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Guaranteed Minimum Pensions Increase Order 2007

rose to move, That the Grand Committee do report to the House that it has considered the Guaranteed Minimum Pensions Increase Order 2007. 7th Report from the Statutory Instruments Committee. The noble Lord said: I will speak also to the Social Security Benefits Up-rating Order 2007. I am satisfied that the orders are compatible with the European Convention on Human Rights. The Social Security Benefits Up-rating Order will, as usual, increase most national insurance benefits by the retail prices index, which is 3.6 per cent, and will increase most income-related benefits by Rossi, an index that excludes rent, mortgage interest, council tax and depreciation, which is 3 per cent. The Guaranteed Minimum Pensions Increase Order sets out the amount by which contracted-out occupational pension schemes must increase members’ guaranteed minimum pensions which accrued between 1988 and 1997. Where the annual increase in the retail prices index exceeds 3 per cent, the guaranteed minimum pensions indexation requirement is capped at that level under the primary legislation. This year’s order therefore provides for an increase of 3 per cent. This year’s uprating adds over £3.5 billion to government spending and reinforces our commitment to tackle poverty by helping those most in need and to build an active welfare state. The order providesfor an extra £2.48 billion for pensioners, of which £300 million is above inflation, and an extra£560 million for disabled people and carers. We now spend over £10 billion a year more on pensioners than if we had simply continued the policies that we inherited in 1997, and pensioner incomes have risen across the board, with the poorest benefiting the most. We have lifted more than 2 million pensioners out of absolute poverty, and 1 million out of relative poverty. Indeed, we have now reached a position in which pensioners are less likely to be poor thanthe population as a whole, breaking the historic correlation between poverty and old age. We now need to maintain that achievement, and in the Pensions Bill, which has now completed its Committee stage in another place, we will legislate to ensure that the progress we have made for today’s pensioners is locked in for tomorrow’s pensioners. We will only truly eliminate inequality in retirement when we eliminate inequality in working life. That is why our welfare reforms and our aspiration for an 80 per cent employment rate are so important and why we are so committed to tackling entrenched poverty and disadvantage. Ten years ago, nearly 6 million adults in this country were dependent on benefits, and with that benefit dependency came poverty. The number of children living in poverty doubled. Today, child poverty is falling faster than anywhere in the EU. Since 1997, 800,000 children have been lifted out of relative poverty, and 2 million out of absolute poverty. Tax credits are now benefiting around 6 million families and 10 million children. From April this year, families with children will be, on average, £1,550 a year better off in real terms than in 1997, while those in the poorest fifth will be on average £3,450 a year better off. That support goes hand in hand with the other measures that are designed to give working families the support that they need. In 1997, paid maternity leave lasted for 16 weeks. From April, it will rise from six to nine months, and by the end of this Parliament we intend to extend statutory maternity pay and maternity allowance to a full year. Of course, there is more to do if we are to eradicate child poverty, and we will continue to look at what more the Government can do to help those most in need, but ultimately it is the opportunity to work that provides the only long-term, sustainable anti-poverty strategy. That is why this Government’s approachto tackling poverty has been about maximising opportunities to work. It is why we created the national minimum wage and tax credits to make work pay, why we have invested in Jobcentre Plus and the New Deal to help people find work, and have maintained a strong economy that sees everyone sharing in the benefits of record economic growth. Today more people are in work than ever before. Employment is up by more than 2.5 million since 1997 and is up in every region of the UK. Our Pathways to Work initiative now covers 40 per cent of the country.