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Social Security Benefits Up-rating Order 2022

Volume 820: debated on Wednesday 23 March 2022

Motion to Regret

Moved by

That this House regrets that the Social Security Benefits Up-rating Order 2022, and the decision by Her Majesty’s Government to suspend the triple lock on pensions, will result in benefit increases of 3.1 per cent in April 2022, compared to the Bank of England forecast of a 7¼ per cent increase in the Consumer Price Index for that month, and that this will result in a basic state pension for a single pensioner that will be worth £296 less in real terms compared to 2021/22, and £475 less for a couple.

My Lords, this debate has been a little time coming but I make no apology for making sure it takes place. Unfortunately, I was unable to take part when the order came before Grand Committee as I was active in the Chamber at the same time. However, I was happy to adopt the Government Whips’ idea of this separate debate on the regret Motion.

In the event, this has the advantage that we now know a lot more about where we are with the increase in social security benefits that will take place in two weeks’ time. The new information is not good. Inflation in February was higher than expected, at 6.2%, and is certain to be even higher at the beginning of April when the benefit increase comes into effect. The effect is spelled out—this is why it is good to have the debate today—in today’s economic and fiscal outlook from the OBR. This states that, because of lags in the CPI uprating of welfare benefits, benefits will fall by almost 5% in real terms. To be clear, the poorest in our society are facing a 5% reduction in their income when they are already in poverty.

Further, the OBR report states that £12 billion is being taken away from poor people and that it will take up to 18 months fully to catch up with that reduction. I could speak at length about what this means for individuals in human terms, but I will simply refer the Minister to the heartfelt contributions made in the Opposition day debate in the Commons yesterday. I urge her to take the time to read that debate if she has not already done so. That is the human cost.

I want to make three additional points, to which I invite the Minister to respond. I shall not dwell too much on the Labour Party’s position on the uprating—I look forward to my noble friend’s contribution from the Front Bench.

First, does the Minister recognise that it is no consolation to people who are already in poverty and suffering a further cut in their real income to be told that it all averages out over time? We are told, in effect, that the loss of income they are facing, and from which they will suffer in the coming year, is not that important because at some point in the future—the OBR estimates it to be in 18 months’ time—they will receive an increase that will make good the shortfall. They are already in poverty, and they will have to endure 18 months of even greater poverty because of a defect in our benefits system. For people in poverty that is simply not good enough. Eighteen months is too late, as even in the subsequent better year they will remain in poverty. They have already suffered the effect of poverty on their lives and they simply lack the resources to even out their income over the years.

The question is what can be done about it. The Minister told the Grand Committee that

“It is not possible to undertake the uprating exercise any later than currently timetabled.”

But she also told the Committee that

“All benefit uprating since April 1987 has been based on the increase in the relevant price inflation index in the 12 months to the previous September.”—[Official Report, 9/3/22; col. GC 484.]

In truth, the seven-month delay goes back even longer. I recall discussing this with the relevant department back in the 1970s. I find this less than impressive. Seven months is too long when inflation can change so rapidly. Despite all the advances there have been in handling and processing data in the past 35 years, it appears that we still cannot do any better.

I quite understand the department’s resistance to making any change, but faced with the suffering caused for the poorest in our society, we must find some way to achieve a closer alignment of increases in prices and benefits. For sure the index we use could be more up to date, and I refuse to believe that this cannot be done through greater use of modern technology. The department simply needs to invest more in computerising its records. I also suggest, more radically, that where an increase falls short, an adjustment should be made during the course of the year when it becomes apparent, plus provision for back pay to cover the gap that has arisen because of the shortfall increase.

My second point is that the resources are there in the National Insurance Fund to pay higher pension increases. We have the advantage on this occasion of the welcome report by the Government Actuary that is attached to the draft order. This tells us that, for the next five fiscal years, the balance in the National Insurance Fund will increase from £53 billion at present to £76 billion in 2027. In percentage terms, that is an increase when expressed as a percentage of benefit outgo from 48% to 55%. It is worth comparing those figures with the 16.7% that the Government Actuary recommends as the minimum fund balance. It is also worth emphasising that that is without allowing for the possible Treasury grant, which is an integral part of national insurance as originally conceived. This can amount to 17% of benefit payments. It is simply untrue to say that the money is not available. It is not that the money is not there; it is that there is a political choice not to pay.

