HC Deb 28 January 1997 vol 289 cc142-3
6. Sir David Knox

To ask the Secretary of State for Social Security what proportion of those retiring now are in receipt of occupational pensions; and what he estimates the proportion will be in 10 years' time. [11374]

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

It is estimated that in 1979, 55 per cent. of recently retired people were in receipt of an occupational pension, compared with 70 per cent. in 1994–95. This is projected to rise further to more than 75 per cent. in the next 10 years.

Sir David Knox

Does my hon. Friend agree that adequate occupational pensions have done a great deal to ease poverty and anxiety among retired people and that further extension of them is essential if retired people are to live fuller and more satisfying lives?

Mr. Heald

The Government's policy to maintain the value of the basic state pension, encourage more private provision and target help on those most in need has led to record rises in pensioners' incomes—rising almost as much each year as they did during the whole of the last Labour Government's period in office. My hon. Friend is right; we must go further.

Mr. Frank Field

After 18 years of Conservative rule, will the Minister tell the House how many pensioners are still poor?

Mr. Heald

The hon. Gentleman asks a question that I am very happy to answer. Even the poorest pensioners have seen incomes rise by 28 per cent. since 1979.

Mr. Field

How many are in poverty?

Mr. Heald

It is all very well for the hon. Gentleman to ask that question, because he defines poverty in relation to the level of income support—so that, if one increases income support, one ends up with more poverty. It is nonsense. What is demonstrable is that, since 1979, under the Government, pensioners' incomes have increased dramatically—on average, by 60 per cent.—and that even the poorest pensioners have seen a 28 per cent. increase. That is very different from what happened under Labour, when pensioners were robbed of their savings through high inflation.

Mr. Dykes

There has been spectacular growth in private pensions—which have given the elderly new horizons and new freedoms, and are a matter of great pride for Conservative Members. None the less, is my hon. Friend satisfied that expenses and commissions on the new pension schemes are now under adequate control?

Mr. Heald

As my hon. Friend says, it is important to ensure that pension charges are kept to the minimum. The new disclosure rules are having that effect, and the Securities and Investments Board is meeting with pension providers to discuss those issues. The most important factor, however, is the yield on pensions. Since 1980, there has been a 9 per cent. annual real yield on private pensions in the United Kingdom. We also have more invested in pensions than all of Europe put together. The result is that, in 2030, when the UK's finances are in surplus, France and Germany will have a debt of 100 per cent. of GDP, and Japan's debt will be 300 per cent. of GDP.