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Welfare Reform Bill

I will not outline our excellent policies in great detail, because that would be straying away from the amendments, but the hon. Gentleman will know the impressive proposals that we have published in our work programme, such as getting people back to work and investing the savings that result. I am therefore confident that within the budgets that we have available, we will be able to fund that measure without having to cut any other programmes. I am pleased that people with a visual impairment can rest assured that this welcome measure can be introduced regardless of the result of the general election. The Minister of State suggested that Lords amendment 23 might be of interest, and the hon. Member for Northavon has already mentioned it. It is about the power to uprate benefits following a review in the tax year 2009-10. It is an interesting amendment that prompts a number of questions. When Lord McKenzie introduced it in the other place, he made it clear that it was""intended to give the Government the flexibility to uprate the basic state pension by the commitment of 2.5 per cent. and to uprate other social security benefits as the Secretary of State thinks fit, even though the level of prices, as measured by the retail prices index, has not increased."—[Official Report, House of Lords, 22 October 2009; Vol. 713, c. 918.]" That prompts a number of questions, because the former Minister of State, the right hon. Member for Harrow, East (Mr. McNulty), said in the House of Commons on 11 December 2008, when he was making the annual benefits uprating statement:""We enshrined a 2.5 per cent. floor in the Pensions Act 2008, so if inflation goes down to zero, as some anticipate, there will always be at least that 2.5 per cent."—[Official Report, 11 December 2008; Vol. 485, c. 700.]" I was not aware of that change, so I consulted the Library, which does not believe that either the Pensions Act 2008 or the Pensions Act 2007 has been changed to give effect to that statement. It thinks that it was a non-statutory Government commitment. What the right hon. Member for Harrow, East said in the House does not seem consistent with Lord McKenzie's comments. Will the Minister confirm whether his colleague, the former Minister, may have inadvertently misled the House about the basis for the 2.5 per cent. uprating in cases where the retail prices index has not risen? If the provision is already in the Pensions Act, it is not needed to uprate the basic state pension, which is the main reason that Lord McKenzie gave for introducing it. I think that that was the basis of the point that the hon. Member for Northavon made. The hon. Member for Northavon wondered why the change was a one-off, which would take effect for only the coming financial year. Lords amendment 23 is very specific. It is a new clause, entitled, "Power to up-rate benefits following review in tax year 2009-10"—the current tax year. It provides that if""the general level of prices is no greater at the end of the period…than it was at the beginning"," the Secretary of State will have the power, looking at the national economic situation, to make changes to benefits in the following year. Of course, that is the year of the general election. That raises the question of whether we are considering a pre-election ploy or gimmick. Now that we have established that the general level of prices could fall or be zero, I cannot understand why no permanent change is being made to the Social Security Administration Act 1992, providing the power for the Secretary of State to make the judgment on an ongoing basis. I cannot understand why the decision is for one year only. When the hon. Member for Northavon pressed the Minister, he gave a reply, but it did not answer the question. He said that he could not pre-empt the Chancellor's announcements in the pre-Budget report, but the hon. Gentleman had not asked him to do that. I might try to tempt him to do it—I know he will not go there—but the hon. Gentleman was not asking about rates of increase; he simply asked why the change was not permanent. As things stand, if by next September the general level of prices has not increased and inflation remains negative, and a Government nevertheless wish to increase the basic state pension or other benefits, it would be necessary to change primary legislation again. I do not therefore understand why the Government have not made the change permanent, and it would be helpful if the Minister explained. I do not wish to tempt the Minister to go beyond his brief and say what other benefits the Chancellor might change in the pre-Budget report, but it might be useful if he gave the House some idea of what factors may be taken into account when setting those benefit rates. In the outside world, people who work have experienced a growth of only 1.6 per cent. in average earnings in the year to August—a reduction from 1.8 per cent. to July. In the private sector, pay growth is just 1.2 per cent., compared with 3.2 per cent. in the public sector. Those who have to go out and earn a living will expect that to be taken into account when Ministers set benefit levels. The Minister mentioned council tax benefit and the change in the name, which we greatly welcome. I can do no better than repeat the words of my noble Friend Lord Freud, who said in the other place:""we welcome the government amendment."—[Official Report, House of Lords, Vol. 713, c.1108.]" He rightly paid tribute to the campaign that the Royal British Legion highlighted to focus on the fact that the benefit was really a rebate, and that if the language were changed, it would make a significant difference to pensioners' attitude to taking up what they are rightfully owed. He made the point that my right hon. Friend the Leader of the Opposition had pledged to support the change, and supported the amendment on behalf of our party in the other place. As the Minister rightly said, that amendment has cross-party support. On Third Reading in the Lords, the Government accepted the amendment tabled by Baroness Turner of Camden to strengthen the change slightly by replacing "may" with "shall", and that toughened up the provision. I recognise that there are some significant challenges of detail to face, and I simply emphasise what I am sure is this House's wish that the process should get under way as quickly as possible so that the change can be made as soon as possible. I conclude with an observation. In the debate on the previous group, I think that the Minister established a new parliamentary convention, which we may wish to call the Knight convention, whereby he set out the Government's approach of putting sticks in primary legislation and carrots in secondary legislation, with the special twist that carrots might now be introduced in primary legislation. I have no idea whether that will catch on and be put in "Erskine May" in due course, but it may be something that the right hon. Gentleman will leave behind for us all to enjoy in this House in the future.