Social Security (Up-rating of Benefits) Bill

Lord Loomba Excerpts

2nd reading
Tuesday 13th October 2020 Grand Committee

[Lord Loomba (CB) [V]]

I congratulate the noble Lord, Lord Field of Birkenhead, and the noble Baroness, Lady Stuart of Edgbaston, on their maiden speeches. I am particularly pleased that they both support issues relating to poverty, women, children and modern slavery, as these issues are very close to my heart.

Coming on to the Bill, it is important as it gives support to some of the most vulnerable in our society: those relying on state pensions to survive, with many of them enduring hardship. The Government’s commitment to the triple lock is admirable, ensuring that they stick to their manifesto commitment to an increase in pensions by the rate of wage increases, inflation or 2.5%, whichever is the highest. It is also admirable in helping those in our society who are not able to go out to get a better job or work harder for a pay rise.

Pensioners can often see their income decreasing when costs, prices and basic needs rise faster than their income allows, especially those in receipt of pension credit. We have seen pensioner benefits decrease in all sorts of ways, such as the move to make the BBC responsible for its licence fee, which has now resulted in many pensioners losing their entitlement to it. I support the Bill for those reasons, and—here I declare an interest as chairman, founder and a trustee of the Loomba Foundation—because it ensures an increase in pensions for widows and widowers who have lost a loved one in an industrial incident and are entitled to survivor benefits.

The Bill is needed because the 1992 Act does not allow for the circumstances we are now facing. The Government at the time did not foresee a time when wages might not rise, so the 1992 Act is, in effect, useless in providing for pensioners facing today’s world, as it does not permit an uprating if wages or prices do not increase—an increase that would stop many pensioners falling below the breadline. It demonstrates that the Act is not fit for purpose in the 21st century.

We have had a review of working practices and how the gig economy is driving the way that workers are paid and, in turn, how they pay their taxes. The 1992 Act was introduced when the economy was in a very different place. Now, as we see huge changes in how people work, maybe it is time to consider a review of pensions and to align them better with the way of the world as it is now. In the future, many people might find themselves without recourse to a state pension in their old age, as they will have spent their working lives living on meagre earnings, unable to pay into a pension, with no employer pension, and not entitled to the state pension either.