I had the benefit of a letter this morning from the Treasury Minister, the noble Baroness, Lady Scott of Bybrook—the other Baroness Scott—referring to the Government Actuary’s quinquennial review, which was presented to Parliament last week. In her letter, she states:

“Increasing spending on today’s pensioners would pass the costs onto future generations of taxpayers.”

Well, I would welcome an opportunity to discuss the quinquennial review, and perhaps the Government Whips would provide the time. However, given the limited time available this evening, I say simply that the review, while commendable, tells us only part of the story. Taking the figures from the OBR, along with those from the Government Actuary, there will be the resources available in 2085 for everyone to be better off, even if national insurance contributions reach the level suggested in the Government Actuary’s report.

My final point relates to the triple lock. How much credence can we give to the Government’s repeated promises to keep to the triple lock for the basic state pension and the new state pension? On Monday in the Commons, after some confusion on the part of the Secretary of State, she said:

“I am again happy to put on record that the triple lock will be honoured in the future”.—[Official Report, Commons, 21/3/22; col. 99.]

But she said the same thing back in 2020, and subsequently broke the promise. The Minister here made a similar commitment in Grand Committee. The truth is that we already know that this Government are prepared to break their promise to maintain the triple lock, which was given voluntarily in the election manifesto and subsequently repeated by the Prime Minister.

The explanation given by the Minister here when this was discussed in Grand Committee was that

“setting aside the earnings link in the state pension triple lock for the year 2022-23 … was in response to exceptional circumstances”.—[Official Report, 9/3/22; col. GC 475.]

The problem is that we do not know what counts as the exceptional circumstances in which this Government will break their promise again. On this occasion, with the current uprating that we are talking about, we are told that the exceptional circumstances are the effect that coming out of the Covid measures has had on the earnings index.

So the question is not whether the Government will break their promise. We know that they are capable of breaking their promises. What we do not know about is the possibility that they will break their promise for further exceptional circumstances.

We simply cannot rule out the possibility that, come next November, when a decision is taken on next year’s uprating, it will be decided that this coming September’s CPI index is exceptional or anomalous. To be honest, with the prospect of it being more than 8%, according to the OBR, I hope that it is exceptional. I return to the OBR report and the nice graph—I cannot show it to noble Lords because that is against the conventions of the House—in which there is a leap up to the September figure, when it could be in excess of 9%, which is exceptional. What promise can the Government give that they will not say that these are again exceptional circumstances?

To conclude, can the Minister give us an unequivocal commitment, now, that whatever the CPI increase in September—8% or 9%—this will be applied to the 2023 increases?

My Lords, it is a pleasure to follow my noble friend Lord Davies of Brixton, who spoke with great passion and eloquence to put the Government to shame for the plight of our senior citizens, who continue to be treated very badly.

The state pension is the main or only source of income for the majority of our senior citizens—they rely upon it. The Government introduced the triple lock but, despite it, pensioner poverty has actually increased; it has not decreased. The statistics show that many of our pensioners continue to suffer. From next month, the pension will rise by 3.1%. Pensioners and others face RPI, not CPI: try buying broadband and you will be told that the price will increase by RPI-plus, not CPI. People face increases in line with RPI, which is already about 8%. Last October’s Treasury Red Book showed that by suspending the triple lock the Government were denying retirees £30.5 billion over the next five years. That is a vast sum. They will never be able to catch up or make good the lost purchasing power.

The Government do not treat our senior citizens with any equity or respect. The winter fuel payment has been unchanged since 2011. Even before the current rises that are coming our way, the winter fuel payment would have had to double simply to cope with price rises and rates of inflation—the Government never increased it. A Christmas bonus was the grand sum of £10 in 1972. If it had kept pace with inflation, it be about £150; it is still exactly £10. The Government removed the free TV licence from the over-75s. It is no good saying that there are some who will still qualify for it if they negotiate the bureaucratic maze; many will simply not be able to and will either pay or volunteer to go to prison, because the Government want to criminalise avoidance of the TV licence fee. At least some of our senior citizens will get warmth and some food there, and some may well take up that particular option.

