HC Deb 05 February 1990 vol 166 cc626-7
2. Mr. Shersby

To ask the Secretary of State for Social Security by how much pensioners' incomes from savings changed over the period (a)1974 to 1979 and (b) 1979 to date.

18. Mr. Andrew Mitchell

To ask the Secretary of State for Social Security by how much pensioners' incomes from savings changed over the period (a) 1974 to 1979 and (b) 1979 to date.

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

Between 1974 and 1979, pensioners' income from savings fell by 16 per cent. in real terms. Between 1979 and 1986, the latest year for which figures are available, it rose by 64 per cent. in real terms.

Mr. Shersby

Does my right hon. Friend agree that those figures demonstrate a massive increase in pensioners' income during the decade that the Conservatives have been in office, compared with when Labour was in office? Does he further agree that the unique benefit that accrues to British women, whereby they get a pension on their husband's contribution, and other related benefits, means that the British pension is one of the best in the European Community?

Mr. Newton

I endorse my hon. Friend's comments on both counts. The improvement in the income that pensioners derive from their savings has been an important ingredient in the overall increase in the total average net income of pensioners, to which my hon. Friend the Under-Secretary of State referred in her earlier reply. That has been accompanied by our measures to help those who do not have the advantage of income from savings—[Interruption.] As to European comparisons, I see that hon. Members on the Opposition Front Bench are in characteristically simplistic mood. As emerged from my exchanges with the hon. Member for Oldham, West (Mr. Meacher) in the debate last week, many European countries do not pay married women a pension on their husband's contribution. It is a major advantage of the British system that it does.

Mr. Andrew Mitchell

Although most pensioners have done quite well under the present Government, and certainly a great deal better than they did under the previous Labour Government, is it not the case that one group has done much less well? I refer to those who must exist only on a state pension. Were not the Government absolutely right last year to introduce their package for poorer pensioners, which was specifically targeted at that group?

Mr. Newton

Yes. Our policy specifically acknowledges that not all pensioners have the advantage of increased occupational pensions and of the improved income from savings to which I referred. We deliberately sought to direct extra help to those most in need.

Mr. Frank Field

Although the Secretary of State clearly has no difficulty in confusing some of his supporters about what has really happened to pensioners' living standards, does not the right hon. Gentleman agree that most pensioners know that under the previous Labour Government, those among them dependent on state benefits enjoyed a real increase in their pension of 20 per cent., compared with only 2 per cent. under the present Government?

Mr. Newton

In recent weeks, the hon. Gentleman and I have had several exchanges about that. As I have adverted to on more than one occasion, the hon. Gentleman himself recently wrote an interesting press article in which he acknowledged precisely the type of points that I made in my previous answer, and suggested that his own party's policies did not focus sufficiently on the needs of pensioners whose only income was a state pension.

Mr. Meacher

The right hon. Gentleman constantly makes great play of the increase in pensioners' real overall incomes over the past decade. Will he confirm that the poorest one fifth of pensioners have received no real increase over the past decade? As to the remainder, will he further confirm that the two biggest factors in increasing their incomes have been high interest rates—which increase the return on investments, but at the expense of mortgage misery for millions—and, above all, the maturing of the state earnings-related pension scheme, which was a Labour Government scheme that the right hon. Gentleman's predecessor tried to destroy?

Mr. Newton

I cannot confirm the latter. The two most striking features have been the growth in income from occupational pensions and the growth in savings income, which compares with a decline in savings income under the previous Labour Government. As to the hon. Gentleman's first point, it has been emphasised frequently in recent debates that far fewer pensioners are now in the bottom one fifth of income distribution. That figure has fallen from 38 per cent. in 1979 to 24 per cent. now.