Pensions and Social Security

Sarah Newton Excerpts

Thursday 23rd February 2012 Commons Chamber

[Stephen Timms]

The point I am making is that if the RPI method were in place for the coming year, the increase would be larger than the one in the order before us today.

[Sarah Newton (Truro and Falmouth) (Con)]

I acknowledge the right hon. Gentleman’s deep knowledge of this subject, but he is not giving the House an entirely accurate picture. For the longest period, the state pension was linked to average earnings, but it suits his argument today to make a comparison with RPI. The huge benefit of the triple lock is that it provides a choice. Average earnings could be taken into account, for example, and if they grew between 6% and 7%, so would pensions. Also, there is always the floor of 2.5%, which would prevent a repeat of the disgrace of giving pensioners 75p, as happened under the last Government.

[Stephen Timms]

I thank the hon. Lady for her generous remark. There is some merit in having an earnings underpin to the system, but I say again that, for the year ahead, RPI would give a higher increase than the triple lock has delivered. That was the case last year as well, which is why the Government set the triple lock aside in the first year it was supposed to be in place. This year, the difference is much smaller, at 0.4%, and the Government must be hoping that people will not notice that the triple lock is delivering less than an RPI uprating would have done. However, in principle, having an earnings underpin as well is entirely helpful.

[Sarah Newton]

But does the right hon. Gentleman not see the benefit for pensioners and the wider economy of the certainty provided by the triple lock? People can now plan for their retirement, and the Exchequer can plan for the economy.

[Stephen Timms]

It is not clear what the degree of certainty is. As I have said, the triple lock was overridden last year because it would have given such a low rate of uprating. This year, it has been applied because there is not much difference between RPI and the triple lock. So no, I do not think that any kind of rock-solid certainty has been introduced; the triple lock was waived the first time it was supposed to be put in place.

--- Later in debate ---

[Sarah Newton (Truro and Falmouth) (Con)]

It is a great pleasure to be able to speak in the debate, and it saddens me that I to have to begin my speech with the comments that I am about to make.

During yesterday’s debate—I sat through most of it, and have read the Hansard report—we were subjected to hours and hours of party political point scoring, with barely a mention of patients. Today, too, we have heard very partisan comments. Rather than constructive opposition or suggestions of what the Opposition might do to help the Government tackle the difficult issues that we face, we have simply heard opposition for opposition’s sake. A great many criticisms and partisan points have been made, but we have been given no real indication of what the Opposition would do.

That is not just saddening for me, but very annoying and upsetting for the hundreds of thousands of people who sent us here, and sent us here at a time when our great nation is in great peril. We have inherited a dreadful economic legacy, and we are facing huge changes in the way the world is operating. All that requires a Government with terrific purpose, who are able to govern for the common good and deliver the huge changes that we need now and in the future.

The fact that our two parties have come together in a coalition has prompted many sneers and giggles from the very few Opposition Members who are present to take part in this important debate; but we have come together, and we are facing up to those challenges. It is true that we must make some very difficult decisions, but I believe that those decisions are underpinned by exactly the right principles of fairness. We as a Government are trying to live within our means, and not to spend more public money than we take in taxes. It is necessary for us to make decisions about who is to receive the money that we have, and we are clear about the fact that we want the most vulnerable people in our society—those who need it most—to receive that money.

Like every other Member in the Chamber, I know that many hard-working families in both the public and the private sector are suffering a terrific squeeze in their incomes. There are people who have experienced pay freezes, if not pay cuts, and people who are losing benefits. I know that the difficult decisions that we have had to make will affect a large number of those hard-working families, but I also know that they have elderly relatives and neighbours and want to see a Government who will do the right thing for the elderly people in our society. Tough choices are having to be made—awful decisions about child benefit, child tax credit and working tax credit—but I believe that those families will be pleased that we are standing up for our principles, and ensuring that people living with disabilities and that elderly relatives are given a decent rise in their pensions.

I agree with some of the comments that have been made. I am not doing cartwheels. People living on a state pension, even those receiving pension tax credits, are not living in the lap of luxury; that is a modest income for many people. However, I am proud to be part of a Government who are increasing benefits in a way that will enable people to enjoy a decent standard of living.

