Social Security (Up-rating of Benefits) Bill

Baroness Laing of Elderslie Excerpts

Consideration of Lords amendments
Monday 15th November 2021 Commons Chamber

Consideration of Lords amendments

[Madam Deputy Speaker (Dame Eleanor Laing)]

I must draw the House’s attention to the fact that financial privilege is engaged by both Lords amendments. If the House agrees to either Lords amendment, I shall ensure that the appropriate entry is made in the Journal.

Clause 1

Up-rating of state pension and certain other benefits following review in tax year 2021-22

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I beg to move, That this House disagrees with Lords amendment 1.

[Madam Deputy Speaker]

With this it will be convenient to consider the Government motion to disagree with Lords amendment 2.

[Guy Opperman]

The Social Security (Up-rating of Benefits) Bill is a one-year Bill by reason of the pandemic. Last year, as you will be aware, Madam Deputy Speaker, we changed the law for one year to increase state pensions by 2.5% at a time when average earnings had fallen and consumer price inflation had increased by half a percentage point. If we had not taken this action, state pensions would have been frozen.

This year, average earnings growth is estimated to be unusually high, distorted by the cumulative effects of a natural economic reaction to the coronavirus pandemic and the response to the supportive measures introduced by the Government to protect livelihoods. The figure for average weekly earnings from May to July—the measure used for uprating earnings-linked benefits—has grown at 8.3%, which is over two percentage points higher than at any time over the past two decades. Recognising this covid-related distortion, the Government are setting aside the earnings link for one more year, 2022-23, and continuing the double lock of at least inflation or 2.5%. The triple lock will be applied again in the usual way for the basic and new state pensions from the following year.