Pensions and Social Security

Debate between David Ruffley and Stephen Lloyd

Thursday 23rd February 2012 Commons Chamber

[Stephen Lloyd (Eastbourne) (LD)]

It is a pleasure to speak in this debate because, unlike my hon. Friend the Member for Bury St Edmunds (Mr Ruffley), I am extremely proud that despite the chronic economic challenges that we face, the Government have uprated by 5.2%. I am what is termed an orange book Liberal, so I am fairly hawkish on the budget, but clearly not as hawkish as my hon. Friend. To me, when things are so difficult and so many people are being squeezed, including those in work, and when people in the public sector, because of the austerity measures, are not getting their salaries uprated, it is even more important that the coalition Government should stick to their guns and uprate pensions by 5.2%. That is laudable. To me, personally, it is even more important that they uprated the disability living allowance and jobseeker’s allowance by 5.2%. I am utterly supportive of the Work programme to get people back into work, but I am bullish about the fact that it is terribly important that people who receive DLA, JSA and so on should receive the additional uprating. It demonstrates the coalition Government’s commitment, which I believe to be genuinely profound, to try to make this as fair as possible, irrespective of the economic challenges.

To be in a position in which we can say that we have uprated pensions by the highest ever figure in, frankly, the worst economic crisis since the great depression, let alone the second world war, is something of which I am very proud and of which the coalition Government should be very proud.

[Mr Ruffley]

Let me be clear: although we all welcome the generous uprating for pensioners, does my hon. Friend, like me, draw a distinction between the uplift for pensioners, which we welcome, and the fact that there has also been a commensurate over-compensation for non-pension benefit recipients relative to the working poor?

[Stephen Lloyd]

I thank my hon. Friend for that question, but I disagree as I think that it is even more important that people in receipt of JSA and DLA at this time, when things are so difficult, are seen, shown and proven by the Government to be in a difficult position through no fault of their own. We want to show that they are entitled to that extra uprate. I appreciate that my hon. Friend and I might differ ideologically on that, but I hope that he accepts that my belief, although it is different, is profound.

On pensions and the £5.30, I remember canvassing in Eastbourne a few years ago when the then Chancellor of the Exchequer had just introduced the 75p rise. Not only were the pensioners I spoke to absolutely incandescent with rage but they did not understand. A lot of the people I spoke to genuinely believed, rightly or wrongly, that the then Chancellor was on their side—I respect that totally—and that is what shocked them. They just could not believe that such a derisory payment could be made. It is therefore very encouraging that at this time, in such an economic crisis, we are sticking to the triple lock and CPI, and doing it at an uprate of £5.30, which is about £21.80 or whatever a month, compared with what it was before.

However, I have some frustrations, which are shared by the hon. Member for Truro and Falmouth (Sarah Newton). It is very hard for the coalition Government to get the information out there about the uprate on disability living allowance. My hon. Friend the Minister knows that I have lobbied fiercely to him personally that that uprate should happen, but as hon. Friends have mentioned today, one would not think from the overwhelming response we have had in our inboxes that we had stuck to our guns on that. I pay tribute to the coalition Government on this issue: they have done the right thing.

On CPI and RPI, I have a lot of time for the right hon. Member for East Ham (Stephen Timms) on pensions generally. He brings a very good and forensic brain to this whole area, and I listened carefully to what he said. To be honest, I think he made some good points. There will be years when the challenge concerning the swapping from RPI to CPI will be greater, but equally there will be years when it is lesser. I know that the Government’s figures are for a 20-year period and that, for the average pensioner, the figure will be equal to £13,000 more, over and above what it would have been with RPI. I am getting so many conflicting details and reports on this, and I have sort of decided that, even though I understand where the Government are coming from with CPI change, we should stand back a wee bit and see how the figures develop over the next few years. Certainly, in the Minister’s wind-up I would be grateful for a little more detail about the pluses of CPI and about the £13,000 figure. I would find that very helpful, as, I am sure, would many of my colleagues on the Liberal Democrat Benches. What I do accept about CPI is that it strips out the mortgage side of things. I totally understand that because, certainly in my constituency, most elderly constituents tend to own their own homes, it is a more accurate and stable indicator. However, I would be grateful for a bit more detail on that.

Finally, and I have to be a bit partisan here, I find extraordinary the Opposition’s blanket opposition to CPI, with no caveats at all, because I know that the Labour party is introducing CPI for all its own staff’s pensions. I am a little confused about some of the rationale there. I know that others want to speak, so let me conclude by saying that I am delighted by the move on pensions regarding the triple lock, which the Minister will know was one of the Liberal Democrats’ key manifesto promises at the election. I am equally delighted that we stuck to our guns on that issue. There was quite a lot of battling and lobbying inside Government, as one would expect in a coalition, but it was all done with great courtesy. I am delighted that the 5.2% is not only in relation to pensions but is also for some other benefits, such as DLA, jobseeker’s allowance, carer’s allowance and attendance allowance, as I have already discussed.

We in the coalition are determined to get through this mess with the robust austerity programme. I entirely concur with my hon. Friend the Member for Bury St Edmunds on this. It is the only way we can get through this; otherwise, the bond markets would kill us—we both know that—and that would ramp up interest rates. I am delighted that despite all the challenges, we are trying profoundly, and well and as fairly as we can, to ensure that everyone in the country has to step up to the plate. That means that, yes, we have the Work programme for people who are out of work, but it is also about trying to ensure that people in that situation get a good uprate. That demonstrates that when it comes to the facts, by contrast with the hyperbole one sees in the media, the coalition Government are determined to do things right and fairly.

Thanks to the decision on these upratings, this is one of the times since I have been elected that I have felt genuinely proud to be a Member on the coalition Government side. I really mean that. That decision is entirely commendable and I look forward to hearing the Minister’s response.