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In wealth terms, according to the recent report on inequality, those in the 10th percentile now have 96 times the wealth of those in the 90th percentile. That is the kind of sick society that we are living in. Some in this society, as we have been reading, continue to get huge bonuses. We are arguing about a pension going up £2.40 a week. That will not buy a pint of beer in London and will barely pay for a decent coffee. We need to look at the actual figures, not just the percentages. Jobseeker's allowance is going up from £64.30 to £65.45, which is an increase of £1.15. I wonder how many of us could live on that, given that our salaries are about 19 times that amount. The Minister said that we need to be balanced about the costs. She said that the cost is about £2 billion, yet Trident submarines cost about £100 billion, so where is the balance in that? She also said that there needs to be an incentive to work, but perhaps that just shows that the minimum wage is far too low and needs to be part of the equation, instead of being lost somewhere else.
The hon. Member for Eastbourne (Mr. Waterson) talked about bribes and, presumably, referred to those same increases of £2.40 a week and £1.15 a week, but I just wonder what he would do for a bribe of £2.40 or £1.15-not very much, I suspect. We are disappointed that the deferred pensions are not being increased. The increases before us are not satisfactory, but anything is better than nothing.
Mr. Mike Weir (Angus) (SNP): My hon. Friend mentions the deferred pensions, but there is an issue of fairness, because a constituent came to see me about that very issue and made the point very clearly that, when she agreed to defer her pension, she was promised-in documentation that she was given and which she showed me-that it would be increased annually, along with the basic pension. The Government have broken that promise. Does my hon. Friend not agree that that is unacceptable?
Angela Eagle: Before the hon. Gentleman gets himself too worked up, will he at least admit that the legal underpinning is that the benefits should be uprated by the retail prices index? For the first time in 50 years we had a negative RPI, so the default issuance would have been zero. Given that we have been able to do better by spending £2 billion extra in tough economic times, will he at least acknowledge that we have done what we can to protect the vulnerable in very difficult circumstances?
John Mason: I should have answered the first intervention before I took the second one, but the point remains that the deferral was promised but not provided by a Government who have a large majority and can push through such measures if they really want to. I accept the Minister's point that the Government have done more than they are legally required to do, but the whole point about my brief comments is that we should not get lost in the small percentages; we need to look at the bigger picture and the pitiful amount on which many pensioners in this country have to live when others are fabulously wealthy.
Steve Webb: I am very grateful. The hon. Gentleman is such good value that I want him to keep going. The hon. Member for Angus (Mr. Weir) put his finger on a very important point, because people have deferred the basic state pension. If I chose to defer my basic state pension, I would expect indexed increments on it, but, if the basic state pension is indexed and the deferral is not, surely that is inconsistent, if not challengeable.
John Mason: Yes, I completely agree that it is inconsistent, and, as my hon. Friend says to me from a sedentary position, the Government, as others have said, are saving money with this measure. However, I think that I have made my point, and I am happy to leave it at that.
Justine Greening (Putney) (Con): I had not planned to contribute to the debate, but, having listened to contributions from both sides of the House, I want to make a few remarks in a brief contribution of my own.
Whatever the misgivings of some hon. Members, voting against the motion at some point would be excessively short-termist in outlook. There is a 1.5 per cent. rise this year, but, as my hon. Friend the Member for Eastbourne (Mr. Waterson) said, there is also a cynical attempt to withdraw it after the general election.
Mr. Waterson: Speaking of cynicism, I wonder whether my hon. Friend can help me on this point: does she understand the tactics of the Liberal Democrats in apparently intending to go into the Lobby to vote against the uprating of all these benefits while hoping against hope that they will lose?
Justine Greening: My hon. Friend makes a good point. It would be deeply irresponsible for the Lib Dems to play politics with payments that matter so much to millions of people across Britain, and to divide the House so as to vote against rises that will be very welcome, purely in order to campaign in their constituencies.
Dan Rogerson (North Cornwall) (LD): I am pleased that the hon. Lady has had the opportunity to come into the Chamber to contribute to the debate at this stage. She may not have been here when my hon. Friend the Member for Somerton and Frome (Mr. Heath) drew a parallel with the Budget. Her party often votes against the Budget, which might well contain important measures of which it is in favour, to make a more substantial point. Does she see a parallel there?