We have discussed changes relating to the cost of heating homes. I have a great deal of sympathy with the Members representing parts of Northern Ireland who have spoken today. Like Cornwall and other rural parts of the United Kingdom, Northern Ireland contains a huge number of people who are off grid. Nevertheless, there is a constant and very upsetting misrepresentation of the Government’s policies on dealing with the important issue of fuel poverty and the excess winter deaths that go with it. With your indulgence, Madam Deputy Speaker, I will tackle that, because such comments—which have been made persistently today—engender a huge amount of fear among the many pensioners and their families who listen to our debates.

It is true that there have been changes in the winter fuel allowance, but there is also the warm home bonus of £120. The Government have made money available for innovative projects, and I want to spend a bit of time telling the House about a project in Cornwall, the healthy living programme, for which the Department of Health has provided money this winter. Members of housing authorities, Cornwall council and social services departments, GPs, Age UK and a range of other charities are working in partnership, targeting the families—many of them elderly—who are at the greatest risk of suffering badly as a result of the cold weather this winter, and making sure that all available help is provided.

As we all know from our constituency work, hundreds of millions of pounds of benefits are out there for the most vulnerable people, but those are often the people who are least likely to avail themselves of benefits, whether they take the form of actual cash benefits from the Department for Work and Pensions, free insulation, or advice and information. The members of that group in Cornwall are doing highly effective work to ensure that now, this winter, the help that is available is reaching those who need it. I am very pleased that Ministers from the Department are coming down to Cornwall to meet them, and to observe at first hand the way in which, with the assistance of relatively modest sums—our grant was £140,000—team work, thinking outside the box and doing things differently is saving people’s lives and contributing to the quality of life this winter.

[Dr Whiteford]

Obviously I cannot speak for the Northern Ireland Member who raised the issue pertaining to his constituents, but as I represent a rural constituency in which people pay excess prices for their fuel and often have no access to social tariffs, I am very concerned about that as well.

The underlying issue, which I raised with the Minister, is that older people and people with disabilities who spend a lot of time in their houses are increasingly more affected by inflation than those of us who spend most of our day outside our homes. Both the Office for National Statistics and the Institute for Fiscal Studies have pointed out that older people experience inflation at a higher rate than the rest of us, as do people on low incomes. The evidence is there. What concerns me is that CPI does not measure accurately the actual experience of people’s costs, which are higher than either CPI or RPI—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I remind the hon. Lady that she is making an intervention, not a speech—yet.

Before the hon. Member for Truro and Falmouth (Sarah Newton) resumes her own speech, may I point out to her that we are discussing uprating orders, not projects in Cornwall, however fantastic they are. She must make her speech relevant to the uprating orders, not to future grant applications for very worthy projects in her constituency.

[Sarah Newton]

I entirely take those points on board, Madam Deputy Speaker. I hope that the House will forgive my enthusiasm for the excellent work that is being done in my constituency. I will now confine my comments to the subject of the debate, but I beg your indulgence, Madam Deputy Speaker: I should like to respond to the comments made by the hon. Member for Banff and Buchan (Dr Whiteford) by touching slightly on the issue of the costs of heating a home. They are part of the cost of inflation, which obviously has something to do with the pension upratings.

As the Minister has acknowledged, it is difficult to come up with a measure that truly reflects the costs of individual households. People with disabilities and pensioners will often be at home for many more hours in the day than other people, and will also need to keep their homes warmer, because as people age their bodies are less able to regulate temperature. That is a well-known fact. However, I feel that the efforts that the Government are making, and especially the move towards flat-rate pensions of £140 a week, will start to provide people with a reliable amount of income with which they will be able to afford to heat their homes.

