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No increase in 75p pension rise

Mr Darling was addressing MPs immediately after Chancellor Gordon Brown's pre-Budget report.

Mr Brown announced that the £100 winter fuel allowance would be paid to pensioners every year from now on and that over-75s would get television licences free.

But Mr Darling opened his statement by saying that most benefits, including pensions, would rise next year by 1.1%, in line with the Retail Price Index.

Under that figure, the basic state pension will rise from £66.75 to £67.50 for a single person - a rise of just 75 pence.

Mr Darling pointed out that the government had introduced a minimum income guarantee, which would be increased in line with earnings every year for the remainder of this Parliament.

That guarantee with be worth £78.45 for single pensioners and £121.95 for couples in the coming financial year.

'Better quality of life'

He said the government had always known the RPI would be low but it was "building a better quality of life for all of our pensioners".

Mr Darling told MPs that the poorest pensioners would be £500 a year better off since Labour came to power.

Free television licences for over 75-year-olds would benefit three million households, MPs heard.

Mr Darling said: "We're helping the poorest through the minimum income guarantee and oldest through the free television licence.

"And it is these pensioners who have the most to gain through the winter fuel payments."

But Conservative social security spokesman David Willetts dismissed the secretary of state's announcement, saying, "No wonder the television licence was the centrepiece of his statement as all he is showing is repeats."

He said the measures only demonstrated a "complete absence of a strategy for dealing with pensioner poverty".

Mr Willetts asked Mr Darling whether he felt guilty when he heard the chancellor talking about tax cuts for entrepreneurs when the social security secretary continued with his bill to introduce means testing.

Pension increase 'altogether too low'

Jack Jones, head of the National Pensioners' Convention, described the 75 pence increase to the pension as "altogether too low - it's derisory".

He told the BBC that while over-75s would undoubtedly welcome the chancellor's announcement of free TV licences, "the big problem is that the basic retirement pension is still very low indeed".

"Something must be done about that. There is a surplus in the National Insurance pension fund of £5.9bn and pensioners expect some concession on the basic retirement pension."

Mr Jones said restoring the link between the level of the state pension and average earnings was "surely right".

Applying the RPI to the pension meant a very low increase which failed to properly reflect increased prices in shops. "I don't know why ministers can't understand that."

Pensioner's protest

Prior to Mr Darling's statement to the House, Ann Crabtree, 69, chained herself to the railings outside the Labour Party headquarters at Millbank Tower in central London in protest against the 73 pence rise.

She said she was "outraged" over the amount pensioners had been offered.

Miss Crabtree, who is disabled and awaiting a knee operation, said "I am here to make sure that everyone in every city says to the Labour government that it's an insult to offer us 73p."

After Mr Darling's statement the Commons went on to debate the amendments made by peers to his controversial Welfare Reform and Pensions Bill, which includes cuts to disability benefits.

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