The Government still do not like people getting old. There are no prescription charges in Scotland, but the Government here are raising the free prescription age from 60 to 66. Why England has to be an outlier, I do not know.

In the last Budget, the Government handed £4 billion of tax cuts to banks. They took money away from pensioners and instead gave it to banks, which are absolutely awash with cash. Banks offer you a measly 1% interest on your savings and charge you 40% on your overdraft, but they are bailed out by the state, which acts as a lender of last resort. If that were not enough, it also handed £895 billion of quantitative easing to speculators, including banks, which made vast profits from that. But the Government do not want to pay our senior citizens a decent pension. That is a huge wealth transfer, which tells us something about the Government’s value system.

Some 2.1 million retirees live in poverty—women in particular. There is no equality in the state pension age. The numbers given to me by the Minister in a response to a Written Question show that women’s state pension always lags behind that of men. If we are equalising the retirement age, why not the actual pension itself? Why is that lower? Women inevitably lose out because they are not only child-rearers but unpaid carers, and they then get penalised and condemned to a life of insecurity and poverty. That is unacceptable.

The Government have saved over £1.5 billion because thousands of retired people have died from Covid. The Government did not see fit to redistribute that £1.5 billion or more among the retired pensioners; they have simply kept it, or handed it out in various other forms of tax cuts to others. That again is utterly unfair.

We have to look at how pensioners are treated. No one can live on a state pension that is half the minimum wage. If Ministers think that is good enough, I invite them to try to live on it for a month and see how they get on—then they can recommend it to everyone else. I am willing to bet that no Minister would be able to survive. We have to aim to ensure that the state pension is not less than the living wage. If that is the minimum that people need, why is the state pension any lower? It is utterly unjust.

The Minister will say that pensioners can apply for pension credit and numerous other benefits, but the fact is that they do not because they cannot negotiate the bureaucratic maze. Trying to fill out the forms and access these things online is bad enough for many other people, but many seniors do not even have access to broadband because they cannot afford to pay for it or to buy a computer. You cannot go to your local library to use the computer there; many libraries have shut, and in many of the libraries I have visited their computers are too old—they are so slow that they seem to be steam-powered, and you cannot do the necessary work on them.

The Government have to rethink their priorities. The civility of a nation is judged by how well it treats its poor people and its senior citizens, and on that this Government would be pretty low in the league. The typical state pension in OECD countries is about 60% to 63% of the average wage; here it is 25% to 26%, and there is no justification for that. I sometimes wonder whether Ministers sit around the Cabinet table and say, “I have found a new way to hurt senior citizens. Can anyone think of anything else?”

In two years’ time, senior citizens trying to top up their meagre state pension will have to pay the extra 1.25% health and social care levy. At the same time, those who make billions from capital gains will pay zero. What is the logic in exempting those rich enough to receive capital gains from paying national insurance or a penny of the proposed health and social care levy when the Government will be charging senior citizens? If we taxed capital gains in exactly the same way as earned income and charged national insurance on that, it would raise at least £25 billion a year—more than enough to fund a massive increase in the state pension. That is assuming that Ministers do not really want to spend the money in the National Insurance Fund account, which, as my noble friend Lord Davies of Brixton pointed out, has a massive surplus.

There are numerous other ways of doing this. We could change the way that national insurance is levied. At the moment—although this is going to change next month—up to £50,300, national insurance is levied at the rate of 12%, but beyond that at only 2%, which is utterly regressive. If we said all of that were to be subject to a 12% national insurance charge, it would raise £14 billion, which would be more than enough to give our senior citizens dignity. I fully support my noble friend Lord Davies’s Motion.

My Lords, I am grateful to my noble friend Lord Davies of Brixton for tabling this regret Motion, and it is very well-timed given that today was the Spring Statement.

