Social Security and Pensions (Statutory Instruments) — House of Commons, 2015-02-09
Topic: Labor
Steven John Webb (Liberal Democrats, Centre to centre-left): With the leave of the House, I shall respond briefly. The right hon. Member for East Ham (Stephen Timms) will not be asking his hon. Friends to vote against the orders because he has sent them all home, as far as I can tell Let me try to deal with a few of the points that were raised. There were lots of comparisons between the rate we are paying and what would otherwise have happened, so to be clear about the £560 statistic, the comparison is as follows: the basic state pension—the £520 comparison—is the triple lock against earnings. That is what would have happened, compared with uprating in line with earnings, but there are several different benchmarks On the state pension, we cannot have these debates without refreshing our memory. One of the reasons that we have the triple lock and that 2.5% floor is that the Opposition, when in government, once raised the pension by a paltry 75p. They were so embarrassed by that that they had to have a £5 increase the next year. We do not think that is good policy, so we say that there should be a worthwhile increase each year, which is where the triple lock comes in The right hon. Gentleman says that the benchmark is lower than it would have been if we had linked the pension to an index of inflation which the Office for National Statistics report says is discredited, so why is that an interesting comparison? He says that the Labour party rejects the move to CPI, but presumably he is not committing to RPI as he is not allowed to make any spending commitments because the shadow Chancellor will not let him. "Vacuous posturing" is a rude phrase and I would not use it. The Opposition do not like what we are doing, but to imply that in a year when we are increasing the benefit by four times the average wage and twice the rate of inflation that that is still not enough is extraordinary If the right hon. Gentleman wants to stand up and say, "We’d pay a higher pension," fine. He is entitled to say that, but he has not said that Labour would pay a higher pension. He wants us to think that, but there is no money to pay a higher pension. He simply wants to imply that Labour would do so. He says that the Opposition reject CPI as the main measure, but he has not told us what it would be. How can people vote for the Labour party in anticipation of what it would do on the pension when it has not said what it would do on the pension? I hope that before the election Labour say what it would do. There was an opportunity to do so this afternoon and the right hon. Gentleman failed to take it The right hon. Gentleman raised the issue of universal credit, a matter which is regularly debated in the House. He referred to the current rate of progress and said that it will go on for ever. He understands the importance of an accelerating process—the need to get a benefit right and to start with a limited group before applying it to a broader group, and that is exactly what has been happening with universal credit. It is worth saying that our projections for the numbers on universal credit are affected to some extent by the jobs revolution that is going on. As fewer people are unemployed, fewer people will be within the scope of universal credit. Every time we look at the numbers, falling unemployment is one of the factors that reduce the number of people on universal credit The right hon. Gentleman asked about the IFS report. It was quite candid about a number of limitations. For example, it acknowledged that the figures it uses assume that everybody takes up their benefits, which we know is not the case, so that is an unrealistic assumption. Crucially, the report does not include spending on public services. We know that the poorest 20% of households get five times as much value in kind from public spending as they contribute in tax, so the fact that we have ring-fenced the key public services, such as health and schools, is of huge benefit to those at the bottom of the pile, but that is not something that the report takes into account The right hon. Gentleman also mentioned work incentives. The IFS report states: "By cutting benefits for non-working families and increasing the personal allowance, the coalition has significantly strengthened average financial incentives to work for most groups." He says that there is a challenge, and of course there has been over the past four or five years. On one hand the Opposition say that we have not cut the deficit enough, but on the other hand they have voted against practically every measure we have brought forward to tackle it.