HC Deb 27 November 1989 vol 162 cc422-4
3. Mr. Foulkes

To ask the Secretary of State for Social Security whether he will review his decision not to uprate pensions in line with earnings.

The Secretary of State for Social Security (Mr. Tony Newton)

I have no plans to change the basis on which pensions are uprated.

Mr. Foulkes

Will the Secretary of State confirm that the result of the Government breaking Labour's link between pensions and earnings is that the single pensioner is being robbed of £12.65 per week and a married couple of £20 per week? Instead of allowing pensioners to share in the nation's increasing wealth, and at a time when the national insurance fund is in surplus to the tune of £10 billion, the Government are cheating pensioners to pay for their tax handouts to the wealthy. Where is the fairness in that? Will the Government think again?

Mr. Newton

I can confirm that pensioners' incomes as a whole have improved much faster under the present Government than they did under the Labour Government. That is because, above all, of the dramatic drop in inflation —which did so much to erode pensioners' other incomes when Labour was in office. Under this Government, pensioners' total net incomes have on average risen by one quarter, which is massively faster than under the previous Labour Government.

Mr. David Nicholson

Did not the previous Labour Government fail to honour their pledge on pensions, and did they not have a dismal record of increasing real earnings—by contrast with the record of the present Government? Given that 80 per cent. of pensioners have incomes from private sources—that figure is improving all the time—is it not better to concentrate help on poorer pensioners, as the Government are doing, than go for an across-the-board increase?

Mr. Newton

Four out of five of the recently retired have an income from savings, and about three quarters of them enjoy substantial occupational pensions. In those circumstances, I agree with my hon. Friend that the right course for the Government is to concentrate additional state help on those who have not had the opportunity to build up savings and occupational pensions. That is what we did with the major increases in income support for many older and disabled pensioners last month.

Mr. Orme

Is the Minister aware that under the Labour Government, pensioners' incomes increased in real terms by more than 20 per cent. above the rate of inflation? If the Minister is not prepared to do anything about uprating, will he do something about the Christmas bonus and see to it that pensioners receive a real return in that way?

Mr. Newton

That is a pretty major own goal from the Minister for Social Security in the Labour Government who failed to pay the Christmas bonus for two years.

Mr. Knapman

If pensions are lower than they might reasonably be, is that not because people paid for their pensions with real money in the 1950s and 1960s and had it confiscated by a Labour Government in the 1970s? Will my right hon. Friend see to it that that never happens again?

Mr. Newton

I shall certainly do my best, and we have succeeded so far. Under the present Government, the value of pensioners' incomes from savings has risen by 64p in the £1. Under the Labour Government it fell by 16p in the £1.

Ms. Short

Have the Minister and his party lost contact completely with what is happening in Britain? Does not the Secretary of State know that millions of pensioners find it very difficult to manage every week—especially at this time of year, when high heating bills must be met? The reason for their difficulties is that the Government deliberately broke the link with earnings and deprived pensioners of a massive sum of money—£20 per week for couples and £12.65 for single people—to give tax cuts to the well-off. The British people do not support that action and are increasingly worried that the country is becoming too divided. We do not want pensioners to be left out of improvements in the nation's wealth. Will the Secretary of State reconsider the matter and re-establish the link between pensions and increases in earnings or prices— whichever is higher?

Mr. Newton

I share the hon. Lady's entirely proper wish to do more for pensioners who have not benefited from occupational pensions and the other items that I mentioned. I hope that I carry her with me when I say that it was exactly that thought which led only last month to increases of up to £3.50 a week for about 2.5 million single pensioners and pensioner couples. Those are the people whom we need to do more to help, and the people whom we have done more to help.

Mr. Foulkes

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that answer, I should like —in my capacity as joint chairman of the all-party pensioners group—to raise the matter on the Adjournment.

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