The Chancellor promised that he would stand by people in the face of the cost-of-living crisis, but it seems that this promise does not extend to parents struggling on social security benefits. Instead, I fear it is an attitude of “Let them stand on their own two feet”, and wait a year for “smoothing”, as benefits catch up with inflation—a year when some parents could go under with the strain. For all the talk of “security” in the Chancellor’s speech, there is nothing to address the insecurity experienced by social security recipients. Additional assistance to local authorities for discretionary help is no compensation for the security provided by weekly benefits that meet people’s needs. As the Women’s Budget Group points out in its very quickly produced Spring Statement analysis,

“The Chancellor has left women in the lurch”,

and raising social security would have done much more for those on low incomes than raising the national insurance threshold.

Since we debated the uprating order in Grand Committee two weeks ago—it feels like a lifetime, but it was two weeks ago—three research reports have been published that reinforce the arguments I put then for an additional uprating to match the inflation rate. I am not going to go over everything I said then, but the Trussell Trust pointed to a

“crisis of our social security system, which is failing to support people to keep their heads above water.”

A recent Carers UK survey found that, among carers in receipt of carers allowance or the UC carer element, nine out of 10 are already stressed and anxious about their finances, and generally carers’ financial situation has worsened considerably over the six months since it last did the survey. The findings of a new Covid Realities report published this week was summed up in the conclusion that

“‘There is nothing left to cut back’ - people have reached the limits of their budgeting practices and resourcefulness.”

with implications for their physical and mental health. The report commented on the

“disbelief at the perceived lack of understanding among policy-makers of the scale and severity of the difficulties people were facing.”

I am afraid we have seen all too many examples of this in the last few weeks. When, in an OQ last week, I asked the Minister’s colleague, the noble Baroness, Lady Scott of Bybrook, what are parents on benefit, who have already cut back to the bone, supposed to do if benefits are uprated at a fraction of the inflation rate, in response she intoned what the Government are spending in total on benefits but did not answer the question. Following the very disappointing Spring Statement, I ask again: when there is nothing left to cut back, what are parents struggling on an inadequate benefit supposed to do over the coming year? How are they supposed to get by?

I believe that this Minister does understand, to some degree, the difficulties faced, and she cares. Unfortunately, she can do no more, it appears, than take messages back to the department and the Treasury. But she can at least today answer the question. Indeed, I ask her to tell us: what would she do if she had to get by on inadequate benefits that are being eaten away by inflation?

My Lords, I thank the noble Lord, Lord Davies, for his regret Motion, which I agree with.

It is estimated that one in five pensioners in the UK is living in poverty, that 1.3 million retirees are undernourished and that 25,000 pensioners die each year due to cold weather. As we know, the cost of energy has doubled, and older people are more susceptible to the cold, particularly if they are housebound or suffering from a disabling illness.

The Government failed to accept that inflation was going to rise at an alarming rate when benefits and the state pension were uprated for this April. They insisted on basing the uprating on September’s inflation figure of 3.1%, as usual. The Motion of the noble Lord, Lord Davies of Brixton, quotes the Bank of England’s prediction of 7.25%, but that is now being fast overtaken by events, and a figure of nearer 10% is now forecast during the year. It is unthinkable that poor pensioners, at the end of their lives, should have to experience such a sudden change in circumstances. Up to now, they have been protected by the triple lock but, because of what was seen as a one-off adjustment in incomes as a result of a recovery from the pandemic, the Government abandoned the triple lock. Had it still been in place, a rise of 8% would have equalled the predicted rate of inflation in April, when the uprating comes into effect.

Age UK has estimated that soaring energy prices will plunge 150,000 older households into fuel poverty this winter. It has said that the number of fuel poor older households could reach more than 1.1 million by the spring, unless the Government take urgent action.

We have one of the least generous state pensions of any country in Europe, and it is still below its 1979 value. The triple lock was introduced in 2010 in the light of a hugely devalued state pension. Some recovery has taken place since then, but the state pension still does not provide enough support to keep 2.1 million pensioners out of poverty.

For women pensioners, the situation continues to get worse, with one in five now in poverty. Analysis of government figures shows that, in 2012-13, 14% of female pensioners across the UK were living in relative poverty—that is, they were living in households with less than 60% of median average household income, after housing costs. By 2019-20, this had increased to about 20%. That increase comes despite increases in women’s state pension age, meaning that the number of female pensioners in the UK has fallen by about 800,000 since 2012-13.

