Social Security and Pensions (Statutory Instruments)

Robin Walker Excerpts

Monday 9th February 2015 Commons Chamber

[Steve Webb]

Let me first deal with what is an entirely technical matter that we attend to each year and that I imagine we will not need to dwell on today. The Guaranteed Minimum Pensions Increase Order 2015 provides for contracted-out defined-benefit schemes to increase their members’ guaranteed minimum pensions that accrued between 1988 and 1997 by 1.2%.

I should like to turn now to the Social Security Benefits Up-rating Order 2015—and as we are about to spend nearly £3 billion of taxpayers’ money it is good to see that the Opposition Benches are packed. As you will be aware, Mr Deputy Speaker, we are not here to discuss the Welfare Benefits Up-rating 2015 Order, which was made on 14 January. The 1% increases in that order were debated in Parliament during the passage of the Welfare Benefits Up-rating Act 2013.

Let me begin with the basic state pension. Despite the difficult economic situation, this Government remain committed to protecting those who have worked hard all their lives. This is why we have stood by our triple lock commitment: to uprate the basic state pension by the highest of earnings, prices or 2.5%. This year, as the increase in average earnings and the increase in prices were less than 2.5%, the basic state pension will increase by the full 2.5%; that is twice the increase in prices and four times the increase in earnings, which is the minimum required by law. So the earnings increase is what we are required to do by law, and we are increasing the state pension by four times that amount. Occasionally we have had debates about the triple lock and Labour has queried whether it actually bites. In a year like this, it really bites. There is a substantial increase in the state pension—far more than inflation or the growth in the average wage.

[Mr Robin Walker (Worcester) (Con)]

I congratulate my right hon. Friend on the work he has done on this issue. Can he confirm that this approach means the average pensioner will be up to £560 better off during the lifetime of this Government as a result of not using earnings but using this triple lock?

[Steve Webb]

I can, indeed. It is unclear what the previous Government would have done if they had carried on. As far as we know, they would have used the retail prices index until 2012 and then earnings probably from 2012. That is our best guess as to what they would have done, and that would have resulted in a pension of, as my hon. Friend says, more than £10 a week less than we will be paying.