ever since Adair Turner’s pensions report was published in 2006, Government policy has been that the state pension should keep track with earnings, not just with prices as was previously the case. I suppose we must conclude that there has been a change in approach.

--- Later in debate ---

[Guy Opperman]

There is so much that I could reply to; I could genuinely take some considerable time replying to the right hon. Gentleman. Let us start with this. During the last Labour Government, in which time the right hon. Member for East Ham (Stephen Timms), who is a former Pensions Minister, another former Pensions Minister who is in the Chamber, and the right hon. Member for Hayes and Harlington (John McDonnell) were Members, did they in any way link the state pension to earnings? Not on one single occasion over 13 years. It is this Government—the coalition Government and this Conservative Government—who have linked it to earnings.

The right hon. Gentleman talks about the state pension. That is paid for by the working taxpayer on an ongoing basis. The working taxpayer is paying more for the state pension, and it is a larger state pension than ever before; £129 billion is spent—[Interruption.] A hundred and twenty-nine billion. He does not want to hear it, because it is the largest state pension there has ever been. Thirteen years of a Labour Government, and what did they do? They never linked it to earnings. I remember the 75p increase in state pension by Gordon Brown. It is astonishing, the hubris that the right hon. Gentleman comes up with.

The factual reality is that there was never a situation where the Labour Government did anything like the coalition and Conservative Governments did. I asked the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), who represents the Opposition, to come up with a figure. You can search Hansard for as long as you like, Madam Deputy Speaker; answer came there none. There was not a single figure. The factual reality is that the Opposition have no idea how they would approach this, they have not come up with an individual figure, and they are not able to do anything—

[David Linden]

Will the Minister give way?

[Guy Opperman]

I will, for the last time.

[David Linden]

With a view to trying to bring the heat down just a little, let me ask the Minister this. He mentioned the commitment that the triple lock would return next year. Would he be willing to put on the record that, if the triple lock does not return next year, he will resign from ministerial office?

[Guy Opperman]

It is in the Bill that it only lasts for one year. The hon. Gentleman should really read the Bill. It is not that difficult; it only runs to two pages and two clauses.