On these Benches, we think it is essential to protect the poorest pensioners who depend on the state pension and that it is crucial to bring the value of the state pension to a realistic level in relation to earnings and living costs. It is vital to make sure that those already in poverty and dependent on benefits do not become poorer than they already are. As has been said, it is not enough to claim that an upward adjustment will be made next year, because the problem exists now.

My Lords, I rise to make a short point. Noble Lords have set out the human cost of the cut to social security earlier in the year, the failure to uprate it and to maintain the triple lock on pensions. As I understand it, the Treasury has saved £12 billion in so doing. The Minister will correct me if that figure is wrong but, whatever it is, billions have been saved.

I want to look at the other side of the equation. Those billions that have not gone to the poor people who have been described this evening is money that would otherwise have been spent, because poor people spend everything they receive: on food, on heating, on rent, and so forth. None of it is sorted away in the Cayman Islands; it is all spent money, and spent in the places where poor people live.

The impact of not uprating the benefits that we are talking about, and the pensions and so forth, will fall on diminishing demand in the most impoverished places in our country. The impact of that will be great: it will cause more shops to close, more pubs to close, more facilities to be ended. Councils will recover even less in rateable value and so forth. The impact is magnified by the failure to maintain the levels of income that my noble friends have described.

My Lords, for the second time today I am substituting for my noble friend Lady Sherlock, whose expertise in these matters is well known to the House. I will do my best to convey our position.

When the Social Security (Uprating of Benefits) Bill, now Act, was debated in this place last year by my noble friend Lady Sherlock, she highlighted how the suspension of the earnings element of the triple lock for the upcoming tax year would impact millions. This point has been made several times since. I share her concerns, those of my noble friend Lord Davies, and the concerns of others who have spoken in tonight’s debate.

Over the last decade, this Government have failed pensioners. The last Labour Government reduced pensioner poverty by over a million people. In the 12 years since, the number and rate of pensioners living in poverty has soared. In 2010, 14% of pensioners, totalling 1.6 million, lived in poverty. In the year before the pandemic, it was 18%. Some areas are far worse than others. Here in London, over one in four pensioners lives in poverty, totalling almost 300,000 people. Other regions, such as the East Midlands, the north-east, the north-west and the West Midlands, have poverty rates of over 19% among the over-65s. Therefore, of course, the number of pensioners in debt has risen too, by over half a million since 2010, so far.

Things have got harder since these pre-pandemic numbers, and pensions are one part of this. Following the uprating order being made last week, the increase to state pensions and benefits signed into law is 3.1% from next month. The basic pension rises from £141.85 a week for a single pension or £226.85 for a couple. The full rate of the new state pension will rise to £185.15 a week but, with earnings rising at 8.3%, the Government keeping their manifesto promise and maintaining the triple lock would have meant that the basic state pension would instead be rising to £149 for individuals, £238.30 for couples, and the full rate of the new state pension to £194.50. For an individual on the basic state pension, this is a difference of approximately £370, almost £600 for a couple, and close to £485 for those on the full rate of the new state pension—even higher than the difference with the Bank of England’s CPI uplift that my noble friend has highlighted already, which is expected to peak around 7.25% in April 2022 when the uprating takes effect.

What is undeniable is that the cost of living has increased by far more than 3.1%, and the Government breaking their promise has made it harder for pensioners. This hit for pensioners comes on top of several other factors, either caused or not addressed by this Government, that have made life harder for those struggling to get by.

On a related note, the Government continue to act too slowly to repay state pension underpayments to over 100,000 older women, leaving many thousands of them without the pension they deserve and barely enough to live on. At any time, pensioners who have worked hard their entire life should expect to be paid what they are owed at the right time but, with compounding difficulties, the impact is even more severe.

The main thing making things harder for pensioners at this time is the cost of living crisis and energy prices. Age UK warned that rising energy prices will lead to some of the poorest pensioners, for whom the cold could be particularly dangerous, rationing their heating. There was no mention today by the Chancellor of energy prices for heating oil, for example, in the spring Statement—but then it is an unregulated sector of the energy market. Cold weather payments and the warm home discount scheme fail to reach those who need them because they are not claiming pension credit.

