Pensions and Benefits (Choice)

HC Deb 15 February 1993 vol 219 cc6-7

5. Mrs. Roe

To ask the Secretary of State for Social Security what proposals he has for increasing the control and choice individuals have over their social security benefits and pensions.

Mr. Lilley

As my hon. Friend knows, the Government are committed to enabling individuals to take greater control of all areas of their lives. Our policy on earnings-related pension provision is an excellent example of that commitment. Since 1988, 5 million people have taken out personal pensions, in addition to the 11 million people who are members of occupational pension schemes.

Mrs. Roe

Will my right hon. Friend confirm that, since 1979, Conservative Governments have maintained their manifesto pledges to increase the basic pension in line with prices? Does he agree that that clearly demonstrates that Conservatives take their manifesto pledges seriously? Will he therefore take this opportunity to condemn the scaremongering carried out by Labour Members of Parliament who frequently suggest that we are about to break our pledges?

Mr. Lilley

My hon. Friend is absolutely right. The Conservative party has a reputation second to none for keeping its pledges. The uprating statement in the autumn demonstrated that we keep our pledges to pensioners and families, despite the scaremongering by Labour Members which preceded the outcome of that round. The Labour party has a lot to be ashamed of, as it broke its pledges to pensioners, cut the real value of pensions by 60 per cent., cut the Christmas bonus and robbed pensioners through inflation, which wiped out their savings.

Mr. Rooney

Does the Secretary of State realise that social security benefits constitute a two-way package whereby people contribute to the national insurance fund and then, in return, when the time comes, make their claims? In the 13 years of the Conservative Government there has been a 50 per cent. increase in the rate of contribution, but a withdrawal of the earnings-related element, sickness, unemployment and invalidity benefits, widows pensions and a range of other matters. How does the Secretary of State answer that charge?

Mr. Lilley

I do recognise that. As I said to the Select Committee on Social Security, I think that there is more strength in the contributory principle than many intellectuals believe. However, the hon. Gentleman had better have an argument with one such intellectual, the right hon. and learned Member for Monklands, East (Mr. Smith) who, in his leadership statement, questioned whether the Labour party should maintain the distinction between national insurance benefits, which are available only on the contribution test, and means-tested benefits. I said that I recognised that issue raised by the hon. Gentleman, but does the Labour party? And will the Labour party keep its long-standing commitment to that principle? It seems not.

Mr. Brazier

Does my right hon. Friend agree that one of the best ways of encouraging alternative provision, especially occupational pension provision, is the control of inflation, and that no occupational pension fund, however well funded, could cope with the inflation levels that occurred under the last Labour Government?

Mr. Lilley

My hon. Friend is right. We are uprating the pension by 3.6 per cent.—the rate of inflation prior to the uprating statement. The current, most recent, figure is 1.7 per cent.—half that level. That means that during the past 12 months inflation has risen less than it did on average for every month of all five years of the last Labour Government.

Mrs. Golding

Is the Minister aware that the only choice open to many pensioners is to live from hand to mouth? Why does he close his eyes to the desperate plight of those pensioners who are refused additional benefits because they receive tiny occupational pensions?

Mr. Lilley

We have been increasing the amount of resources channelled to pensioners with the lowest incomes. I am sure that the hon. Lady will welcome the fact that in the uprating statement I was able to confirm that, on top of the increase in line with inflation, an extra £500 million would go, through the pensioners' premiums, to those on the lowest incomes.

Mr. Lidington

Is my right hon. Friend aware that thousands of Maxwell pensioners had no choice because membership of the pension scheme was a condition of their employment? Has my right hon. Friend a message for those office holders who are still haggling and delaying the unfreezing of the common investment fund, which should be paid to the benefit of those pensioners in need?

Mr. Lilley

My hon. Friend powerfully makes his point, which I think will have much support on both sides of the House. We hope that Sir John Cuckney's request is successful and that matters will be resolved rapidly. We want those involved—liquidators, solicitors, executives or trustees—to bring about an early settlement and distribute the money so that the pensioners know that they can keep receiving their pensions.