Social Security (Up-rating of Benefits) Bill

Debate between Lord Hendy and Baroness Sherlock

Report stage
Tuesday 2nd November 2021 Lords Chamber

[Lord Hendy (Lab)]

My Lords, it is a pleasure to follow my noble friend Lady Blower. I support all the amendments that have been advanced today because they all have the object of protecting the level of state pensions. I particularly support Amendment 6, moved by my noble friend Lord Sikka.

I apologise that I was out of the country last week and so missed participation in Committee. However, I hope noble Lords will allow me to develop a short point that I made at Second Reading. Because, as a Member of your Lordships’ House, I have endeavoured to restrict my participation to the issues that arise from the rights and interests of workers, I want to emphasise two reasons why the state pension is of such concern to workers. The first is that pensions are the deferred wages that workers effectively earned while they were able to work. Once retired, their capacity to earn from their labour is exhausted and pensions are essentially what sustains them. Low earnings lead to low pensions, and the pay gaps manifested in earnings are duplicated in pensions—the gender pay gap in particular, but also differentials based on ethnic origin and disability.

The impact on pensioners of the failure of pensions to keep up with the costs that they face—as noble Lords and, in particular, noble Baronesses have pointed out—will be profound. Some 25,000 of our elderly already die of the cold each year, 2 million live in poverty and 1.3 million do not get enough to eat. Life expectancy is falling in the areas with the greatest poverty.

That leads to my second point. The second reason why present pensions are also of concern to those who are currently in work is this: my noble friend Lord Sikka reminds us that the Government estimate that, by the removal of the triple lock, they will save £5.4 billion from pensioners in the year 2022-23 and some £30.5 billion over five years. That is money that, were it left in the purses and pockets of pensioners, would be spent on food, clothing, heating, rent and so on. Pensioners’ incomes are spent in their local economies. There they help to sustain the jobs of current workers, particularly in shops and local services. Make no mistake: more high street shops will close and more jobs will be lost from the failure to maintain the triple lock, and it will hit the poorest areas the hardest. The impact may be indirect but the ending of the triple lock will affect current earners as well as current pensioners.

The Minister, who is rightly respected because of her sensitivity to the plight of the less well-off, knows that well. She was kind enough to write to me and other noble Lords after Second Reading explaining her position, but her Government have no answer to the two essential points made in the debates today. The abolition of the triple lock will mean that poor pensioners and the poorest local economies in the country will be made yet poorer. Such outcomes are far from necessary, as my noble friend Lord Sikka has repeatedly demonstrated through the progress of the Bill. I therefore support his amendment and all the others that seek to salvage something from the wreckage.

[Baroness Sherlock (Lab)]

My Lords, I thank my noble friend Lord Sikka for introducing his amendment, and all noble Lords who have spoken.

As I have said previously, many of us around this House share an underlying concern about the living conditions of pensioners, especially poorer pensioners. We have had lengthy debates about pensioner poverty in Committee and in debating my Amendment 5, so I am not going to revisit the issue at length at this stage of the Bill. However, I am pleased that the Government have agreed to publish information about the impact of the Bill, which I hope will help us to press the case for a fresh assault on the growing problem of pensioner poverty.

I explained in earlier debates our stance on uprating and what we think is the right way forward. We do not believe the Government have presided over earnings growth of 8%, much as they would like us to think they have. We think they should find a way to deal with the earnings data distortion caused by the pandemic and look for a way forward that maintains the earnings links and uprating and fulfils their manifesto commitment to a triple lock. That is the right way forward.

There is an additional issue in how this amendment is framed. The elected House has voted for the Bill and, since it has only two clauses and Clause 2 is simply the commencement, extent and name of the Bill, to delete Clause 1 would effectively completely eviscerate the Bill. I understand how strongly my noble friend feels about this issue; we all feel strongly. The question is not what we want to happen and what we think is the right thing but how this House can best achieve a result for those who most need our help.

So although we cannot support my noble friend’s amendment, that does not in any way mean that I believe the Government have got this right; I really do not think they have. That is why we on these Benches are very happy to throw our weight behind the amendment that is going to go back to the Commons and make them look at this issue again. I urge the Government to find some way in which they can fulfil their manifesto commitment, maintain that earnings link and make sure that people out there get the uprating that they need. I hope the Government can do that.