As a result, three-quarters of older people in the UK—almost 10 million people—are worried about this cost of living crisis. Over half of those surveyed by Age UK said they will have to heat their home less, a quarter said they would have to choose between heating their home and the food they buy if their energy bills continue to go up, and two in five are having to cut back. What can they do other than go into debt or simply not pay their bill?

What is more, the £20 uplift to universal credit being stopped will continue to impact couples where only one is at state pension age. There are around 1.3 million working pensioners who will be asked to pay the poorly thought-out health and social care levy. Pension credit is another area of concern, with 850,000 eligible families missing out on almost £2,000 per year on average, and the number of eligible couples falling dramatically between 2019 and 2020 from the number the Government told us to expect.

While I have drifted away from the pensions uprating, my point is that the Government’s broken promise is not just a broken promise but one more burden on millions of pensioners at a time when it is simply the last thing that they need. The consequences will not be small; they will be pensioners unable to heat their homes, struggling to put food on the table, and managing increased debt in their efforts to prevent that. While this order has already passed, this does not have to be the fate for pensioners. I recognise the Minister’s sincerity, as noted by my noble friend Lady Lister, but I hope she will follow by setting out the steps the Government will be taking to avoid these outcomes.

My Lords, I would like to re-emphasise what happened today in the spring Statement. The Chancellor announced an additional £500 million for the household support fund from April 2022 to help households, including pensioners, with the cost of essentials such as food, clothing and utilities. This is in addition to the £500 million we have already provided since October, bringing the total funding to £1 billion. The Chancellor also announced a cut in fuel duty at 5p per litre. Customers will benefit from savings worth over £5 billion over the next year compared to uprating fuel duty in 2022-23. This will save average car drivers, many of whom are pensioners, around £100. I confirm that the Government will continue to keep the situation under review, recognising the high level of current uncertainty, including monitoring the ongoing impact of the Russia-Ukraine conflict on the economy, and will be ready to take further steps if needed to support households.

I thank all noble Lords for their contributions and the noble Lord, Lord Davies of Brixton, for moving the Motion. I also thank him for agreeing that this Motion could be debated after 9 March, when we debated the uprating order. A number of important points were raised, which I will now try to deal with. He made the point that averaging over time is no consolation. Uprating in April 2023 will take into account the rate of inflation this September, but we recognise the short-term pressures, which is why we have introduced a package worth more than £9 billion.

The noble Lord, Lord Davies, raised the issue of the cost of living and what the Government are doing to help pensioners. The Government spend more than £129 billion on pensioner benefits, which is 5.6% of GDP. In cash terms, from April, the full yearly amount of the basic state pension will be over £2,300 higher than in 2010. Over the last two years, the basic state and new state pension will have increased by more than 5.6%. Eligible pensioners will also receive support through free bus passes, free prescriptions, free TV licences, winter fuel payments, the warm home discount scheme, and cold weather payments.

The noble Lord asked about the opportunity to discuss the quinquennial review. I will write to the Government Actuary’s Department to see if it will do that with him. It is not something that is appropriate or sensible for me to do.

The noble Lord also raised the issue of the triple lock. We are not ending the triple lock. The suspension of the earnings link this year is a one-year response to exceptional circumstances and the Government remain committed to implementing the triple lock in the usual way for the remainder of the Parliament. I can confirm my Secretary of State’s statement on Monday evening that the triple lock will apply for the rest of this Parliament.

The noble Lord, Lord Davies, talked about using the National Insurance Fund to fund the triple-lock earnings increase, as did the noble Lord, Lord Sikka. The National Insurance Fund matches expected receipts to the predicted spending on contributory pensions and benefits over the medium term. There is no surplus in the fund that can simply be drawn on without consequences either for the ability to pay future liabilities or for the need for higher contributions in the future. It is therefore inaccurate to suggest that there is a surplus in the fund that can simply be drawn on. Increasing spending on today’s pensioners would pass the cost on to future generations of taxpayers.

The noble Lord, Lord Sikka, raised the point that the national insurance system is regressive. This is a matter for the Chancellor and the noble Lord has made his views on the subject very clear today.

