HC Deb 22 July 1991 vol 195 cc736-7
2. Mr. Atkinson

to ask the Secretary of State for Social Security if he will make a statement about the Christmas bonus for pensioners.

The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe)

The Christmas bonus has been paid by this Government every year since we took office in 1979. My hon. Friend will be pleased to know that it is paid to 12 million people each Christmas.

Mr. Atkinson

Will my hon. Friend confirm that the Christmas bonus will once again be paid this Christmas to every pensioner, by contrast with the performance of the previous Labour Government, who refused to pay it for two years running? Does she accept that keeping the payment level for some years raises the question of its viability due to increasing administrative costs? Will she review that level with a view to increasing it in due course?

Miss Widdecombe

I have pleasure in confirming that the bonus will be paid this year as in past years. It was this Government who made it statutory, rather than concessionary, as one of their first acts in 1979. That was a worthy successor to their first act, which was to introduce the bonus in the first place in 1972.

In considering any increase we need to remember that merely increasing the bonus by £1 would cost £12 million and that to double it would cost £120 million. Bearing in mind the fact that the Christmas bonus goes to everyone who is entitled to it and is not a targeted benefit, we have to ask whether that is the wisest use of resources. At the moment we are targeting resources—for instance, in the recent packages worth about £280 million for poorer pensioners—and that seems a better use of this sort of money.

Mr. Flynn

Does the Minister recall that a few moments ago the Under-Secretary of State referred to a benefit withering on the vine? If the Christmas bonus were paid allowing for inflation, it would now be worth £59.17.

Miss Widdecombe

And it would cost us £700 million to pay it at that level. We are trying to use money to target poorer pensioners. It ill becomes the Opposition to criticise us when for two years they did not pay the bonus at all. It is better to pay it regularly and by statute than to go for ambitious uprating programmes and then fail to deliver for two years running.