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Guaranteed Minimum Pensions Increase Order 2008

Indeed. The purpose of the uprating is to make sure that their value is maintained, with the right not to maintain them as a guaranteed minimum pension in the future but to build an actuarial equivalence into normal benefits being provided for in the legislation that we discussed extensively last year. Yes, there is a value. The order is about maintaining or preserving that, but giving schemes the choice to convert to equivalence, so that one no longer has to go through the detail and complexities of these calculations. I hope that I have dealt with guaranteed minimum pensions. Perhaps I may deal next with the range of inflation measures. The noble Lords, Lord Kirkwood and Lord Skelmersdale, were right that they are inevitably backward-looking, which is the only sensible way to approach them. There is a range of measures, such as RPI, Rossi, RPIX, which is retail prices less mortgage interest payments, and the consumer prices index, which is the main macroeconomic inflation indicator and commonly used internationally. Each has its role. Traditionally, we have used RPI for the upratings. For the 2008 uprating, the RPI is 3.9 per cent and the CPI is down at 1.8 per cent, so it was beneficial to individuals that we used the RPI figure. Of course, if there are cost increases in certain commodities after the announcement, during the course of the year before the next uprating there is inevitably a bit of a lag to that—but it will be caught up when the next uprating takes place. The impact on energy prices needs to be seen also in the context of the Government’s fuel poverty strategy, which has invested considerable amounts of money in targeting the most vulnerable and helping them to tackle fuel poverty; 1.6 million households have already been helped under the Government’s Warm Front programme.