With your permission, Mr Speaker, if I dare ask for it, I should like to answer this question with questions 6 and 7.
Even in these constrained times, the coalition Government have been able to find additional assistance for pensioners. We have re-linked the basic state pension to earnings and provided a triple guarantee that the basic state pension will be raised by the higher of earnings, prices or 2.5% from next April. We have also protected other key pensioner benefits and made the previous Government’s temporary pre-election increase in cold weather payments permanent, because this Government treat pensioners with the dignity and respect that they deserve.
I am grateful to the Chancellor for that reply. Many pensioners and those approaching pension age in my constituency of Selby and Ainsty will welcome his words, but will he tell me what will be the impact in future years of the link to earnings in respect of the basic state pension?
First, next year, the pension will be linked to the retail prices index number for September—4.6%. That will be a welcome support for pensioners from April. However, I should make the broader point that of course, re-linking pensions and guaranteeing through our commitment that they will go up either in line with earnings or prices, or by 2.5%, is a really substantial boost for pensioners. That reflects the fact that many pensioners have worked hard and saved hard all their lives. I am glad that that was one of the first policy announcements of this coalition Government.
The spending review set out a £470 million package of support for the voluntary sector, including an endowment fund and a transition fund. In addition, the big society bank, which will be funded by dormant bank accounts, will provide a new source of finance for the sector. The Government completely understand the incredible role that such organisations play in supporting elderly people in our community, and we want to help them to do so.
We will remove the requirement to purchase an annuity by the age of 75. Draft legislation will be published in December, and we want the new rules in place by 2011, although we have also introduced transitional arrangements to help those who have reached the age of 75 since I made the announcement in the Budget. We think that people who have been responsible enough to save through their working lives are responsible enough to handle their savings in retirement.
Will the Chancellor commit to working closely with the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb) to introduce the universal, flat-rate, minimum pension for all citizens as quickly as possible?
Pensioners, including many of those on low incomes, spend a disproportionate amount of their income on fuel. The Chancellor made the point about the winter fuel allowance, which was very welcome, but will he make it clear to the gas and electricity suppliers that, when they raise fuel costs above anything justified by wholesale prices, as they always do, the Government will take action, hopefully by threatening them with fiscal measures, including taxing them?
I agree with part of what the hon. Gentleman said. It is important that the utility companies—the gas companies—are as quick to pass on to their customers the cuts in the wholesale price of gas as they seem to be in passing on increases. We are looking at the whole electricity market—because, of course, many pensioners receive their heating through electricity—and considering what we can do to better insulate people from price fluctuations that can cause havoc to family budgets.