HC Deb 15 February 1993 vol 219 cc4-6
2. Mr. Simon Coombs

To ask the Secretary of State for Social Security what was the average value of an occupational pension (a) in 1979 and (b) in the latest year for which figures are available.

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

I am sure that my hon. Friend will be pleased to hear that between 1979 and 1988, the latest year for which figures are available, it is estimated that the average value of occupational pensions in payment rose from £34 per week to £51.80 per week at 1988 prices—this represents an increase of about 52 per cent.

Mr. Coombs

Will my hon. Friend confirm that about 70 per cent. of recently retired people obtain occupational pensions, and that that trend has been rising steadily throughout the past decade? Can she confirm that it remains Government policy to encourage as many people as possible to follow that means of provision?

Miss Widdecombe

Yes, I have pleasure in confirming that my hon. Friend's figures are correct. They exclude the 5 million people who now provide for themselves through personal pensions, which is another sign of the Government's commitment to a proper combination of private and public provision for retirement income.

Mr. Norman Hogg

Is the Minister aware that retired local government officers in Scotland on average receive only £2,014 per annum from occupational pensions? Does she accept that that is below the figure bandied about as the sort of pension paid to retired local government officers? Does that not show that, before the Government start to tamper with the state pension, they should have regard to the fact that many occupational pensions do not pay that much money to their pensioners?

Miss Widdecombe

I was pointing out that occupational pensions pay an increasing amount to their pensioners. The figures are somewhat depressed if one includes in them those who retired when occupational pensions were in their infancy. The hon. Gentleman is perfectly capable of understanding what an average is, however, and that if there is an average pension, some people will receive far more than that and some will get somewhat less.

Mrs. Chaplin

Will my hon. Friend confirm that the occupational pensions industry is increasingly equalising the pension age at 65 and that it would be helpful from its point of view if we equalised the state retirement age at 65 as well? I declare an interest in that I fully intend to work until the age of 65 at least.

Miss Widdecombe

I am delighted to hear that my hon. Friend intends to work until she is 65 and I am sure that she will represent her constituents well throughout that time. The Government are entirely committed to equalising the state pension age and our equalisation proposals were set out in a consultation document. Those four options are still under consideration.

3. Mr. Burden

To ask the Secretary of State for Social Security what is his policy on maintaining the value of the basic retirement pension in real terms.

The Secretary of State for Social Security (Mr. Peter Lilley)

Since 1979, we have more than fulfilled our pledge to maintain the real value of the basic state pension.

Mr. Burden

The Secretary of State will recall that since the Government scrapped the link with earnings, single pensioners and married couples are, respectively, about £17–65 and £28 per week worse off. My city of Birmingham has more than 103,000 pensioners living in poverty who are forced to choose between having a decent diet and meeting the cost of rising fuel bills. Some 39 per cent. of them have no central heating and 45 per cent. have no loft insulation. Can the Secretary of State or the Government really be proud of their record of cutting the value of the state pension?

Mr. Lilley

Because we have focused additional resources on the most needy, and because we have encouraged people to make increased provision over and above their basic state pension, the average income of pensioners has risen more every year under this Government than under the five years of the previous Labour Government. So the answer is yes, we are proud of our record and the hon. Gentleman should be ashamed of his.

Mr. Dunn

Will my right hon. Friend condemn a policy that seeks to means-test the state pension as well as to discourage private provision? Is he aware that such a policy is now an official policy of the Labour party?

Mr. Lilley

My hon. Friend is absolutely right—it is a most extraordinary combination for any political party to adopt. The right hon. and learned Member for Monklands, East (Mr. Smith) has specifically required his social justice commission to consider means-testing every universal benefit, including the basic pension. The Opposition are bound to follow such a policy because of their commitment to uprate that pension in line with earnings rather than prices. If they are to get extra resources for the most needy, they will have to means-test that pension and they know it.

Mr. Kirkwood

Notwithstanding the Secretary of State's assurances about the Government's intention regarding price protection for the basic state pension, does he acknowledge that the value of that pension depends to a large extent on fuel bills, food bills and public utility costs? If there is any truth in the rumour that the Treasury is considering imposing value added tax on those items, will the right hon. Gentleman's Department ensure that those costs are made up through the social security system?

Mr. Lilley

As the hon. Gentleman knows, we do not answer hypothetical questions, but he will be interested in the fact that if, since 1979, pensions had been raised in line with the pensioners index—the index which looks specifically at the goods and services that pensioners buy —rather than with the retail prices index, as we have done, pensioners would be receiving £6–65 per week less.