Pensions Update

Steve Double Excerpts

Tuesday 7th September 2021 Commons Chamber

[Dr Coffey]

The one year will be set out in the Bill, which I expect to be published tomorrow. As I have said, Steve Webb—the former Lib Dem pensions Minister, who probably knows more about pensions than any other member of the Liberal Democrat party—has been very public about the fact that this is a pragmatic approach, in effect, and it is not what this was designed for. I also point out that, when I made a similar statement last year, the hon. Member for North East Fife (Wendy Chamberlain), who usually speaks on DWP matters for the Liberal Democrats, asked about what would happen next year and whether we should anticipate that something like this approach might be needed again. That was a fair question, but it was important that we took things one year at a time because we did not know the future impact.

As I have already articulated to the hon. Member for Edinburgh West (Christine Jardine), this will be for one year only. The setting aside of the earnings link is because earnings are built into the Pensions Act. If we had not changed the law last year, we would not have been allowed by law to have increased the state pension at all; it would have been frozen in cash terms. Just as last year we set aside the earnings link to allow the uprating and ensure that state pensions were not frozen, this year we are setting it aside to correct for the fact that we have a statistical anomaly.

[Steve Double (St Austell and Newquay) (Con)]

It is quite clear that this is one of a number of very difficult decisions that we are having to make, and I think most reasonable people understand the reason: the pandemic and its impact on our economy. We do not do this lightly—we do it with a heavy heart—but it is the responsible thing to do. I have actually had emails from constituents who are pensioners, saying that they should not get an 8% increase this year, because they understand that these are very unique circumstances.

I am grateful that the Secretary of State has confirmed that this will be a one-year change. Will she also lay out what the Government have in place to support the lowest-paid and poorest pensioners at this time?

[Dr Coffey]

Before I answer my hon. Friend’s question, I need to correct part of my last answer: the earnings link is not in the Pensions Act, but in the Social Security Administration Act 1992, so apologies for that.

My hon. Friend is right. I am conscious that we want to help our pensioners at this difficult time. I have already referred to some of the benefits that may be available for people to take up where there is a pension already. We have done a significant campaign in the past year to improve take-up of pension credit and we will continue to signpost people accordingly to take advantage of the benefits that are available to some of our poorest pensioners.