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Mr. David Gauke (South-West Hertfordshire) (Con):
On a point of order, Mr. Speaker. Yesterday, my hon. Friend the Member for West Chelmsford (Mr. Burns) raised with you the case of a parliamentary question to which the answer was provided to a journalist before it was provided to him. This morning, we have heard, including from my right hon. Friend the Member for Maidenhead (Mrs. May), that the date of the Budget was announced and released to the press before this House was informed. Given that you are making inquiries in the case involving my hon. Friend the Member for West Chelmsford, would you also look at
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this matter as an example of how the Government are releasing information not to this House first, but to the press?
Mr. Speaker: I think that it is important that a Minister of the Crown comes to the House as soon as possible with that particular date. This has happened, and I see no breach of the rules in this case.The other matter that the hon. Gentleman raises is still subject to an investigation by me, and I will be getting back to the House.
Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Racial and Religious Hatred Act 2006
European Union (Accessions) Act 2006
Terrorism (Northern Ireland) Act 2006
Mr. Secretary Hain, supported by The Prime Minister, Mr. Chancellor of the Exchequer, Mr. Secretary Straw, Mr. Secretary Clarke, Secretary Alan Johnson and Mr. David Hanson, presented a Bill to make provision about registration of electors and the Chief Electoral Officer for Northern Ireland; to amend the Northern Ireland Act 1998; to make provision about donations for political purposes; to extend the amnesty period for arms decommissioning in Northern Ireland; and to make miscellaneous amendments in the law relating to Northern Ireland. Explanatory notes to be printed [Bill 131].
The Minister for Pensions Reform (Mr. Stephen Timms): I beg to move,
That the draft Social Security Benefits Up-rating Order 2006, which was laid before this House on 25th January, be approved.
Mr. Speaker: With this it will be convenient to take motion 3 on the Order Paper:
That the draft Guaranteed Minimum Pensions Increase Order 2006, which was laid before this House on 25th January 2006, be approved.
Mr. Timms: I am satisfied that the orders are compatible with the European convention on human rights.
The uprating order will, as usual, increase most national insurance benefits by the retail prices index, which is 2.7 per cent., and increase most income-related benefits by Rossi, an index that excludes rent, mortgage interest, council tax and depreciation, which is 2.2 per cent.
The Guaranteed Minimum Pensions Increase Order 2006 deals with contracted-out occupational pension schemes and guaranteed minimum pensions that accrued between 1988 and 1997 and provides for an increase of 2.7 per cent.
David Taylor (North-West Leicestershire) (Lab/Co-op): I declare an interest as a member of such a scheme, although I have not reached state retirement age and therefore would not benefit from the guaranteed minimum pensions element. Does the Minister believe that the RPI is still the appropriate measure for uprating the GMP element, not least because beneficiaries have a different index profile, in that they spend more of their income on heating and other elements of daily costs, which would significantly boost the RPI figure?
Mr. Timms: My hon. Friend has raised an interesting point. I think that the RPI is the right basis on which to proceed, but the national pensions debate is under way and he may want to raise that point in the discussion.
The order adds nearly £3.5 billion to Government spending. It tackles poverty by helping those most in need and supports our ambitious programme to renew welfare and pensions. Since 1997, we have taken decisive measures to address the pressing problems that we inherited. Through winter fuel payments, free TV licences for over-75s and basic state pension increases, we have helped all pensioners. From April 2006, the basic state pension will be £84.25 for a single person and £134.75 for couples, which is a real-terms increase of 8 per cent. since 1997. By targeting extra resources on the least well-off, in particular through pension credit, we have taken nearly 2 million pensioners out of absolute poverty.
The pension credit guarantee will rise in line with earnings so that even the least well-off pensioners can share in Britain's rising prosperity. From April, no single pensioner need live on less than £114.05 a week, and no couple need live on less than £174.05 a week. In
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1997, many pensioners were living on £69 a week, which was a shameful legacy of poverty that we must never allow to return.
Mr. Graham Stuart (Beverley and Holderness) (Con): Is the Minister comfortable with the fact that, according to Government figures, about 1.5 million pensioners are not claiming their due pension credit? NGOs that specialise in looking after older people have suggested that the poorest and most in need are not getting the pension credit. Will the Minister re-examine his claim in that light?
Mr. Timms: We continue to be extremely active in promoting the take-up of pension credit. There has been a large increase in take-up since pension credit succeeded the minimum income guarantee, and it is clear that those who stand to gain the most from it are now overwhelmingly in receipt of it. The hon. Gentleman is right that a significant number of peoplein particular, those who are entitled to the saving credit onlyare not yet in receipt of it, which is why we have introduced a big programme of targeted mail shots and home visits to ensure that people take up their entitlement.
Mr. Nigel Dodds (Belfast, North) (DUP): The Minister has mentioned the winter fuel allowance. People are grateful for the £200, but it has been stuck at that level for six years. When will it be increased to take account of the RPI or inflation?
Mr. Timms: I cannot announce an increase in the winter fuel allowance. When the allowance was introduced, it was at a much lower level, and, as the hon. Gentleman said, people find it helpful.
As a result of changes since 1997, we will spend some £10 billion extra on pensioners in 200607, almost half of which will go to the least well-off third of pensioners. If we had merely increased the basic state pension in line with earnings, the least well-off third of pensioners would be on average £30 a week worse off. Today, we are in an almost unprecedented position in which pensioners are no more likely to be poor than any other group in society. We have succeeded in breaking the historic link between being old and being poor, an achievement that I hope that hon. Members on both sides of the House will celebrate.
We have made other important changes to pensions policy since 1997. We have set a framework within which there are personal pension products that are economic for people on low and medium incomes. We have improved the coverage of the state second pension, which includes carers for the first time and, through the Pension Protection Fund, we have provided protection for occupational defined benefit schemes.
We must build on the progress so far and meet two significant challenges around pensioner incomes. First, demographic changes mean that by 2050 there will be two people of working age for every pensioner compared with 10 people for every pensioner 100 years ago. The current figure is about four. Secondly, we need
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to address the extent of under-saving. The Pensions Commission has calculated that nearly 10 million people are not saving enough for their retirement.
Mr. Philip Hollobone (Kettering) (Con): I appreciate the nobility of the Government's aim of improving pensioner incomes, but does the Minister understand the concerns of thousands of pensioners in my constituency who see the system as a disincentive to save? The system also sends the message to the younger generation that they need not save because the state will look after them in their retirement.
Mr. Timms: I am glad that the hon. Gentleman recognises the nobility of the Government's aim and hope that he also recognises the nobility of the Government's achievement in breaking the historic link. The question of incentives for saving lies at the heart of the Turner commission report and the national pensions debate, which is currently under way. The report and the debate give us the chance to build a consensus for an enduring pensions settlement. That is our aim and I hope that the hon. Gentleman and other Opposition Members will be part of it. Consensus is very important, because we need a pensions settlement that will stand the test of time and not be pulled apart by successive Governments.
Later this month, industry groups will present their alternatives to Lord Turner's national pensions savings scheme. On 18 March, which is national pensions day, more than 1,000 people will meet in six cities across the country to consider the choices and options in the Pensions Commission report. I look forward to welcoming Opposition Members to that programme and we will debate and scrutinise the different ways to achieve the objectives set out by the commission.
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