The noble Lord also raised the issue of the cost of living, as did other noble Lords. Over the last two years we have delivered an increase of more than 5.6% to the basic and new state pension. As well as the winter fuel payment, pensioners receive a guarantee of pension credit and qualify automatically for the £140 rebate off their winter energy bill from suppliers participating in the warm home discount scheme. I will come to pension credit later in my remarks.

Older people can also benefit from the £9.1 billion that the Government will spend this year on extra measures to protect people from energy price spikes, such as the £200 energy rebate, the £150 council tax rebate and the £144 million discretionary fund available through local councils.

Pension credit came up so let me deal with that now. Pension credit would help people but, as noble Lords have said, people do not apply for it. We have to redouble our efforts to make sure that people apply for pension credit and receive it where it is due. We have undertaken a range of actions to raise awareness of pension credit, encourage pensioners to check their eligibility and make a claim. This includes the media day of action in June last year and we continue to use opportunities to promote pension credit, using proactive press activity and social media to reach potential recipients, their families and friends.

On Monday, the Minister for Pensions wrote a letter to editors of local newspapers across England, Scotland and Wales urging any readers who think they or a family member may be eligible to make a claim. There will be another day of action in June and the Pensions Minister will write to key stakeholders to seek their support for this. As well as these communication activities, we set up the pension credit working group with a range of stakeholders. It is tasked with identifying new practical initiatives that we can work on together to help pension credit take-up.

Over the last two months, more than 11 million pensioners in Great Britain will have received information about pension credit in the leaflet accompanying their annual uprating letter. It includes a prominent message that highlights that an award of pension credit not only tops up their state pension but can provide access to help with housing, heating and NHS costs and, for those over 75, a free TV licence.

The latest estimates, published on 24 February and covering the financial year 2019-20, show encouraging improvements in all the headline measures. Some 73% of those eligible for guaranteed credit, the main safety-net element, claimed it in 2019-20, up from 70% in 2018-19. Take-up of pension credit overall, which is the combined take-up rate of both the guaranteed credit and savings credit elements, was 66%, up from 63% in 2018-19. Some 77% of the total amount of pension credit that could have been claimed was claimed in 2019-20, up from 76% in 2018-19.

Separately, our internal management information suggests that the number of new claims for pension credit was 30% higher in 2021 than 2019. This is an encouraging development, although the impact of these claim volumes on successful awards and pension credit take-up will take longer to establish. We have more to do to encourage people to take up pension credit—

I raised a point about equality, although perhaps the Minister was coming to it; I am not sure. The Government have equalised the state pension age for men and women, but women’s state pension languishes behind men’s. Why is it not equalised? Can she undertake to give a date by which that will happen?

I cannot undertake to say if and when that will happen, but I will write to the noble Lord and place a copy in the Library with any updated information that I can glean.

The noble Lords, Lord Sikka and Lord Shipley, raised a point about pensioner poverty. Absolute pensioner poverty, both before and after housing costs, has fallen by 200,000 since 2009.

I do not have the relative rate in front of me because the Government are using the absolute rate, but I will find out and write to the noble Baroness. The Government prefer to look at absolute poverty over relative poverty because the latter can provide counterintuitive results. Relative poverty is likely to fall during recessions due to falling median incomes. Under this measure, poverty can decrease even if people are getting poorer. For example, some think tanks have projected that relative poverty fell sharply in 2021, during the pandemic.

The noble Lord, Lord Sikka, asked why we did not recycle savings in the pandemic. This Government locked down the economy to a large extent to protect our older people. That came at an enormous cost, and I therefore cannot agree with the noble Lord that the Government have not invested to protect their senior citizens.

The noble Lord, Lord Sikka, raised the issue of women and state pensions. Reforms to the state pension have put measures in place to improve state pension outcomes for most women. Over 3 million women stand to receive an average of £550 more by 2030 as a result of recent reforms.

The noble Lord, Lord Sikka, raised the point about linking the state pension to the national living wage. The national living wage and the state pension are two very different things; the national living wage is designed to protect low-income workers and provide an incentive to work by ensuring that all workers benefit from as generous a wage as possible, and the state pension is supported by further measures for older people, which I outlined earlier in my remarks.

