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Pensions Bill

We come to one of those totemic pensions issues. Whatever audience I am speaking to in whatever part of the country, somebody will always raise the issue of the earnings link and its breaking in 1980. I could go into a history lesson about why that happened when it did, and talk about the fact that the earnings link was a relatively new concept that had been around for only a few years before the change. However, doing so would not be particularly profitable. What is important is that there is now a consensus that the earnings link for the state pension should be restored. Indeed, I remind hon. Members that that was in our manifesto at the last election. Now that the Government have joined that consensus, nobody is arguing the opposite—except conceivably, I suppose, the Liberal Democrats, who are still peddling their citizens pension concept. We will no doubt hear more about that in a little while. This debate is particularly timely, given that issues of pensioner poverty are very much at the forefront of the news. There is, of course, the controversy over the 10p rate of income tax and the effect on some 5.3 million people, a significant number of whom are pensioners, particularly women pensioners. There is also a question of whether the official inflation rate is relevant to pensioners. Some experts think that pensioners face a rate of inflation that is more like 9 per cent. because such a large proportion of their income is devoted to utility bills and council tax, which has gone up by 120 per cent. in my constituency in the past 10 years. The other day, during Work and Pensions questions, I made the point that a significant and growing number of pensioners are using their winter fuel allowances to pay for soaring council tax bills and basic foodstuffs. I also made the point, although it seemed to annoy the Minister somewhat, that, according to the latest European Union figures, Britain is fourth from bottom of the poverty league in Europe and that only pensioners in Spain, Latvia and Cyprus are more likely to fall into poverty. Given that restoring the earnings link is a matter of consensus, its time has presumably come—the Government should certainly consider it seriously. What is their current position? Their stated position is that they intend to restore the link"““subject to affordability and the fiscal position””" in 2012. At the very latest, the link will be restored"““by the end of the next Parliament””—" that is, by 2015. It is important that I come back to a point that I made in a different context a little while ago about the Turner package of reforms that has emerged from the Pensions Commission: there is always a danger in decoupling the provisions. It is important to remember that Lord Turner and his colleagues proposed that uprating should begin in 2010. The feeling in the Conservative party—and in others as well, it would appear—is that the time has come for Ministers to make a decision on when the restoration of the link will take place. Will it be in 2012 or 2015? Is the get-out clause of affordability still relevant, and is it likely to become more relevant as the economy moves in a downward direction?