Pensions

Oral Answers to Questions — Social Security – in the House of Commons at 12:00 am on 17th November 1997.

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Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 12:00 am, 17th November 1997

What assessment she has made of the benefits of calculating future pension increases on the basis of the rise in average earnings. [14640]

Photo of John Denham John Denham Parliamentary Under-Secretary (Department of Social Security)

We are committed to increasing the basic state pension at least in line with prices. Pensioners can be reassured that, for 1998, we are meeting that commitment. The basic state pension—including its value—the state earnings-related pension scheme and other issues of concern to pensioners are being considered as part of our pensions review, which will report in the first half of next year.

Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North

Does my hon. Friend recognise that one of the great achievements of the last Labour Government was the linking of pensions with either prices or earnings, whichever was rising faster? As a result, pensioners enjoyed a much higher standard of living under that Government. The last Tory Government cut the link, thus robbing every pensioner of more than £1,000 a year. Does my hon. Friend accept that a high basic state pension, linked to earnings, is cheap to administer, is fair, and will do a great deal to eliminate the disgraceful levels of poverty that many older people have to endure?

Photo of John Denham John Denham Parliamentary Under-Secretary (Department of Social Security)

As we said in our manifesto, we want all pensioners to share fairly in rising national prosperity. We must take into account all the sources of income that enable pensioners to share in national prosperity—pensions from the state, pensions from non-state sources, benefits, savings and other forms of pensioner income—and we will do that in the review.

The basic state pension is the foundation stone of pension planning for retirement, but it is also important for us to enable people to complement it with a second pension—an occupational, personal or stakeholder pension—to ensure that they can enjoy security in retirement.

Photo of Iain Duncan Smith Iain Duncan Smith Shadow Secretary of State for Work and Pensions

Will the Minister confirm that the review will consider re-establishing the link, either partially or wholly—possibly for all pensioners, or even just for those who start receiving pensions after the review is complete? What will be the range of the review in that context?

Photo of John Denham John Denham Parliamentary Under-Secretary (Department of Social Security)

Our manifesto makes it clear that all aspects of the basic state pension—including its value—will be considered in the review.