Christmas Bonus (Specified Sum) Order 2008

I start by sharing with the Committee an acute observation that my noble friend Lady Walmsley has just made. She is sitting here patiently waiting until the Committee comes to her order, and I am sorry that our proceedings have rather dragged on today. She points out that the fact the payment is being made after Christmas probably means that pensioners have more chance of having some money to spend on themselves rather than on their grandchildren. We welcome this payment on a rather grudging and limited basis, not because we do not think that pensioners need £70 but because they need an awful lot more. So long as the Government persist in their mean and means-tested policy on basic state pensions, pensioners will need every bit of extra help they can get, so we support it. But we do not like the policy that Gordon Brown has constantly promoted in his Budgets, which is a series of one-off stunts, wheezes and individual payments to pensioners. They are entitled to a decent basic state pension on which they can live without means-testing and the problems of destroying incentives that our heavily means-tested pension system involves. Pensioners should not be put in the position of cottagers waiting for the squire or his lady to come round and hand out a turkey at Christmas; they should be paid a pension on which they can live every week of the year. In the Commons, Tony McNulty proudly said that the increase in the state pension—up, from April 2009, to the magnificent sum of £95.25 a week—would represent a real-terms rise in the state pension of 7 per cent since 1997. Pensioners are better off by 7p in the pound on the basic state pension after 11 years of Labour government. What has been the rise in average real incomes generally over that period? I imagine that the figure is about 30 per cent; perhaps the Minister could confirm that. Pensioners’ basic state pension has risen only one-quarter as fast as real incomes generally for other people. On the means-tested state pension, I challenge the Minister to say how it can continue to be fair that pensioners who have saved a modest amount of money in their life—over £6,000—have their savings credit deducted on the assumption that they are able to earn 10 per cent on their savings, so that for every £500 they can earn £1 a week. In fact, it is slightly more than 10 per cent. Where can pensioners possibly get any rate like that? They could not get it even from a dodgy Icelandic bank a few months ago, and now pensioners, like other savers, are seeing their returns cut to ribbons. Will the Minister and his department urgently reconsider this grossly unfair limit and reset it at a level that more fairly reflects the returns that pensioners can get from their savings?