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CPI/RPI Pensions Uprating

It is a pleasure to speak in this debate. I listened carefully to what the hon. Member for Eastbourne (Stephen Lloyd) was saying and, in particular, to his question at the end about the basic state pension. Of course, the increase in the basic state pension might offset the loss for some people as a result of this change from RPI to CPI, but my understanding is that for the vast majority of people the amounts of money that are being talked for the basic state pension will not help individuals such as the firefighter to whom we have already referred. That firefighter is due to retire and planned his finances on the basis of a pension he was expecting to get, but now understands that he is likely to be in the region of £25,000 worse off if he lives the average length of time of someone in that situation. Some very important principles are involved in this debate. I have always been surprised by pension law in this country and the fact that there is so much discretion. Within our system there is no guaranteed pension and there has always been a legal set-up within which it has been possible for employers to take pension holidays when the stock market has been doing well. There seems to have been a collective belief that things would stay the same and a failure to understand the very turbulent nature of the financial system. That is particularly important when we talk about pensions because people pay up and make decisions about their pension over many decades. They make decisions at the beginning, one hopes, of their working life that are going to affect what they receive 40 years later. I believe that the Government's decision to move from the retail prices index to the consumer prices index has been made on financial grounds—to save money. However, as I said earlier, I am not convinced that it will save the amounts the Government hope for in the long term unless there are going to be absolutely savage cuts in welfare benefits, although that might well come from this Government.