CPI/RPI Pensions Uprating

Debate between Guto Bebb and Gregg McClymont

Thursday 1st March 2012 Commons Chamber

[Gregg McClymont]

The hon. Lady’s desire to write the Labour party manifesto three years before a likely general election is admirable, but I cannot advance on the answer I gave to the hon. Member for Gloucester.

Whether CPI is an accurate measure of inflation is an issue—the hon. Lady made important points on heating and housing—but in the few minutes remaining, I want to raise some broader questions. We can talk about CPI or RPI pensions uprating in isolation. The uprating of the state pension using CPI, which happened for the first time this year, is one thing, but as was indicated in the debate, the flat-rate, single-tier state pension, to which the Minister is committed, is important to the debate, as is the future of NEST.

I do not want to misquote the hon. Member for West Worcestershire (Harriett Baldwin), but I believe she said that she was looking forward in the Queen’s Speech to legislation on a single-tier, flat-rate state pension. The Opposition are hopeful that the Minister can move in that direction quickly. I wonder whether the Treasury has a significant role in that. Perhaps negotiations must continue before we can get there. The Opposition will be keen to consider very closely such proposals when they come to the House.

NEST, which has been mentioned throughout the debate, has a huge role to play in moving towards a more sustainable pension system. The Opposition are disappointed at the delay in the staging dates for the move to auto-enrolment. It is not just a question of the companies: contributions from both the Treasury and employers will be lost for those saving into a pension for the first time.

Finally, the hon. Member for Aberconwy emphasised the private pension system. Both he and the hon. Member for West Worcestershire suggested that all the difficulties in the private pensions world have arrived since 1997.

[Guto Bebb]

indicated dissent.

[Gregg McClymont]

I think that is what the hon. Gentleman suggested, but it is far more complicated than that. There are significant issues with the private pension system, a significant number of which can be traced to other Governments and the shift from occupational pensions to group personal schemes—my hon. Friend the Member for Islington North (Jeremy Corbyn) mentioned 1986.

In the spirit of wanting to create a better pension system, I must be clear that we cannot support the switch to CPI as a permanent measure given the impact of that on so many pensioners and future pensioners. I thank my hon. Friend the Member for Hayes and Harlington for securing this debate.