Backbench revolt over pensions rise

The Prime Minister faced the threat of a backbench revolt last night over the Chancellor's "meagre" 75p increase in the basic state pension.

Warning that it was going down badly in Labour's heartlands, Labour MPs lined up to attack as inadequate the rise in line with the inflation rate.

There could be an attempt to restore the link between pensions and pay when the Budget package goes through the Commons in the Finance Bill.

The attack came at an embarrassing time for the Secretary of State for Social Security, Alistair Darling, as he launched a campaign to urge poorer pensioners to take up the minimum income guarantee. The Government is sending out letters to two million pensioners believed to be eligible for the supplement worth £11 a week.

But Labour MPs said they were getting the message from their constituents that pensioners wanted a bigger increase in the state pension, rather than extra allowances.

Lynne Jones, the Labour MP for Birmingham Selly Oak, led demands at a closed meeting for Labour MPs for the state pension to be brought to the level of the minimum income guarantee for all pensioners. Jeff Rooker, a Social Security minister, dismissed her demand, warning it could cost £4bn.

The Chancellor has made clear he intends to keep to his policy of directing extra funds at the poorest pensioners.