HC Deb 15 December 1997 vol 303 c16
18. Mr. Mitchell

What is her estimate of the extra cost of tying the pension increase for the coming year to earnings rather than prices. [19074]

Mr. Denham

The estimated additional net cost of paying contributory retirement pension and all linked benefits uprated by the average earnings index rather than the retail prices index is £150 million for the financial year 1998–99.

Mr. Mitchell

As the cost is comparatively small and as the Government's finances are in a much better state than had been thought—the deficit will probably be about £3 billion lower, so there is money available—why do we not compensate pensioners for the 18 years during which Tory Governments did not tie increases to average earnings, but only to the retail prices index? Why do we not give pensioners a Christmas bonanza and say that we will tie increases to average earnings in future?

Mr. Denham

The future uprating of the basic state pension is being considered by the pensions review. I have had a series of invaluable meetings with the National Pensioners Convention in an effort to understand the views of many of today's pensioners. I cited a cost of £150 million, but we have also announced £200 million for pensioners this winter. We have not only met our manifesto commitment to uprate the basic state pension at least in line with prices; we have made another £200 million available. We have met our manifesto commitment to enable pensioners to share fairly in our national prosperity and we have given priority to the poorest pensioners—another manifesto commitment.

Mr. Forth

What assessment has the Minister made of the impact of the council tax increase on pensioners' standards of living? What explanation does he have for the inordinate number of Government Whips on the Treasury Bench today? Could it be connected in any way with the Government's desire to keep at bay their own critics?

Mr. Denham

The pensions review is examining all issues of concern to and insecurity for today's pensioners. We are actively discussing those issues with the National Pensioners Convention and with many other pensioners' organisations.