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Question
The shadow Secretary of State questions the Government's analysis that led to this decision. He asks for the legal advice cited and urges them to show their workings on why underlying wage growth could not be assessed without furlough impact.
Minister reply
The minister responds by emphasising that the earnings spike is a statistical anomaly due to unique circumstances of the pandemic, necessitating a one-year adjustment. She maintains this measure ensures fairness for working people whose incomes have been frozen, and reaffirms the commitment to apply the triple lock as usual from next year onwards.
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Question
Reynolds thanked the Secretary of State for her statement but expressed concerns about breaking manifesto promises. He argued that the triple lock policy has significantly contributed to reducing pensioner poverty since 1980, despite its suspension during the Thatcher era. Reynolds questioned why the Government could not assess underlying wage growth without considering furlough data and requested legal advice backing this decision.
Minister reply
Coffey thanked Reynolds for his comments but defended the Government’s approach by highlighting previous Labour policies that had not reinstated the earnings link until the late 2000s. She explained that using ONS data was unreliable due to furlough effects and decided to follow a similar approach as last year, setting aside the earnings link temporarily through legislation.
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Question
Crabb acknowledged the state pension triple lock's positive impact on retired people since its introduction. He argued that this policy was never designed for unprecedented fiscal events like the pandemic and supported the Government’s decision, believing it would be broadly welcomed by pensioners.
Minister reply
Coffey agreed with Crabb’s assessment, emphasising that extraordinary times necessitated a deviation from established norms. She assured that this measure is temporary and intended to maintain pensioner support amidst economic challenges.
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Question
Linden criticised the Government for breaking manifesto promises and argued that the current decision would exacerbate pensioner poverty. He suggested that devolving powers over state pensions to Scotland’s Parliament might address this issue better.
Minister reply
Coffey responded by stating that this measure is temporary and will be restored next year. She mentioned that Scottish Government powers related to state pensions are not being fully utilized, suggesting Linden speak with his Cabinet Secretary in Holyrood.
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Question
Mills sought confirmation from Coffey that this was a one-year change and asked whether the proposed inflation-based increase would realistically keep pace with earnings growth over three years.
Minister reply
Coffey stated that more detailed analysis is needed to estimate likely uplifts in different metrics. She suggested that Mills might wish to ask for these details later once further analysis is available.
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Question
Is it still the Secretary of State’s view that it is important that the level of the basic state pension keeps track with earnings over time, as the coalition pension reforms assumed? If so, will it not require some further adjustment after these two exceptional years? Given that pensioner poverty was starting to increase before the pandemic, after a long period in which, as she said, that did not happen, what will her Department do to increase the currently very low take-up of pension credit?
Minister reply
In response to the first part of the right hon. Gentleman’s question, the legislation is there regarding the earnings link and we are maintaining that. We will be doing further analysis to understand what proportion of median earnings the pension will be, but I have no plans to change aspects of it. The thing about pension credit is that it is split in two: the income guarantee and the savings credit. As I said to the House, our estimate is that 75% of people we think could be eligible take up the income side of pension credit, but the savings side has a much lower take-up.
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Question
Will the Secretary of State promise to publish, at the point when she makes her final determination of the proposed increase, a three-year smoothed average or some other suitable computation so that we can see that the spirit of the promise has been kept, even if the letter could not be because of the strange gyrations of the earnings figure?
Minister reply
I cannot give that commitment to my right hon. Friend today, because I do not know exactly what it involves, so I will take his request away and consider it.
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Question
Despite all the problems that we have heard about, the triple lock was designed to protect pensioners, 2 million of whom live in poverty in this country. Will the Secretary of State clarify two things? First, she said in her statement that the earnings link was set aside last year because of earnings falling by one percentage point. My understanding of the triple lock was that it would always mean the higher of 2.5% inflation or earnings, so would the percentage not have been 2.5% anyway? Secondly, would she be prepared to put it in writing, in legislation, that this is only for one year?
Minister reply
The one year will be set out in the Bill, which I expect to be published tomorrow. The setting aside of the earnings link is because earnings are built into the Social Security Administration Act 1992.
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Question
We do this with a heavy heart but it is the responsible thing to do. I have actually had emails from constituents who are pensioners, saying that they should not get an 8% increase this year, because they understand that these are very unique circumstances. Will she also lay out what the Government have in place to support the lowest-paid and poorest pensioners at this time?
Minister reply
My hon. Friend is right. I am conscious that we want to help our pensioners at this difficult time. We have done a significant campaign in the past year to improve take-up of pension credit.
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Question
There is no glossing over this announcement. The suspension of the triple lock will come as a blow to many pensioners in Denton and Reddish—it is a broken promise from this Government. May I express my dismay that the Secretary of State has not taken the opportunity to respond to the ombudsman’s finding of maladministration in respect of the 1950s-born women’s pensions issue? When will she comment on that?
Minister reply
The hon. Gentleman may not be aware of how the Parliamentary and Health Service Ombudsman works in this inquiry specifically. The inquiry is happening in a staged process; we are not expected to give a response, because the process is not yet over.
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Question
We have become used to the Government’s breaking of manifesto pledges. First, we heard the Prime Minister announce that he would break his pledge not to increase national insurance—which was not just in the manifesto, but something he had specifically singled out and pledged not to do—and now we have heard about the breaking of the triple lock, which was put in place by the last Labour Government and which played a significant part in reducing pensioner poverty. We did not really hear from her any specifics or urgency about the need to deal with the under-claiming of pension credit.
Minister reply
As I have already pointed out, in terms of income guarantee, three in four of the people we have estimated may be eligible are taking up the approach.
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Question
May I press the Secretary of State on the point raised by the hon. Member for Denton and Reddish about the women born in the 1950s, who have paid national insurance contributions for at least 40 years? Many are having to continue working through ill health or else face financial hardship or claim benefits, and now they face higher national insurance contributions. Regardless of which party is responsible for the maladministration that occurred, what I would like to hear from the Secretary of State today is whether she can give them any hope for the future—any hope that she will revisit the issue of compensation.
Minister reply
I appreciate that this is a statement about the uprating, but let me just remind the hon. and learned Lady of the situation relating to the change in state pension age. It was voted through by Parliament in 1995.
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Question
Given that the Secretary of State and every other Tory MP stood on a manifesto commitment not to increase national insurance contributions and hit the lowest paid—whom people gladly applauded every Thursday some months ago—and also affirmed the retention of the triple lock, how on earth can the people of Weaver Vale and people across Britain trust a word that the Secretary of State or any Members on those Government Benches utter in this place?
Minister reply
I think that the people of this country are very wise. I think that they will have seen the £407 billion package provided by this Government to support taxpayers. We are doing our best to protect lives and livelihoods, and I am absolutely convinced that our pensioners will not want a statistical anomaly to be the basis of a pension uplift when they recognise the challenges that this country has faced and what it has been through. I strongly believe that we are doing the right thing, and I hope that it will gain the support of the House when we present the legislation.