I beg to move that the Grand Committee do report to the House that it has considered the draft Social Security Benefits Up-rating Order 2017. In my view, the provisions in this order are compatible with the European Convention on Human Rights.
Today we are debating the Social Security Benefits Up-rating Order 2017. This statutory instrument reflects the Government’s continuing commitment to: increase the basic and new state pension with the triple lock at 2.5%; increase the pension credit standard minimum guarantee in line with earnings at 2.4%; and increase benefits to meet additional disability needs and carer benefits in line with prices at 1%.
The Chancellor reaffirmed this Government’s commitment to the triple lock for the length of this Parliament in his Autumn Statement on 23 November 2016. This ensures that the basic state pension will continue to be uprated by the highest of earnings, prices or 2.5%. This year, the increase in average earnings and the increase in prices were less than the baseline of 2.5%. As such, the basic state pension will increase by 2.5%. This means that from April 2017 the rate of the basic state pension for a single person will increase by £3.00 to £122.30 a week. As a result, from April 2017 the basic state pension will be more than £1,200 a year higher compared to April 2010. We estimate that the basic state pension will be around 18.5% of average earnings, one of its highest levels relative to earnings for more than two decades.
Last year, the Government introduced the new state pension for people reaching their state pension age from 5 April 2016 onwards. This made the system clearer, providing a sustainable foundation for private saving. The Government have previously announced that the triple lock will apply to the full rate of the new state pension for the length of this Parliament. This is the first year that the new state pension will be uprated. As such, this year the full rate of the new state pension will increase by 2.5%. This means that from April 2017 the full rate of the new state pension will increase by £3.90 to £159.55 a week. This will be around 24.2% of average earnings.
We are continuing to take steps to protect the poorest pensioners. This includes through the pension credit standard minimum guarantee, the means-tested threshold below which pensioner income need not fall. The pension credit standard minimum guarantee will rise in line with average earnings at 2.4%. This means that from April 2017 the single person threshold for safety-net benefit will rise by £3.75 to £159.35. Pensioner poverty continues to stand at one of the lowest rates since comparable records began.
I turn to the additional state pension. This year state earnings-related pension—SERPS—and the other state second pensions, together with protected payments in the new state pension, will rise, in line with prices, by 1%. On disability benefits, this year the Government will continue to ensure that carers and people who face additional costs because of their disability will see their benefits uprated in the usual way. Disability living allowance, attendance allowance, carer’s allowance, incapacity benefit and personal independence payment will all rise in line with prices—by 1%—from April 2017. In addition, disability-related and carer premiums paid with pension credit, and working-age benefits, will increase by 1%, as will the employment and support allowance support group component, and the limited capability for work and work-related activity element of universal credit.
The Government will be spending an extra £2.5 billion per year in 2017-18 on uprating benefit and pension rates. In this order we continue to maintain our commitment to the triple lock for both the basic and the new state pension for the length of this Parliament. We also commit to increase the pension credit standard minimum guarantee by earnings and to increase benefits that reflect the additional costs that disabled people face as a result of their disability, and carer benefits, in line with prices. This includes increases to the disability living allowance, attendance allowance, carer’s allowance, incapacity benefit, personal independence payment, and disability and carer premiums.
On that basis, I beg to move.
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