Social Security Benefits Up-rating Order 2012

My Lords, at the start, we acknowledge that the Government have rejected the voices within their ranks that would have watered down even the full CPI increase for these upratings. The order before us deals with the most out-of-work benefits, but it of course does not deal with changes to tax credits, which we shall debate shortly. We have heard from the Minister that the upratings order amounts to increasing benefits by £6.6 billion, but that is dealing on one basis with the effects of inflation; it is not addressing the real cuts that are being made to employment support allowance, housing benefit, support for disabled children, DLA, council tax benefit, child benefit and tax credits. By 2015-16, just three years hence, the Government will be pocketing £10 billion-plus per year from the CPI switch to benefits, tax credits and public service pensions. We have no points to raise on the Guaranteed Minimum Pensions Increase Order, and support it. On the abolition of protected rights consequential amendments order, we have some brief questions. Post-abolition of contracting out on a DC basis, schemes will not be required to keep track of protected rights payments, so, as we have heard, the court will not be able to identify them when setting income payment orders for a debtor. Consequently, protection of accrued rights payments from income payment orders will now be retrospectively removed. Does that mean that creditors can ask for income payment orders to be revisited in the light of that loss of protection? If trustees amend their scheme rules to reflect the abolition of protected rights and a scheme member is subsequently subject to an income payment order, could the trustees be in breach of Section 67 of the Pensions Act 1995, a section that protects accrued rights and for which there is no statutory override? The order has the consequence of retrospectively removing protected rights accrued, albeit in the instance of an income payments order being issued. Is a precedent being set here, and would it not have been possible to set some sort of pension income threshold below which the courts cannot take account of income when issuing income payment orders as an alternative approach? As in the other place, the Minister referred to the triple lock for pensioners, but without being too repetitive, as my right honourable friend Stephen Timms made clear it had to be set aside last year, with RPI being used to uprate the basic state pension rather than the CPI. For 2012-13, the CPI again gives a lower increase, but on this occasion it is not to be set aside. The basic state pension increase is 5.2 per cent—the relevant inflation factor under the triple lock, as we have heard—but the minimum guarantee element of pension credit is being increased by 3.9 per cent, which is equal to the cash value of the increase in the basic state pension. The earnings increase for the relevant period was 2.8 per cent. We recognise that both the basic state pension and the guaranteed pension credit have increased by more than earnings, but the guaranteed credit has fallen in relation to the basic state pension, which means that the poorest pensioners have become poorer relative to those on a full state entitlement. The pension reforms intended that pension credit should keep its value relative to the basic state pension so that the poorest pensioners did not get relatively poorer. This will be the consequence of applying the triple lock to basic state pension but not to the guaranteed credit. Although state pension reforms will improve the position for future pensioners, research produced by the PPI confirms that pension credit will continue to play a significant role in addressing pensioner poverty for some time to come. Perhaps the Minister will confirm the Government's intention as to the value of the guaranteed pension credit over time when compared with the basic state pension. On some further points of detail, I would be grateful if the Minister could respond to the following questions. Last year, the uprating statement was accompanied by an equality impact assessment. Is an updated one to be prepared? Paragraph 4.7 of the Explanatory Memorandum explains that, as for last year, certain rates of invalidity allowance, age addition and age-related additions payable with any capacity benefits are to be reduced to further align rates of incapacity benefit with those of ESA prior to completion of the IB reassessment process. Can the Minister say how this sits with the commitments to transitional protection on migration to ESA and remind us of what those commitments were? Paragraph 7.5 refers to the savings credit threshold increases that, it recites, are to fund the increases in the standard minimum guarantee—indeed, the Minister confirmed that a moment ago. However, can he please provide us with a breakdown of the figures? How many people will cease to be eligible for pension savings credit because of this level of increase? How many will suffer a reduction in the savings credit? Have the savings on passported benefits been taken into account, and what are these benefits? With regard to non-dependant deductions, can the Minister tell us what the estimated reduction in housing benefit and council tax benefit arising from the above-inflation increase is for those items in 2012-13? Paragraph 7.11 refers to deductions made where a service charge is included in a rental agreement. The deduction is to be uprated by 18.3 per cent, which we understand is the CPI rate for fuel. How is this supposed to work? Is this increased deduction to be applied only to any component of the service charge that relates to heating and lighting, and is it irrespective of the actual rates of increase of the particular service charge involved? I turn to a point that cropped up in the other place. Can the Minister also confirm that local housing allowance rates are to be frozen from April 2012 in preparation for the linking to CPI? Can he further say what CPI measure will be applied: that is, the CPI at what date? Paragraph 11 relates to the impact on small business. It confirms that small businesses are fully reimbursed for statutory adoption pay, statutory paternity pay and statutory maternity pay, and small businesses are defined as those whose annual gross national insurance payments are £45,000 or less. Can the Minister tell us when the £45,000 figure was last uprated, and approximately how many small businesses now benefit from the full reimbursement? Paragraph 10 of the Explanatory Memorandum states that the full impact assessment has not been published for the uprating order because the annually recurring costs are already in the government expenditure plans. This raises the obvious question of the performance of the work programme, because any slippage in performance will mean that uprated benefits dealt with in this order will increase government expenditure. There are lots of issues swirling around this programme and its effectiveness, not least the participation of A4e, which was awarded five contracts in April last year, and press reports express concerns about the position of subcontractors, especially from the voluntary sector. As part of an impact assessment on this uprating, especially as it affects JSA and ESA, can we now have the publication of performance data, and can the Minister say what guidance providers have been given about data that they should be gathering for monitoring purposes? As explained in the other place, some elements of these orders are acceptable but some are not—in particular, the permanent adoption of a lower rate of inflation uprating for pensions and other benefits, which we cannot support. Had it been adopted as a temporary measure to support the deficit reduction programme, we would have considered supporting it. However, we know from the DWP's own figures that over a 15-year period it would impact on, for example, occupational pensions to the tune of £70 billion. Over a longer period, the hit on pensioners would be even greater, and this is why we cannot support it. Nevertheless, can the Minister say whether, should the CPI be refined—and there is some work going on to do this—to show a higher rate for inflation than the current basis, the Government would adopt that?