Christmas Bonus (Specified Sum) Order 2008

I thank both noble Lords for their welcome and support for the order. Each reflected on the fact that it will be paid in two chunks and that the £60 will not be paid until between January and March. That is a logistical issue; obviously if it had been possible to pay it earlier it would have happened. However, this is a good mechanism with which to create the same effect as with the accelerated payment of the basic state pension on its uprated basis until January. The noble Lord, Lord Skelmersdale, challenged whether it would be spent. We believe that it will. It is more likely to be spent than if the resources were directed to other groups. Why do I say that? Generally pensioners are less indebted than other members of the community and generally, of course, pensioners are less concerned about the prospect of loss of employment. They therefore make savings to provide for this kind of rainy day. We believe it is as likely to be spent by this group as by any other. The noble Lord suggested that these are small amounts which would not make much difference. They are not insignificant to the recipients of them and, again, are part of the package. The noble Lord, Lord Oakeshott, referred to the basic state pension and the adequacy or otherwise of that. He will be aware that the reforms we debated and dealt with in the Act last year will provide in 2012 or by the end of the next Parliament, depending on resources, that the basic state pension will be uprated in line with earnings. He is aware of the changes and improvements that have been made to the state second pension as well. When considering incomes for pensioners, you need to take account of occupational pension provision and, again, the noble Lord will be aware of the significant changes in the Act that we passed a few weeks ago. On the rate of the basic state pension, I have in mind the statistic on which we had some exchange during the passage of the Bill—that is, if you double the basic state pension in 2012, in 2050 you would still have 25 per cent of the population on some kind of means-tested benefit. To assume that jacking up the basic state pension on an affordable basis would eliminate means testing is not right. As to the impact of the £5 increase on the basic state pension, you need also to consider what has happened to the minimum income guarantee in pension credit. On the basis of the upratings, a single person will receive a minimum of £130 a week and a couple £198 a week. These are significant improvements from where we started. The Government were right, and continue to be right, to target resources on those pensioners who most need it.