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Welfare Reform Bill

My Lords, perhaps I can help the noble Lord by going over this again. The point is that, in the current provisions under which the Secretary of State can deal with changes to pensions, where the general level of prices has increased the Secretary of State is required to lay the draft of an uprating order. If the level of prices has not increased, that power cannot operate, so this mechanism is needed to enable there to be an increase when the RPI goes down. It is relatively straightforward to my mind. The noble Lord drifted into what he called a rant—not a term that I would use, of course—about earnings. The Government’s commitment is to increase the pension by 2.5 per cent, which is greater than current levels of earnings increases. In the period 1997 to date, pensioners have done better in aggregate than they would have done from a simple uprating of the basic state pension by earnings. He will also be well aware that we legislated in 2007 on linking again the basic state pension to earnings. The noble Lord asserted that we should have a Pre-Budget Report with huge increases in pensions. I guess that that is just another Lib Dem uncosted proposal, and I do not know whether he has checked that with his leader, Nick Clegg.