Finance (No. 4) Bill

Julie Hilling Excerpts

Thursday 19th April 2012 Commons Chamber

[Rachel Reeves]

The idea that pensioners have been protected from the squeeze on living standards is simply not true. It is divisive and distorts reality when Government Members try to make that point, and conceals the fact that many older people are under genuine pressure. We should do what we can to help them, not see pensioners as a soft target for stealth taxes, as the Chancellor so clearly does.

[Julie Hilling (Bolton West) (Lab)]

The increase in pensions has not actually kept up with the cost of living, because if the Government had not been so mean as to change to CPI, but had used RPI, pensioners would have an amount of money that kept in touch with the increasing cost of living.

[Rachel Reeves]

I thank my hon. Friend for that intervention. All hon. Members know that the average rate of inflation for pensioners is often very high—higher than it is for ordinary families—because they spend more of their income on gas, electricity and food, the rates of inflation for which are going up at a higher rate.

--- Later in debate ---

[Charlie Elphicke]

On the contrary, I am really delighted that we have delivered on the pensions triple lock guarantee. Some hon. Members might recall that back in April 2000—it was a long time ago so perhaps the hon. Lady has forgotten—the basic state pension rose by 75p. That was the kind of care and concern we saw for pensioners from the Labour party, whereas the Conservative party is ensuring that we have the highest ever increase in the basic state pension, in cash terms, of £5.30 a week.

[Julie Hilling]

I thank the hon. Gentleman for giving way because he makes this link between the 75p increase, which did not go down well at the time but was based on inflation, and this increase, which is of course also based on inflation. Pensioners will get no benefit whatever—no increase in their pension—from this amount. It simply compensates them for the rate of inflation. In fact, they will lose out because it is based on the consumer prices index, not the retail prices index. For most pensioners, the inflation they feel is much closer to RPI; indeed it is above that because of the way their expenditure has to be made.

[Charlie Elphicke]

The hon. Lady forgets that the way the triple lock works involves not just inflation but earnings. At the moment, earnings are not rising at a great rate of knots because of the massive economic mismanagement of the Labour party that this Government are trying to put right, and that is not being assisted by the chaos in the eurozone. Over time, however, earnings will outstrip inflation and I suspect that will happen in the latter part of this year, so that has a bearing on age-related allowances.