§ Mr. ProsserTo ask the Secretary of State for Work and Pensions what plans he has to ensure that growth in pensions is linked to growth in the economy. [35755]
§ Mr. McCartneyThe basic state pension remains the foundation for income in retirement. Increases announced for last April and next in the basic state pension have given single pensioners £2.10 more than an earnings link would have given them and £3.35 more for couples. We have given a guarantee that the basic state pension will be increased by at least £100 a year for single pensioners and £160 for couples in 2003–04, and in future years by 2.5 per cent. or the increase in the September Retail Prices Index, whichever is the higher.
1470WWe are also committed to increasing the Minimum Income Guarantee (MIG) in line with earnings. Around 2 million less-well-off pensioners benefit from this. The income guarantee element of Pension Credit will replace MIG from October 2003 and this will be uprated in line with earnings throughout this Parliament. Around half of all pensioner households will be entitled to it and will be better off because they will gain, year-on-year, a larger increase in their state support than they would receive from an earnings link in the basic state pension.
By April 2002, as a result of this Government's policies compared with the 1997 system, an average pensioner household will be £840 a year better off and around 1.8 million of the poorest pensioner households will be over £1000 a year better off.