HC Deb 10 December 1996 vol 287 cc103-5
3. Mr. Amess

To ask the Secretary of State for Social Security if he will ask the Government Actuary to estimate the additional cost of paying a full basic pension from age 60 years. [6847]

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

At the instigation of the hon. Member for Peckham (Ms Harman), I have already asked the Government Actuary to estimate the additional cost of allowing people to draw the full basic pension from age 60. He calculates that the cost would build up to an extra £15 billion per year.

Mr. Amess

Will my right hon. Friend confirm that, to avoid the £15 billion cost of setting the pension age at 60, the basic state pension would have to be cut by £20 a week in Basildon, Southend, and across the country? Will he confirm that cutting the basic state pension by £20 a week is now the policy of the Opposition?

Mr. Lilley

I can confirm all the points made by my hon. Friend. The hon. Member for Peckham wrote to me after I had pointed out that the cost of her policy would be £15 billion a year. She stated: In government we will protect the public purse from any increase in expenditure … We will have to consider what level of basic state pension should be paid … We would seek the advice of the Government Actuary, but we anticipate … lower level of basic state pension. I asked the Government Actuary by how much the basic pension would have to be cut to avoid that cost, and he confirmed that it would be £20 a week for the rest of people's lives.

Mr. O'Hara

Speaking of pensions, the Secretary of State has referred to changes in the rules governing war pensions as "simplification". Since when does "simplification" mean cuts in four separate allowances for war pensioners and a tightening of eligibility rules for others? In whose dictionary does "cuts" mean "simplification"? Is it not merely a Tory con trick?

Mr. Lilley

I am sorry that the hon. Gentleman is joining in on a scaremongering story, which has been discredited since the leader of his party started it the other day. He should now know that we sent a detailed explanation of the measures that we were proposing to every member of the Central Advisory Committee on War Pensions, including the Labour party representative, the hon. Member for Mansfield (Mr. Meale). They have had a week, since the Budget, to consider the explanation. Last Thursday, they met in full session—although the hon. Member for Mansfield was not able to attend and did not feel that the measures were a threat to the people he and the other committee members represent—at the end of which they unanimously deplored the leaks and the story in The Guardian, and commended the manner in which my right hon. and noble Friend the Minister of State had handled the matter.

Subsequently, the Royal British Legion issued a statement which said: The overall consensus was that there is nothing unduly confrontational in the paper to cause concern among the ex-service organisations". The British Limbless Ex-Service Men's Association wrote to The Guardian to condemn its story, upon which the Opposition continue to rely, as containing a number of grave errors which can only cause distress to War Pensioners. Why are the Opposition causing distress to war pensioners?

Mr. Booth

In addition to protecting the basic pension, have we not also protected basic savings, in contrast to the Labour party, which presided over a great destruction of savings between 1974 and 1979, as inflation ripped away?

Mr. Lilley

My hon. Friend is right. The greatest threat to pensioners is inflation. We know that inflation is what happens under Labour Governments. In a single year, the last Labour Government wiped out one quarter of the value of the lifetime savings of pensioners. That is why we have had to introduce extra help for the elderly people who retired under Labour—to enable them to rebuild their savings under a good Conservative Government.

Ms Harman

As those in retirement who are entitled to extra help from the Department of Social Security are war pensioners, will the Secretary of State confirm that one option that was not put out for consultation, but was under consideration as recently as 14 November, was restricting in some way claims by those with psychiatric conditions"? That is a quotation from a DSS document. The principle of paying compensation for psychiatric conditions has been recognised since our troops experienced shell shock during world war one and suffered in Japanese prisoner of war camps in world war two. Will the Secretary of State keep faith with that principle and withdraw the proposal? Will he tell the House that he rules out restrictions on claims for psychiatric conditions caused by active military service?

Mr. Lilley

I am astonished that the hon. Lady should make that statement when she knows, because I wrote to her earlier today, that it is false. Neither I nor any of my Ministers have considered any such proposal. The hon. Lady may have a bit of paper written by a junior official purporting to suggest that it has been considered, but it has never been submitted to Ministers, has never been considered by Ministers, is not approved by Ministers and is not part of the package put to war pensioners. It is shocking and discreditable that the hon. Lady is trying to cause distress to elderly people who rightly receive help because of the mental suffering caused by their treatment at the hands of the enemy.