Pensioners (Hansard, 4 March 1991)

§ 5. Mr. Carrington
To ask the Secretary of State for Social Security what proportion of the average pensioner's income comes from occupational pensions, savings and earnings.

§ Mr. Newton
In 1987, 21 per cent. of the average pensioner's gross income was derived from occupational pensions, 19 per cent. from savings and investment and 7 per cent. from earnings.

§ Mr. Carrington
I thank my right hon. Friend for that answer. Does he agree that it is important that everybody in employment should be encouraged to make provision for their retirement? Is not the large increase in the number of people taking out personal pensions schemes to be greatly welcomed?

§ Mr. Newton
In a word, yes.

§ Dr. Reid
Should not every pensioner in Britain have two pensions: the first being the pension which the Government already give them and the second being the supplementary pension which they would receive, had not the Government, as one of their first and most scandalous acts, cut the link between pensions and earnings?
Although the Secretary of State boasted that fewer than 50 per cent. of British pensioners own their homes, will he confirm that the amount that has been lost by a pensioner couple because of cutting that link, £20 a week, is equivalent to a mortgage, even at the crucifyingly high rates of interest under this Government, of £12,500 a year? Why does not he do the decent thing, supplement the pension with the money that he has already taken away and allow many more pensioners to own their home?

§ Mr. Newton
The number of pensioners in Britain owning their own homes is likely to rise steadily because of the general rise in home ownership to which this Government's policies have significantly contributed, often against vigorous opposition from Opposition Members in respect of one of the main engines of that growth: the sale of council houses.
5 A growing number of pensioners have additional pensions, either from the additional SERPS pension or from occupational pensions or from the growth, to which my hon. Friend the Member for Fulham (Mr. Carrington) referred, in personal pensions. That has happened a great deal more and a great deal faster than it would have had the policies of the Opposition remained in place.

§ Mrs. Roe
Does my right hon. Friend agree that one of the most positive contributions that the Government can make to raising pensioners' living standards is to take whatever measures are necessary to curb inflation?

§ Mr. Newton
Yes, I do. One of the striking aspects of pensioners' incomes is the extent to which they have gained from increases in savings income during the past 10 years—whereas the average value of pensioners' savings income appears to have fallen under the Labour Government.

§ Mr. Meacher
Will the Minister confirm that the figures that he has given today and on other occasions detailing the rise in pensioner incomes are completely out of date because they go up only to 1987, since when the average pensioner has become poorer as a result of high inflation, high interest rates, falling dividends, falling asset prices and rising poll tax? Will he have the honesty to admit that the Government failed the pensioner 10 years ago when they broke the pension link with earnings and that the market on which the Government have since relied to increase pensioners' incomes has also failed the pensioner? Is not he ashamed that, as a result, the British pension is now much the lowest in Europe?

§ Mr. Newton
Let me simply give the hon. Gentleman the figures in real terms—at constant prices—for pensioners' average income from savings in 1974, 1979 and 1987, the latest year for which, as the hon. Gentleman said, figures are available. In 1974 the figure was £10.70 a week; after five years of Labour Government it had fallen to £9.10 a week; after eight years of Conservative Government it had more than doubled to £20.10 a week. If the hon. Gentleman can take any satisfaction from the record of the Government in which he was a Parliamentary Under-Secretary of State in the DHSS—a Government who reduced pensioners' incomes from savings—I shall be somewhat surprised.

§ 6. Sir Anthony Durant
To ask the Secretary of State for Social Security what proportion of pensioners have some form of second income to add to the basic state pension.

§ Miss Widdecombe
My hon. Friend will be interested to hear that, in 1987, 84 per cent. of pensioners received some form of income in addition to the retirement pension and other state benefits.

§ Sir Anthony Durant
The whole House will agree that those figures are very encouraging. Do not they prove that we should concentrate our efforts now on pensioners in the greatest need?

§ Miss Widdecombe
My hon. Friend is absolutely right. That is why we have already directed £200 million of extra support towards poorer pensioners and why we intend to devote a further £80 million, as already announced.

§ Mr. O'Hara
Is the Minister aware of the situation of widows on pensions? A constituent of mine was recently 6 widowed and was therefore—rightly—in receipt of a widow's pension based on her husband's contributions. She inherited no occupational pension from him. She has worked and paid social security contributions all her life. In her late 50s she became unemployed and because of overlapping benefits regulations she is not entitled to any recompense for her lifetime's contributions. Would not such a widow feel cheated by a Government who can treat her in that way?

§ Miss Widdecombe
The hon. Gentleman will be aware that through the safety net of income support and other benefits we try to assist those who, through no fault of their own, may not have successfully made the provision that they originally intended. The benefits are regularly uprated and reviewed and we shall continue to support such people in that way.

§ Dame Elaine Kellett-Bowman
Will my hon. Friend confirm that from 1979 to 1987 occupational pensions rose by 77 per cent. and that they continue to rise?

§ Miss Widdecombe
I can confirm those figures. We should also note that because of the abolition of the earnings rule, earnings are included in that additional income.

§ Mr. Allen
Will the Minister endorse the thanks of the Peterborough pension group that I met this morning to Peterborough city council for salvaging the concessionary fare scheme for elderly people which had been cut by the Conservative county council? Is not that another example of local government, of whatever political party, stepping in to salvage the Government's reputation over their treatment of the elderly? Does she agree with Julie Owens, the next Labour Member of Parliament for Peterborough, that the Government have taken from the married pensioner couple £1,000 that they would have had if the pension had been linked to earnings?

§ Miss Widdecombe
I find it increasingly distasteful that a party that completely decimated pensioners' savings by the inflation of the 1970s should have the gall to ask us to revert to the very system which produced no more than a 3 per cent. rise whereas we have produced a 31 per cent rise in pensioners' incomes. When the hon. Gentleman is talking to pensioners and others, perhaps he would tell them the absolute truth about how the Opposition's promises will be paid for.