HC Deb 18 October 1993 vol 230 cc3-5
2. Mr. Streeter

To ask the Secretary of State for Social Security what was the average income of a pensioner with savings in 1979 and in the latest year for which figures are available.

The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague)

Converted to 1991 prices, the average income of a pensioner with savings was £90.10 a week in 1979. That had increased by more than half as much again—to £141.20 per week—by 1990–91, the latest year for which figures are available.

Mr. Streeter

I thank my hon. Friend for his impressive reply. Does he agree that the present Government have perhaps helped pensioners most of all by getting inflation down and keeping it down so that the real value of those pensioners' hard-earned savings is not constantly eaten away by ever-spiralling prices as it was in the late-1970s?

Mr.Hague

I thank my hon. Friend for his compliment and agree with his statements. It is only under this Government that pensioners and future pensioners have had the opportunity and incentive to save on any significant scale. Some 76 per cent. of pensioners now have savings income, and that income, on average, is more than twice pensioners' savings income in 1979. That is a far cry from the days of 1974–79, when the value of pensioner savings income actually fell.

Mr. McAllion

Will the Minister confirm that a report on households with below average income published by his Department last July revealed that there are nearly 3 million pensioners in this country whose income has either been frozen or cut since 1979? Is not that a national disgrace in a country as wealthy as Britain? Will he also confirm that the average incomes to which he referred excluded housing costs and, above all, the costs of heating houses once the Government have imposed VAT on domestic fuel at the next Budget? Will he now tell the House what protection he offers to those pensioners on income support and to those who get by on incomes slightly above benefit level? That is the burning issue facing the country and the House at the next Budget.

Mr. Hague

The households below average income figures to which the hon. Gentleman refers are available both including and excluding housing costs. Both sets of statistics are freely available. In considering those figures, however, the hon. Gentleman should reflect on the fact that the proportion of pensioners in the bottom quintile—the bottom 20 per cent.—of income distribution is 24 per cent., whereas in 1979 it was 38 per cent. That is a measure of the extent to which pensioners' living standards have improved over that period.

Mr. David Shaw

Can my hon. Friend confirm that one reason why the average pensioner income has been increasing so dramatically under the Conservative Government is that some 16 million people now save through life insurance schemes and towards second and even third and fourth pensions, and that in the next 20 to 30 years the prosperity of pensioners will constantly increase and improve as a result of the Government's policies?

Mr. Hague

There is a great deal in what my hon. Friend says: 61 per cent. of all pensioners and 69 per cent. of recently retired pensioners receive income from an occupational pension. That compares with 43 and 55 per cent. respectively in 1979. A great many more of the pensioners of the future now also have personal pensions as well as occupational pensions and a great many more of them are able to save. That bodes well for pensioners' living standards in the future.

Mrs. Golding

The Minister will be aware that that still leaves one in seven pensioners relying on state benefits and, as at present calculated, it looks as though a single pensioner's uprating next April may be little more than £1 a week, given the Government's failure to provide an adequate state pension. Will the Minister answer the question that my hon. Friend the Member for Dundee, East (Mr. McAllion) has just asked him? Will he guarantee pensioners full compensation for the devastating effect that VAT on fuel will have on their household budgets?

Mr. Hague

All parts of the hon. Lady's question are about the uprating statement, which has still to be made. I am afraid that she and the rest of the House will have to wait for the uprating statement by my right hon. Friend the Secretary of State. The Government have already made it clear, however, that there will be extra help far less well-off pensioners and that that help will be available at the same time as the higher fuel bills arise.