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CPI/RPI Pensions Uprating

I am grateful, Madam Deputy Speaker. Thank you very much, indeed. I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on securing this important debate and thank the Backbench Business Committee for granting us this opportunity, which has arisen out of an e-petition signed by in excess of 100,000 people. I have also received many representations from constituents, in letter, in person and by e-mail petition, so I should like to make some points in the debate, and I am grateful for the opportunity to do so. I shall try not to repeat those points that Members on both sides of the House have already made. There has been a decision to change the index that is used to increase state pensions, public sector pensions and, indeed, large aspects of private sector pensions. In an earlier intervention, the Minister said that the change would not affect private pensions that already have RPI in their terms, but certain private pensions that have a statutory link will be affected, so perhaps he will clarify that point in his final remarks. My concern—this is based anecdotally on evidence that constituents have presented to me in letter form and in person—is that some members of public service pension schemes might lose up to 25% of their pensions. It is difficult, as the hon. Member for Gloucester (Richard Graham) said, to understand the complexities of RPI against CPI, but my fairly simplistic view is based on what is the bottom line for the people who are affected. I am concerned that many of my constituents, who are not well-paid public sector pensioners, will be adversely affected by the change. To reinforce the point that the hon. Gentleman made from the Conservative Benches, I note that it seems that the Office for Budget Responsibility underestimated the gap between RPI and CPI by about 100%. When the OBR made its forecast, it said that the difference would be about 0.7%, but it has turned out to be nearer 1.4%. In other words, the switch could cost pensioners in Easington and, indeed, throughout the country, many thousands or even tens of thousands of pounds over their retirement. I do not believe that it is disputed that the change will save the Treasury and employers with private sector pension schemes billions of pounds, at the expense of those saving for their retirement. In an earlier intervention, I raised an issue that was raised with me by the GMB trade union, which suggests that we look at a bespoke pensions index that might more accurately reflect the cost of living faced by pensioners. When I read the suggestion, I thought that we should look at it a little further, given the controversy raging about which is the correct measure, but in response to an earlier point I must say that the previous Government used CPI as a comparator. I stand to be corrected if need be, but the traditional index that we have used in this country since the 1940s has always been RPI. The previous Government introduced CPI not for pensions but because the measure was used in the European Union and was more readily understood when used as a comparator across other EU states. I would never advocate applying it for the purposes of pension calculation.