Social Security Benefits Up-rating Order 2010

My Lords, I am sure that all noble Lords will find it difficult to think of the noble Baroness, Lady Thomas of Winchester, as a B team player, much as we hold the noble Lord, Lord Kirkwood of Kirkhope, in high regard. I am very pleased to be able to follow her in our discussion on this order. I have an interest as a businessman, and my first observation is on the context in which the Minister placed this order in his introduction. I cannot share his subdued optimism about the immediate economic future. The raising of VAT since January and the ending of the car scrappage scheme are having an impact; they certainly are in the business circles in which I am involved. The outlook for this current quarter, and for subsequent quarters after the election, is not good. However, I thank the Minister and welcome this order, as far as it goes. Noble Lords know that it is not in my nature to be churlish, so I will explain. I acknowledge the particular circumstances of last September’s RPI and the impact on the calculations that had to go into these annual upratings. However, as much as we are generally pleased on this side of the debate to welcome uprating orders, this one contains more than the usual number of disappointments and fudges. Indeed, the Minister has been unusually defensive in his speech presenting the order, and I am not surprised. Although we will not attempt to throw the baby out with the bath water, as the Liberal Democrats attempted to do in another place—I am sure that they are not intending to do so in this place, as we are perhaps more enlightened in how we deal with these things—I hope the Minister will have no doubt about the Conservative dismay at the Government’s refusal to acknowledge the true situation. He must know what the real outcome is. My honourable colleague Mr Nigel Waterson had a frustrating exchange with the Minister in another place on what is or is not a cut. I assure the Minister that when the Government promise that child benefit, disability living allowances, carer allowances and incapacity benefit will rise by only 1.5 per cent less than inflation next year, they are promising a cut. It may not be a cut now, in the months before the election, but it is a cut, and one that will become ever more evident after the election. The Government may continue to kid themselves that the public are fools and do not look beyond the press release headlines, but telling recipients that it is not a cut will not make more money appear in their pockets. Amazingly, the Government have resorted to this sort of defence twice, as the noble Baroness, Lady Thomas, has pointed out. After promising a 2.5 per cent rise in state pension, some Ministers appear to be almost pleased to point out that they only ever actually promised to raise the basic state pension. I do not think that the many thousands of pensioners who will not receive the increase which they thought they were promised will be comforted by the knowledge that it was all their fault for not reading the fine print. Perhaps the Minister will disagree and say that people should not trust the headlines that the media hand out where this Government are concerned. We have examined the small print, and I look forward to hearing how the Minister responds to my observations on it.