Pensions (Hansard, 26 April 1993)

2. Mr. John D. Taylor
To ask the Secretary of State for Social Security at what age retirement pensions are paid to men and women in each of the 12 Community countries.

§ The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe)
State retirement pension ages are as follows: in Denmark, from age 67 for men and women; in Spain, the Netherlands, Ireland and Luxembourg, from 65 for men and women, as it is also to be in Germany; in Portugal, from age 65 for men and 62 for women; and in Greece, from age 65 for men and 60 for women. In France and Belgium, the retirement pension may be paid from age 60 for men and women. In Italy, the ages are to be increased by five years to 65 for men and 60 for women. In the United Kingdom, the state retirement pension is paid from age 65 for men and 60 for women.

Mr. Taylor
Since the doctrine of infallibility has recently been accepted by some, will the Minister assure the House that it does not extend to her Department and that there is an open mind on the issue of pensions? Following the high-level review that took place at the weekend, and in view of her reply confirming that eight of the 12 Community countries now provide pensions at the same age for men and women, when will that be the basis on which pensions are paid to men and women in the United Kingdom?

§ Mr. Skinner
Where's your hat?

§ Miss Widdecombe
The hon. Gentleman, from the penitential and sedentary position of his fourth term in opposition, calls out a rather irrelevant remark.
Decisions in respect of state pension age will be announced in due course. No decision has so far been reached, and we have at present no plans whatever to change the basis on which the pension is paid?

§ Mrs. Angela Knight
But does my hon. Friend agree that as the number of people drawing pensions is likely to increase substantially very soon, while the number of those of working age who support them is likely to decrease, it makes sense to look at the possibility of equalising the pension age at 65? Does she further agree that many women would prefer to work until age 65, as I propose to do, rather than putting increasing financial burdens on their children, as would happen if we kept the retirement age for women at 60?

§ Miss Widdecombe
My hon. Friend is right about demographic trends. At the moment, there are some 3.4 people of working age for every one pensioner in Britain. Assuming that no changes were made, that ratio would 711 have decreased to 2.4 per pensioner by the year 2030. We shall obviously take that into account, as we shall take into account trends elsewhere in Europe and the world and potential costs or savings. Of course, women have different preferences and different plans for their retirement, and some would be happy to work for longer. All that I can say is that, as yet, no decision has been taken on the subject.

§ Mr. Winnick
Is the Minister aware of the growing concern—which has been increased by what happened at the weekend seminar—that the state retirement pension is no longer safe with the Government? Is it not the case that, to a large extent, what was decided at the seminar was war on the existing welfare state?

§ Miss Widdecombe
If there is one thing that I find disturbing about the Labour party, it is its willingness to play with the minds and the fears of the vulnerable and elderly. We made a clear statement in our manifesto, and we have made clear statements at the Dispatch Box time after time, that we have no plans—absolutely no plans —to abolish, to freeze or to means-test the pension. We have stood by that. The only plans to means-test the pension are those coming from the Opposition Benches. Not only do Opposition Members want to means-test the pension: they want to do it at the same time as discouraging the only alternative, which is private provision. The hon. Gentleman also has a considerable amount of penance to do for scaring the elderly totally unnecessarily.

§ Sir Donald Thompson
Will my hon. Friend consider reducing the pension age for men by one year every two or three years over the next 10 or 15 years and at the same time give men a chance to bolster the private part of their pension?

§ Miss Widdecombe
All options will be taken into account in considering what to do with state pensions. The Government have continually encouraged the provision of pension other than the state pension. As a result of that, 70 per cent. of people now retiring have an addition to their state pension—either from an occupational pension or from savings. That is a proud record to which the Opposition could never aspire and on which, what is more, they pour scorn: they want to keep people dependent on the state and do not want to encourage them to try for security in their retirement.

§ 3. Mr. Corbyn
To ask the Secretary of State for Social Security what plans he has to link the state retirement pension to average earnings; and if he will make a statement.

§ The Secretary of State for Social Security (Mr. Peter Lilley)
We have no plans to link the basic pension to average earnings.

§ Mr. Corbyn
Is the Secretary of State aware that in 1980 the Government broke the link between average earnings and the state old-age pension and established instead a link with a rejigged retail prices index, and that that has cost every pensioner more than £17 a week and has taken from pensioners more than £25 billion in the past 13 years? Will the right hon. Gentleman now come clean and stop ripping off pensioners? Can we now return to the system whereby the link was either with the RPI or with average earnings—whichever represented the larger increase—and will the right hon. Gentleman ensure that pensioners in our 712 society, who pay for their old-age pension through taxation and national insurance, can be assured of a decent income in retirement and not have to depend on income support or be forced to take out private pension schemes, some of which are very unreliable indeed?

§ Mr. Lilley
The hon. Gentleman should address his questions to the Opposition Front Bench and not to me. In the first place, the Labour Government broke the link with earnings when they were in power. More recently, the Opposition Front-Bench spokesman on the subject said that even to hold the link between pensions and earnings at its present level would be very costly and would do nothing to tackle the problem of poverty among the elderly. For once, he is quite right: it would cost £81½ billion to do what the hon. Member for Islington, North (Mr. Corbyn) suggests and that would cost every working person in this country nearly £6 per week in increased contributions.

§ Mr. Congdon
Does my right hon. Friend agree that since many pensioners now retire with generous occupational pensions, it is better to target resources on those in greatest need than to spread them across the board?

§ Mr. Lilley
That is absolutely right and is, indeed, what we have been doing. My hon. Friend will know that over the past year we have been able to confirm an extra £500 million to poorer pensioners, largely through the increase in the pensioners' premium last October by £2 per week for a single person and £3 for a couple, over and above the increase in inflation. On top of that, pensioners have seen their purchasing power increase this month by an equivalent of a further £2.90 a week on top of inflation because of the extra £750 million that we have pumped into income-related benefits by not requiring anyone on those benefits to make the 20 per cent. contribution to local government taxation.

§ Dr. Reid
Will the Minister confirm that the figure of £8½ billion that he mentioned as the figure necessary to restore the link between pensions and earnings or prices —whichever is the higher—for every pensioner, for 365 days a year, is slightly less than what the Government spent on one day, on black Wednesday, as a result of their own economic folly? Is the Minister not ashamed of the fact that the most vulnerable section of the community —the people who created the wealth that he and his colleagues on the Conservative Benches are now ripping off—have been deprived of £17 a week by the Government? Will he now answer the question put to him by my hon. Friend the Member for Islington, North (Mr. Corbyn)?

§ Mr. Lilley
The figure that I quoted related directly to the point made by the hon. Member for Islington, North (Mr. Corbyn) and would be the cost of the proposal that he was advocating. It has nothing to do with the cost in relation to 16 September which, of course, would have been infinitely greater had we followed the advice of the Labour party and remained in the exchange rate mechanism.