The noble Lord, Lord Shipley, again raised the issue of fuel poverty. We know that low-income households in homes with a low energy-efficiency rating will find it harder to heat their homes, as energy costs rise. We are addressing the energy efficiency of homes to tackle fuel poverty in the long term. Right now, measures are in place to protect consumers and mitigate the effects of debt. We are providing support with energy bills this winter through the warm home discount, winter fuel payments and cold weather payments. The noble Lord asked how we were supporting pensioners with fuel poverty. As I have read out this evening, it is through the warm home discount scheme, winter fuel payments and cold weather payments.

The noble Baroness, Lady Lister, is passionate about support for parents, and has raised the point. Although we are talking about pensions in particular, I shall say, as I have said many times before, that the best way to help people out of poverty is to help them into work. Our changes to universal credit are designed to achieve that. There is also more support for childcare costs than in the tax credits system that the universal credit system replaced. Of course, there is no requirement to seek work for those with very young children.

I accept that not everybody out of work is required to seek work or able to seek work, whether because of their caring responsibilities, or whatever. I asked a very specific question. The evidence is that parents and others on benefits—and this is an uprating order about benefits as well as pensions—are already cutting back to the bone and do not know how they are going to cut back further. What are they supposed to do? That is the question that I asked, and which I asked the other day in Oral Questions of the noble Baroness, Lady Scott, and I still do not have an answer.

The noble Baroness is right to point out that there are those on low incomes who are unable to work, and I shall talk to my noble friend Lady Scott and write with actions that the Government are taking. I do not have that information to hand.

The noble Lord, Lord Hendy, and the noble Baroness, Lady Wilcox, raised the point that we are making savings at the expense of pensioners. We have increased most state pensions by 2.5% this year, when CPI in the relevant period was 0.5%. We made primary legislation to make sure that that happened, and we locked down the economy precisely to protect our older people. I cannot therefore recognise the points made by the noble Lord and the noble Baroness.

The noble Baroness rightly raised the issue of state pension underpayments. That should not happen, and we have apologised unreservedly, but I can confirm that the department has a dedicated team working on the correction activity. Sufficient additional staffing resources have been allocated to progress this activity, and further resources are being allocated through 2022-23. The Government are fully committed to ensuring that these historical errors made by successive Governments are addressed as quickly as possible to ensure that individuals receive the state pension that they are rightfully due in law.

The noble Baroness, Lady Wilcox, raised the issue of pensioner poverty for women. Reforms to the state pension have put measures in place to improve state pension outcomes for most women, and over 3 million women stand to receive an average of £550 per year more by 2030.

On the state pension underpayments, the noble Baroness, Lady Wilcox, asked, understandably, how we are prioritising cases. Resolving these errors is a priority for the department, as I have already said, and we are committed to doing so as quickly as possible. We have started reviewing cases when the individual is alive; in doing so, we are initially focusing available resources on older cases and those who we believe are most likely to be vulnerable.

I am conscious of the time. I have mentioned many things—but I hope that noble Lords will be reassured that the Government are fully aware of the concerns that people have over rising prices, and we have taken action, where possible, to help. I finish by again thanking the noble Lord, Lord Davies, for giving me the opportunity to set out the Government’s position.

My Lords, this has been a worthwhile debate. I am conscious of the time: I could spend a lot of time rehashing all the arguments, but I am sure we will return to them. I feel this is the first of what may well become an annual event, and I look forward to future occasions. I thank my noble friends Lord Sikka, Lady Lister, Lord Hendy and Lady Wilcox, and the noble Lord, Lord Shipley, for their contributions. If the House were in a position to take a vote, the Motion would certainly be carried, but it would be meaningless in current circumstances.

I conclude by saying that I am sure the Minister had to mention the Spring Statement, but the truth is that the Spring Statement did nothing for the poorest pensioners. The whole debate has been about the poorest pensioners; there was nothing material in the Spring Statement for them. In fact, it made them worse off, by giving a further little upward shift to inflation. I thank the Minister very much for her reply, and I am sure we will continue the debate. I beg leave to withdraw the Motion.

Motion withdrawn.