Social Security and Pensions

John Bercow Excerpts

Tuesday 21st February 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Welfare Delivery (Caroline Nokes)]

I beg to move,

That the draft Social Security Benefits Up-rating Order 2017, which was laid before this House on 16 January, be approved.

[Mr Speaker]

With this we shall consider the following motion:

That the draft Guaranteed Minimum Pensions Increase Order 2017, which was laid before this House on 16 January, be approved.

[Caroline Nokes]

With the leave of the House, and as you have indicated, Mr Speaker, my remarks will cover motions 3 and 4 on the Order Paper. In my view, the provisions in both orders are compatible with the European convention on human rights.

I will first deal with an entirely technical matter that we attend to in this place each year and that I do not imagine we will need to dwell on today. The Guaranteed Minimum Pensions Increase Order 2017 provides for contracted-out benefit schemes to increase members’ guaranteed minimum pensions that accrued between 1988 and 1997 by 1%.

The Social Security Benefits Up-rating Order 2017 reflects the Government’s continuing commitment to increase the basic and new state pension with the triple lock by 2.5%, to increase the pension credit standard minimum guarantee in line with earnings, and to increase benefits to meet additional disability needs and carer benefits in line with prices. The Chancellor reaffirmed this Government’s commitment to the triple lock for the length of this Parliament in his autumn statement on 23 November last year, ensuring that the basic state pension will continue to be uprated by the highest of earnings, prices or 2.5%. This year, the increase in average earnings and the increase in prices were less than the baseline of 2.5%, meaning that the basic state pension will increase by 2.5%. From April 2017, the rate of the basic state pension for a single person will increase by £3 to £122.30 a week. As a result, the basic state pension will be more than £1,200 a year higher from April 2017 compared with April 2010. We estimate that the basic state pension will be around 18.5% of average earnings—one of its highest levels relative to earnings for over two decades.

Last year, the Government introduced the new state pension for people reaching their state pension age from 6 April 2016 onwards, making the system clearer and providing a sustainable foundation for private saving. The Government have previously announced that the triple lock will apply to the full rate of the new state pension for the length of this Parliament. This is the first year that the new state pension will be uprated. As a result, the full rate of the new state pension will also increase by 2.5% this year, meaning that from April 2017 the full rate of the new state pension will increase by £3.90 to £159.55 a week—around 24.2% of average earnings.

We are continuing to take steps to protect the poorest pensioners, including through the pension credit standard minimum guarantee, the means-tested threshold below which pensioner income should not fall. The pension credit standard minimum guarantee will rise in line with average earnings at 2.4%, meaning that from April 2017 the single person threshold of this safety net benefit will rise by £3.75 to £159.35. Pensioner poverty continues to stand at one of the lowest rates since comparable records began.

On the additional state pension, this year state earnings-related pension schemes, the other state second pensions and protected payments in the new state pension will rise in line with prices, by 1%. The Government will continue to ensure that carers and people who face additional costs because of their disability will see their benefits uprated in the usual way, so disability living allowance, attendance allowance, carer’s allowance, incapacity benefit and the personal independence payment will all rise in line with prices, by 1%, from April 2017.

In addition, those disability-related and carer premiums paid with pension credit and working-age benefits will also increase by 1%, as will the employment and support allowance support group component and the limited capability for work and work-related activity element of universal credit.

This Government will be spending an extra £2.5 billion in 2017-18 on uprating benefit and pension rates. With the guaranteed minimum pensions increase order we continue: to maintain our commitment to the triple lock for both the basic and the new state pension for the length of this Parliament; to increase the pension credit standard minimum guarantee by earnings; and to increase benefits that reflect the additional costs that disabled people face as a result of their disability, and carers’ benefits, in line with prices. That includes increases to the disability living allowance, attendance allowance, carer’s allowance, incapacity benefit, the personal independence payment and disability carer premiums.

I commend the orders to the House.