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Social Security

It is nice to see such a large crowd of Members in the Chamber for this debate. I have attended benefits uprating debates for a number of years, and there are usually three people, possibly including one who really likes statistics, sitting somewhere on the Back Benches. As the Minister has suggested, the greater attendance this afternoon is probably a result of the fact that the entire basic indexation of the benefit system is about to change from RPI to CPI. Benefits uprating orders are all or nothing orders; we cannot pick and choose what we want to be in them. There are bits that Labour Members are not particularly happy about, but we are happy with other bits, and if these orders do not get passed today no uprating will take place, which is the dilemma facing those of us who have concerns, particularly about the move from RPI to CPI for public sector pensions. I think I can speak on behalf of my party colleagues in saying that we will not vote against the motion, but neither will we necessarily vote for it. If the order does not pass, nobody gets anything, and we would not want that to happen. The Minister is a very clever man, and I found his analysis fascinating. He gave a very clear and logical explanation of why CPI should be used as the inflation measure for indexation; everything fell into place, as we would expect from him. He said it is such a good measure that we are going to use it for public sector pensions, and, if we can get away with it, possibly for private sector pensions and occupational pensions. Apparently, it is so good that we are going to use it for everything except the basic state pension. I have no problem with the fact that the Government are increasing the basic state pension by more than the triple lock would have given, but this undermines the Minister's logical argument as to why CPI is so good. My right hon. Friend the Member for East Ham (Stephen Timms) picked up on this and I would like the Minister to explain his position. Why is the basic state pension going up by RPI, or 4.6%? CPI stood at 3.1% during the period; we are talking about last year's inflation figures here. I am also delighted that the Government have recognised the importance of pension credit, which was introduced by a Labour Government, and of keeping that increase in line with inflation. Under the Labour Government, it was the pension credit element, rather than the basic state pension, that went up by the higher rate of indexation, because the Government wanted to narrow the gap between rich and poor pensioners and that was the easiest way to make sure the poorest pensioners got the most. Under this new uprating, however, pension credit is not going up by the 4.6% under RPI that the basic state pension is going up by. It is only going up by 3.6%, which is in line with neither CPI nor the triple lock. I am not quite sure where that figure has come from. I am not complaining that the uprating is not more than it should be, but perhaps it is less than the Minister was led to believe. We can see from last year's figures and the indexation that we are looking at a CPI of 3.1% and an RPI of 4.6%. That is one third less. Many people are concerned about the compounding effect of CPI over the years on their take-home pension.