HC Deb 10 December 1996 vol 287 cc112-3
9. Mr. John Greenway

To ask the Secretary of State for Social Security what representations he has received in respect of a review of the decision to raise pensions in line with prices rather than earnings. [6853]

The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald)

We receive many representations on this point. The fact remains that the estimated net cost of increasing the basic pension from April 1997 by the higher of earnings or prices since 1980 would be £7.9 billion.

Mr. Greenway

Will my hon. Friend confirm that the Government's policy remains one of continuing to increase the retirement pension in line with inflation and targeting additional help on the elderly poor? Does he agree that, from the figure that he has mentioned, no Government could afford to restore the earnings link? Is it not sheer hypocrisy for the Opposition to criticise the removal of the earnings link without committing themselves to restoring it?

Mr. Heald

Despite the ending of the earnings link, the average net incomes of pensioners have risen by 51 per cent. since 1979. That is because we have maintained the value of the basic state pension, encouraged private provision and targeted help on those most in need.

What is the Opposition's advice? It is vague and subject to a review body. We have exchanged the dangerous old certainties of Labour for a new dangerous uncertainty. As Baroness Castle put it—well, it is meaningless, is it not?

Mr. Denham

Among the pensioners who have to supplement their basic state pensions are war pensioners. Will the Minister confirm that three of the administrative changes that are proposed—ending reminders, ending automatic uprating or review and requiring independent evidence—will mean that, over and above any administrative savings, 16,000 war pensioners, according to the Department's own civil servants, will lose out? Will the Minister confirm that 16,000 war pensioners will lose out as a result of those so-called administrative savings?

Mr. Heald

I refer the hon. Gentleman to the reply that my right hon. Friend the Secretary of State gave earlier—it made the position clear—and also to what BLESMA, the British Limbless Ex-Service Men's Association, has said: The Government proposals introduce a number of improvements which will benefit both War Pensioners and War Widows and materially assist the War Pensions Agency in dealing more expeditiously with claims and appeals. That is what the people at the sharp end say. They do not go scaremongering, like the Opposition.

Mr. Stephen

Does my hon. Friend recall how easy it was for the Labour party to link pensions with rises in average earnings? In those days, Labour's management of the national economy was so incompetent that prices were rising a good deal faster than average earnings.

Mr. Heald

As my hon. Friend says, the Labour party in government robbed pensioners. There was 15 per cent. inflation every year for people who had saved throughout their lives. That is why we now need to target extra help on those who are most in need—and we are doing that: an extra £1.2 billion has been provided every year since 1988.