Justine Greening: There is a time to debate the reduction in pensions that might happen in the next financial year, and it is then. It is simply wrong to stand against rises that will be welcomed by millions of pensioners across Britain this year when we do not know what the outcome of the election will be and what will happen next year. I urge the Liberal Democrats to play a responsible role in this House instead of the irresponsible role that I suspect they desire to play.
We have had an interesting debate. The issue that we all have to consider is how, in difficult and tough economic times, with unusual measures of price rises-in fact, real price cuts, with the retail prices index being negative-we deal with protecting the most vulnerable in society. Through this uprating statement, we have tried to put first the protection of the most vulnerable in society. That is why we set aside an extra £5 billion to expand and increase the active labour market policies that will help people back into jobs as swiftly as possible. It is also why we have tried particularly to protect the benefits that are traditionally uprated by the retail prices index by at least 1.5 per cent., or, in the case of the basic state pension, by 2.5 per cent.
However, as the hon. Member for Northavon (Steve Webb) was quick to point out, these increases do not apply to additional pensions. In fact, the underpinning to which he referred, which has been put into place by this Government since 2001, has only ever applied to the basic state pension. Amid all the bluster that we have heard tonight, nobody has claimed that the underpinning of 2.5 per cent. to the increases in basic state pension applied elsewhere. Nobody has tried to prove that point or to claim that we have somehow pulled the wool over people's eyes. In fact, my right hon. Friend the Chancellor has done exactly as was promised in 2001 by having an underpinning of 2.5 per cent. for the basic state pension.
Mr. Weir: I understand the Minister's point, but my constituent's point was that when she deferred her pension, she was given documentation stating clearly that the additional pension grant as a result of the deferral would go up with the basic state pension in every year. That is not happening this year. By deferring the pension, she did not get payments for a couple of years, which obviously saved the Government some money along the way. Does the Minister agree that it is unfair not to adhere to that promise?
Angela Eagle: I am happy to have a look at the documentation that the hon. Gentleman has, but it is important to remember that a negative figure on the retail prices index does not happen very often. It has happened only once in the past 50 years, so these are very unusual circumstances.
Members of both the main Opposition parties have gone around the country whipping up worries about the size of the deficit and saying that we have to cut it immediately-we should have started last year, according to the Conservative party, and the Liberal Democrats have been making similar noises. For them to come to the House and say that we should be spending another £1.2 billion on this uprating alone-in other words, giving the impression that they would like increased expenditure on this but less expenditure in total-is almost as incoherent as the view that a 1.5 per cent. increase somehow amounts to a cut.
We will increase working-age benefits by 1.8 per cent., in line with the growth in the Rossi index, and during these difficult global economic conditions, when we have seen negative RPI for the first time in 50 years and people might have expected a freeze, the Government have been able to deliver an above-earnings increase in the basic state pension of 2.5 per cent., an above-earnings increase of 2 per cent. in the standard minimum guarantee for pension credit for the poorest, and a 1.5 per cent. increase in key disability and carers' benefits.
I will not take lessons on pensioner poverty or anything else from members of the Conservative party, considering that when we came into government in 1997 the poorest pensioners lived on £69 a week, which is £98 in today's prices, and that no one now needs to live on less than £132.50 a week. There has been a real-terms increase of almost one third for the poorest pensioners. We have spent £100 billion more on pensioners since 1997 than would have been the case had we continued with the system that we inherited. We have provided for a real-terms increase above RPI in the basic state pension, and this is the fourth time in 13 years under the Labour Government that we have had a real-terms increase above prices. The Conservatives increased it only twice, once in their first year in government in 1979 and once to compensate for introducing VAT on fuel. It is clear that pensioners have had a much better deal from this Government. We are spending £13 billion a year more on pensioners than would have been the case had we kept the old system in place.
The Government believe in giving help to the most vulnerable in society at the time when they need it most, and we have focused that help on the basic state pension as the correct mechanism by which to do so. Carers, disabled people and those receiving statutory payments for parents will also receive an above-index increase in their benefits, ensuring that they do not fall behind. The order provides a package of uprating proposals that will put £2 billion in the pockets of the poorest and most vulnerable in our society, and I commend it to the House.
