Social Security

I shall now follow your strictures very seriously, Madam Deputy Speaker, and turn to the details of the order. The Minister mentioned a global figure for the uprating of £4 million. I have to ask about that, given the way in which things have gone missing recently. The Government Actuary's Department reported, on the basis of the draft uprating order, that the estimated increase in benefit payments in 2008-09 is £2,663 million, which is some £2.6 billion, not the £4 billion that the Minister mentioned. I have been guided by a helpful note from the Library. The Minister pulls a face again: if he wants to give me some better information on what the Government Actuary's Department said on the basis of the draft, I should be happy to receive it, as well as an account of the seemingly missing £1.4 billion. I ask because, today especially, it is important to scrutinise every item of Government expenditure, including those that seem to get lost. Whether measured by the retail prices index or the Rossi index, the indexation reflects greater inflationary pressure. We understand from the details of the explanatory memorandum that the benefits indexed by reference to the RPI will rise by 3.9 per cent., and that benefits subject to the Rossi index—RPI less housing costs—will rise by 2.3 per cent. In order to form a view of the order, it is important to compare that with the position in previous years. The indexation compared to RPI last year was 3.6 per cent., and it was 2.7 per cent. in the year before that. The recipients of those benefits are therefore subject to a rising inflationary pressure. That rising trend is underlined by last week's bleak economic assessment by the Governor of the Bank of England. The Minister pulls another face at the word ““bleak””, but I suggest he pay heed to the Governor's warning of a rise in inflation that is likely to be so steep that he will probably have to write another letter to the Chancellor of the Exchequer explaining why inflation has risen so far above its target. We have to bear that warning in mind because, as a result of those inflationary pressures, families face a genuine reduction in their standard of living, unless we make the necessary provision. That has implications, of course, for the families who are subject to the uprating in this order. They can be vulnerable to the inflationary pressure described by the Governor of the Bank of England, especially as he specifically highlighted the higher level of energy and food prices, which form a higher proportion of the budgets of families on low incomes and pensioners. It would appear that inflation has now risen to a seven month high with a jump last month and that fuel inflation, in particular, is running at 19.3 per cent., which is the highest since records began to be kept in 1997. That is a very high level for fuel inflation. Some estimates put the average household bill for gas and electricity close to £1,000. We also see alarming reports about the proportion of pensioner budgets that are spent on those items and on council tax, a subject of concern to many pensioners to which I shall return later. We certainly need to keep that well in mind. It is a source of anxiety for pensioners and those close to retirement. One survey from a reputable source recently showed, perhaps in contrast to the rosy picture painted by the Minister, that inflation movements are the biggest retirement worry for people nearing life after work.