A huge problem at present is that people do not claim benefits that could make a real difference to them. Pensioners are the people who most need the benefits, but they are also least likely to claim them. That applies particularly to the group to whom the hon. Member for Banff and Buchan referred—people in their eighties. Theirs is a proud generation, a generation that has fought and lived through the war and we owe them a great deal. They are very stoic and very proud, and they find it difficult to apply for the benefits to which they are entitled. I think we all have an important job to do in speaking with one voice and saying to people of that generation that they have earned the right to claim those benefits. There should be no stigma, and we must make it as easy as possible for them to claim. I urge anybody who knows an older person whom they feel may be struggling to make sure they are claiming the benefits to which they are entitled. The Government have been doing a lot to simplify the application process and to make information more widely available, and there are also wonderful charities and organisations, including the National Association of Citizens Advice Bureaux, that are doing just that.

I am very proud to support the Government on these measures. There has long been great uncertainty about what will happen to the state pension. With the upratings and the triple lock, there is now certainty. There is a commitment to making the state pension the cornerstone of planning for retirement. As the Minister said, we cannot right the wrongs of the last decade in one fell swoop, especially as we are facing the most difficult financial situation in a generation, but the message that today’s measures and commitment send out is that people can plan for the future as they can have confidence in respect of their pension. That is very important.

The right hon. Member for East Ham (Stephen Timms) rightly said that we should consider the upratings in a broader context. I had the great privilege of serving on the Welfare Reform Bill Committee, and I think his description of the broader context of how we are supporting pensioners was not sufficiently generous. What is of most importance for pensioners and their families is both having enough income to live on and the safe knowledge that there will be an NHS for them when they need it. Elderly people are far and away the largest users of the NHS, and it is hugely helpful to them that this Government committed not to cut NHS expenditure—whereas the Labour party said it would do that, and would have done so in this Parliament. The fact that we are finally linking social care and the whole range of other services that elderly people and their families need to be able to have the quality of life and independence they want—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We are talking about pensions and benefits uprating. We are not having a wider debate on all the Government’s policies. The hon. Lady must refer specifically to the measures discussed by the Minister when introducing this debate.

[Sarah Newton]

The shadow Minister, the right hon. Member for East Ham, referred to the wider context of these measures, and I was merely responding to his comments. I shall, however, now desist from referring to the range of policies that the Government are putting in place to support elderly people and their families.

I support the Government’s measures. They constitute a huge step in the right direction and I am very proud that my Government are honouring their commitment and delivering a decent level of income for pensioners and people living with disabilities in retirement. I urge Opposition Members to desist from misrepresenting what the Government are doing, especially for people with disabilities and pensions, as that is creating fear and anxiety. That is why there are 100,000 signatories to the petition. If the people who signed it knew the truth, they would not have done so. It makes me very angry that people are contacting me because they have been needlessly frightened by Opposition scaremongering that, somehow, the Government are going to take away the benefits for disabled people and slash the benefits for pensioners. As the Minister has made clear today, nothing is further from the truth.

Let us have a constructive Opposition. The people of this country want a constructive Opposition who join the Government in tackling the difficult decisions of the day. They want the Opposition to stop this dangerous party political point scoring.

--- Later in debate ---

[Sarah Newton]

indicated dissent.

[Katy Clark]

The hon. Lady may shake her head, and she has spoken about many aspects of Government policy, but she must be aware that the cumulative effect of the policies that her Government are pursuing is to take money out of the pockets of some of the poorest and the most vulnerable in this country, and out of some of the most deprived communities. That is the wrong economic policy, it will not lead to growth and it clearly is not the policy we need for social justice. It is one reason why the gap between rich and poor is increasing so greatly at the moment.

The hon. Lady spoke about Labour manifesto policies, but the Conservative party gave assurances before the election that it had no plans to change the current index-linking of pensions. The Liberal Democrats also said that they regarded index-linking rights as protected. No doubt they will say, “We opened the books and everything was very different”, but the point I am making is that these measures will have long-term cumulative impacts that will hurt the poorest and most vulnerable in society.

[Sarah Newton]

I completely disagree with the suggestion that we are targeting the most vulnerable people, but my question to you is: can you remind the House what happened to the gap between the richest and poorest people in this society under Labour?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I would love to answer that question, but I am prevented from doing so. The hon. Lady knows that she is not supposed to address the Chair in that way. In responding to her point, I hope that the hon. Member for North Ayrshire and Arran (Katy Clark) will come back to discussion of the uprating order.