Asked by
To ask Her Majesty’s Government what assessment they have made of
the impact that the suspension of the triple lock on pensions
will have on the lives of pensioners.
(Con)
My Lords, during the passage of the Social Security (Up-rating of
Benefits) Act 2021, which suspended the earnings link for state
pensions uprating for one year, the Government published an
impact assessment. The one-year suspension of the triple lock was
in response to the extraordinary economic circumstances at the
time, and the Government are committed to applying the triple
lock as usual from 2023-24 and for the remainder of this
Parliament.
(Lab)
I thank the Minister for the reply, although telling us that they
were looking in their rear-view mirror when making these
decisions is not very helpful. We were told at the time that the
suspension was justified because 8% inflation was unthinkable.
Can the Minister tell us what the inflation rate on household
energy is expected to be next month? Can she also perhaps tell us
what the inflation rate on budget brands of food is likely to be
and, most importantly, how she expects people on state pensions
to stay warm and fed?
(Con)
My Lords, I cannot look into a crystal ball and give those
figures but they will come out. We know that they are much higher
than we ever expected at that time, which is due to global rather
than domestic issues. The important thing with this is that the
Secretary of State has to undertake an annual review of benefits
and pensions, and the CPI in the year to September is the latest
figure that they can use to allow sufficient time for the
required legislation and operational changes before new rates can
be introduced in the new financial year. As I mentioned on a
previous Question, because it had to be done at that time, the
Government looked at the pressures on the budgets of families and
pensioners and made the changes that I spoke about earlier.
(Con)
My Lords, what are the Government doing to increase the take-up
of pension credits?
(Con)
I thank my noble friend for that question because pension credits
are important, particularly for very vulnerable pensioners and
those on very low incomes. At the moment, there are about 1.4
million people claiming around £5 billion in pension credit but
only about 73% of the people who should be taking it up are doing
so. The important thing is that we have to continue to raise
awareness. We have put out many letters to pensioners while
encouraging them, through the press and social media, to take
this up because it is money that is sitting there and should be
in their pockets.
(CB)
My Lords, I fully understand why the Government have had to
cancel or suspend the triple lock this year. I also understand
that the whole population will take a hit from the inflation
increase. I am not sure whether this figure is available but, if
it is, can the Minister tell the House what percentage increase
in pensions there will be this year, to provide some compensation
to pensioners for the huge inflation rate that we all
anticipate?
(Con)
I cannot give the figure for that but am very happy to find
somebody who can. I will let not only the noble Baroness but the
House know it.
(LD)
My Lords, figures show that one in five pensioners in the UK are
living in poverty, while 1.3 million retirees are undernourished
and 25,000 die each year due to the cold weather. The Minister
spoke about extraordinary changes in economic circumstances.
Given these and the massive increase in energy costs, what
additional support will the Government be providing for
pensioners, who suffer particularly when energy costs are
high?
(Con)
My Lords, I am conscious that I spoke about households with
families before but all the money that the Government are giving
for families is available as well to pensioners. The full annual
amount of the state pension is worth over £2,300 more in cash
terms now than it was in 2010. More than that, about 1.4 million
of the most vulnerable pensioners also receive, as we have heard,
£5 billion of pension credit. We know it is difficult out there.
We are giving money to pensioners through our energy relief costs
and living standards costs. We will continue to keep an eye on it
and do what we can to increase their budgets.
(Non-Afl)
My Lords, it seems to me that this is a perfect storm and I
support the noble Baroness, Lady Bryan, in her Question. There is
going to be a real reduction in the income of the vulnerable
elderly at a time when, on all fronts, the cost of living is
going to go through the roof. Can the Minister give some words of
comfort to those members of communities who are not just about
managing but are manifestly not managing in the autumn of their
years and having to choose between eating and heating?
(Con)
Yes, I can. I think it is up to everybody in communities to
support our older population in making sure that they are aware
of what they can get. There is the basic state pension and, as I
said, there is pension credit, but there are also things such as
free bus passes, free prescriptions, winter fuel payments and
cold weather payments. All these things are available to help the
budgets of these very vulnerable people and it is important—and,
I feel, important for the department—to make sure that everybody
is getting everything they are entitled to.
(CB)
My Lords, while many pensioners live on the breadline, quite a
few do not and many of those are still in work. Would it not make
sense for them to pay the full rate of national insurance and
give people who are not in work more help?
(Con)
Of course, they will pay the new rate of national insurance for
the National Health Service and social care. I think it is right
that they do so if they continue to work, so I agree partly with
the noble Baroness.
(GP)
My Lords, following up on pension credits, given that the
percentage uptake is creeping up very slowly and surveys show
that 60% of eligible people who are not receiving it are
reluctant to ask for help, is it not time to look again at
auto-enrolment? I know this was seen to have failed a decade ago,
but digitalisation of records has moved on a lot since then and
people should not have to ask—they should just get the money.
(Con)
Yes, I accept what the noble Baroness says and I will take that
back to the department. The rate is creeping up; it is at 73%
now. We just need to work harder at that as this is money that
belongs to those people.
(Lab)
My Lords, I would like to debunk the Minister’s statement that
somehow the Budget did not permit the Government an increase in
pensions, especially as the Government gave a £4 billion tax cut
to the bankers. The national insurance fund had a surplus of
about £43 billion, more than enough to fund the triple lock. In
addition, if the Government had wanted, they could have got more,
for example by taxing capital gains at the same rate as earned
income and charging national insurance on the same. That would be
another £25 billion. Will the Minister admit that the real
problem is that the Government are choosing to inflict hardship
on our pensioners? It is a political choice, not an economic
necessity.
(Con)
No, I do not agree with the noble Lord. For a start, there is no
surplus in the fund that can be simply drawn on. The Government
Actuary’s Department recommends that a surplus is kept in the
national insurance fund to cover day-to-day variations in spend
and the surplus is lent to the Government while that happens. It
cannot simply be spent again. The money is invested, it is
ring-fenced and there is no question of the Government being in a
position to use this facility to extract money from the fund as
an extra source of revenue.
(Lab)
The Minister quoted what the Government Actuary said. The surplus
in the fund will be heading towards 60% but the surplus
recommended by the Government Actuary is 16%. That is a
difference of more than 40% of the fund. There is the money
there.
(Con)
I have no answer to that but I will make sure I get one. I assure
noble Lords that the fund cannot be used for the purposes that
have been put forward.
