---

Guaranteed Minimum Pensions Increase Order 2008

Indeed. For the purposes of clarity I should set down in writing the different components of those two measures. My next point goes to the heart of the point that both noble Lords made about working-age families without children and the challenges of living perpetually on benefit when it is uprated only by RPI. Yes, of course that is so—which is why we placed so much emphasis and did so much work on the benefit of encouraging and supporting people into work, for a whole range of reasons. There is the whole issue around the health, work and well-being agenda—that being in work is generally good for your health and being out of work is generally bad for your health. We know that it is the best route out of poverty, overwhelmingly for most families, which is why the investment has gone in, why we have the New Deal and why there have been the very dramatic improvements in the labour market statistics. The number of people in work is a record 29.36 million. ILO unemployment was down 13,000 on the last quarter and the number of out-of-work benefits have fallen by 1 million since 1997. Those are real and dramatic changes in the labour market, and we need to keep supporting people into work. The greater emphasis will be achieved by integrating the skills and work agendas to make sure that people who come on to jobseeker’s allowance have skills screening and the help that they need to improve their skills. Under the flexible New Deal, we want to make sure also that people have the benefit of advisers and support, so that they not only get into work, but are sustained and encouraged to progress in it. If one were to compare most in-work calculations with equivalent benefit calculations, one would see that people are overwhelmingly better off in work. I accept that that is not always well understood, although Jobcentre Plus will do a calculation as a routine part of a customer’s experience. People sometimes forget that benefits such as council tax benefit and housing tax benefit are in-work as well as out-of-work benefits and do not necessarily factor them into the calculation. However, these are the challenges of helping people to understand and of supporting them into work. The noble Lord, Lord Kirkwood, drew comparisons between the percentage levels of the basic state pension to show what they have been historically. He was right: the Government’s approach when they came into office was to target resources on those who needed them most. We make no apology for that because of the paucity of provision for pensioners in 1997. It was absolutely right to do that. We know that we have spent more on pensions and invested more on pensioners than would have been the case if we had only uprated the basic state pension by earnings rather than prices. We would not have done better. Under the pension reforms last year and those that we shall discuss soon, we have put in place foundations to help more people access a full basic state pension and to relink the basic state pension with earnings in 2012 or the end of the next Parliament. Nor should we overlook the benefits of S2P and what that has meant for generally poorer workers in additional support and extra pension provision.