Mr. Speaker: We come now to motion 7- [Interruption.] Order. I recognise that the deferral of the Division will come as a surprise to many right hon. and hon. Members, but equally they will know that I operate on the basis of the advice that is given to me by procedural-
Mr. Speaker: They are procedural experts. I am grateful to the hon. and gallant Member for Blaby (Mr. Robathan) for his sedentary endorsement of the value of the Clerks' advice. I am operating on the basis of that advice, and it would not be proper to have a Division now. That is why it is deferred. I hope that explanation is helpful.
That, for the purposes of any Act resulting from the Local Authorities (Overview and Scrutiny) Bill, it is expedient to authorise the payment out of money provided by Parliament of-
(1) any expenditure incurred by the Secretary of State in consequence of the Act, and
(2) any increase attributable to the Act in the sums payable under any other Act out of money so provided. -(Angela Eagle.)
I will not detain the House for long. Suffice it to say that this is a money resolution. On Second Reading, the official Opposition said that we would not stand in the way of the Bill. We do not think that it is drafted as effectively as it could be to achieve what we support, which is helping local authorities to enhance their abilities to scrutinise bodies that provide public services on the ground. Local area agreements are delivered in part by organisations that are not local authorities, and we want them to be subject to full scrutiny, too. On Second Reading, we debated how that might happen.
Although we have some concerns about the drafting of the Bill, we support the resolution, so that we can have the debate in Committee. As I am sure you would expect, Mr. Speaker, we aim to play our role in the debate in Committee by making a number of amendments further to improve the Bill, which is important. As I briefly touched on, we need properly to understand the scope of the Bill-it could be quite broad-and how it works. If we can do that effectively, we have a good chance of ensuring that it does not become onerous financially for local authorities.
On Second Reading, the Under-Secretary of State for Communities and Local Government, the hon. Member for Dudley, North (Mr. Austin), who is not in the Chamber, said that local authorities would continue to work within their existing budgets and that the only costs he expected to emerge from the Bill were extra compliance costs for the public bodies that will be subject to increased scrutiny. We should also not forget the extra burdens that could be put on private bodies.
We support the money resolution. We understand that the extra costs to local authorities could nevertheless be in the region of £4.5 million, but that the Government have committed to funding any extra costs under the new burdens principle. Will the Minister confirm that the £4.5 million that is set out in the impact assessment is still the Government's projected assessment of the cost of the Bill? Perhaps we will also debate that in Committee.
One final point is that if we are going to give councils and elected councillors more ability to hold providers of public services to account, we need to debate ensuring that councils can be set up with the structure that they think helps them not only deliver public services, but carry out that scrutiny best. They need to be given more freedom. In fact, the Local Government Act 2000 requires councils to abandon the traditional committee system and adopt either directly elected mayors or a cabinet system. We think that that is overly prescriptive, and that local government should be able to choose how to run itself more effectively.
Mr. Speaker: Order. The hon. Lady is displaying an imaginative interpretation of the terms of the motion-some might even go so far as to use the word "liberal", although I do not in any way wish to cast an aspersion on her- [ Interruption. ] Order. The sedentary contribution from the hon. Member for Croydon, Central (Mr. Pelling) probably will not assist matters even if it might be amusing. I know the hon. Lady will now wish to focus her remarks on the terms of the motion. Just to emphasise the point, the motion does not permit her to dilate on the subject of the Bill as a whole, but on the matters of overview and scrutiny, with particular reference-and reference only-to money.
Justine Greening: I was trying to be helpful to the Minister, because I was just about to wrap up by saying that we intended to table an amendment in Committee. I wanted to flag that up to the Minister-
The Parliamentary Under-Secretary of State for Communities and Local Government (Barbara Follett): This Bill makes provision to require local authorities with lead responsibility for local area agreements to provide designated scrutiny officers with sufficient resources to discharge their functions. That is what the hon. Member for Putney (Justine Greening) was referring to in her contribution. This requirement may result in additional costs for authorities, which we estimate will be no more than £4.5 million a year.
In line with the new burdens doctrine, any net additional cost to local authorities as a result of this requirement will be fully and properly funded by the Government. The provision requiring these local authorities to resource sufficiently their scrutiny officers is necessary if the aims of the Bill are to be achieved. I commend the resolution to the House.
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