Pensions and Social Security

I shall not detain the House for long, I hope. We have had an interesting debate, which was begun by the Minister and my right hon. Friend the Member for East Ham (Stephen Timms), who discussed some of the technicalities and complexities of uprating. I shall confine my remarks largely to the most controversial of the motions—the motion on the draft Social Security Benefits Up-rating Order 2012. The contributions from Back Benchers have illuminated some of the issues at hand. The hon. Member for Truro and Falmouth (Sarah Newton), who is no longer in her place, made a heartfelt defence of what she described as the coalition's sense of national mission. ““Our great nation is in great peril,”” she declared, although I am glad she cautioned that she is not doing cartwheels. I would never have made such a claim. She suggested that there has been a constant and very upsetting misrepresentation of the Government's wider policy in this area, which she sought to correct by sharing the experience in her constituency. Not content with her party being in government, she was also keen to give the Opposition the benefit of her wisdom on how they should proceed on these and other matters. My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) emphasised the great concern there is outside the House regarding the permanent switch from RPI to CPI and declared her support for an immediate return to RPI indexing. She emphasised that CPI indexing means a smaller rise for pensioners and out-of-work citizens over time. My right hon. Friend the Member for East Ham referred to the 0.7% average difference between an RPI and a CPI measure and my hon. Friend the Member for North Ayrshire and Arran emphasised from the Back Benches that if we had been using the RPI measure this year, the increase would have been 5.6% rather than 5.2%. She set out the real cumulative impact that the switch in indexing will have over time on the pensions and benefits of some of the more vulnerable members of our society. The hon. Member for Bury St Edmunds (Mr Ruffley), in what he described as a spirit of honest inquiry, set out some challenges for those on the Government Front Bench. He emphasised the public spending implications of a 5.2% rise based on a CPI measure in September. If I understood his argument correctly, he would have preferred to use either a six month figure, which he calculates would save the Treasury £780 million, or an average over 12 months until April 2012 using a forecast for this current quarter. That would have created an overall indexing figure of 4.4% and saved £1 billion, according to him. He put that in context by explaining that the real cost of living increase in the coming year will be 2.8%, which, if applied, would save the Treasury £3 billion, based on his calculations.