Pensioners (Hansard, 2 April 1990)

§ 4. Mr. Lester
To ask the Secretary of State for Social Security what are the latest available figures on the proportion of pensioners whose incomes fall in the lowest fifth of national income distribution.

§ The Parliamentary Under-Secretary of State for Social Security (Mrs. Gillian Shephard)
The latest available 879 figures show that in 1987 only 24 per cent. of pensioners had incomes in the lowest fifth of national income distribution, whereas in 1979, 38 per cent. of pensioners fell into the lowest fifth.

§ Mr. Lester
I thank my hon. Friend for those figures, which are the result of a policy consistently balanced between state provision and savings and between personal and superannuated pensions. Does she share my view about the remaining 24 per cent.—many of them in agricultural constituencies such as hers—who may have had no opportunity to take out superannuated pensions or make personal provision and who remain in a relatively difficult position? Will she undertake to keep her eye on the programme that we started for the over-75s which recognised their position?

§ Mrs. Shephard
My hon. Friend is right to draw attention to the balanced nature of the Government's policies towards pensioners. He is also right to draw attention to the increase in pensioners' incomes from savings and occupational pensions. He mentioned the October package for older pensioners which we introduced to give them additional help through extra premiums. I remind him of the arrangements for disabled pensioners and for those over 75 and over 80. Finally, I remind him that between 1979 and 1989 expenditure on benefits for the elderly increased by 22 per cent. in real terms.

§ Mr. Skinner
Is the Minister aware that the best way for the Government to help the 24 per cent. of people who are right at the bottom would be to take away the £26.2 billion that went to the 1 per cent. who are the wealthiest in the population in tax cuts over the past 10 years and hand that to the 24 per cent? At the same time, the Government should hand back the £12 a week that the 24 per cent. lost as a result of the Prime Minister and her Ministers cutting the link between earnings and prices for pensioners.

§ Mrs. Shephard
The Government have honoured their manifesto pledge to keep pensions in line with the rise in prices. I repeat that the most important point is the rise in pensioners' total incomes. I remind the hon. Gentleman that between 1979 and 1987 pensioners in the lowest quintile experienced a 19 per cent. increase in real terms in their average total net incomes.

§ Mr. David Martin
While my hon. Friend is on the subject of income from savings, will she raise with the Treasury the treatment of interest under the £16,000 savings rule, the majority of which, as I understand it, is treated as having a 20 per cent. return? If that cannot be changed, will my hon. Friend ask the Treasury where one can find investment yielding 20 per cent. net, because I would like to know myself?

§ Mrs. Shephard
My hon. Friend draws attention to the greatly welcomed increase in capital limits announced by my right hon. Friend the Chancellor of the Exchequer in his budget. I remind my hon. Friend that 150,000 pensioners stand to gain as a result of the change in the rules on the capital limits. That was no mean achievement for my right hon. Friend the Chancellor of the Exchequer.
My hon. Friend appears to be confusing the capital limits and the 15p taper. For each £1 of tariff income, 15p is removed from the allowance made to the beneficiary. I 880 do not think that my hon. Friend has fully understood the announcement made by my right hon. Friend the Chancellor of the Exchequer.