HC Deb 17 November 1997 vol 301 cc4-5
2. Mr. Wilkinson

If she plans to announce proposed changes to the state old-age pension system before the Christmas Adjournment. [14631]

The Parliamentary Under-Secretary of State for Social Security (Mr. John Denham)

We have no such plans.

The pensions review, announced on 17 July, is looking at the central areas of insecurity for elderly people, including all aspects of the basic state pension and its value. A key objective of the review is to ensure that pensioners have security and dignity in retirement, that they should share fairly in rising national prosperity and that public finances should be both sustainable and affordable.

The first part of the review ended on 31 October and we are now carefully considering the 1,700 responses we have received.

Mr. Wilkinson

I am grateful for that answer. Will the hon. Gentleman recognise that the much trumpeted stakeholder pension was one of the central planks of his party's election manifesto? Will not the public be disappointed that there has been no concrete action to date? Since 2 May, have not the activities of the Department to which the Minister belongs been largely characterised by personality clashes, turf wars and a supine acquiescence in the dictates of the Treasury, which removed dividend interest tax relief, to the detriment of private and company pension holders?

Mr. Denham

The hon. Gentleman is completely wrong. The first phase of consultations on the pensions review has produced a consensus not just on the need for low-cost, value-for-money, flexible stakeholder pensions but on the possibility of introducing them—which the previous Government signally failed to achieve. We will consult shortly on the further details of the stakeholder pension, but the truth is that since the Government were elected, low-cost, value-for-money second pensions for people who cannot join employers' occupational schemes have moved from election policy to something that can be turned into concrete reality.

Mr. Leslie

May I point out to my hon. Friend the need to raise awareness among the public at large of pension provision, especially in the private sector? Has much progress been made during the pensions review regarding a widespread education programme on pensions, especially for people at the start of their working lives?

Mr. Denham

My hon. Friend is absolutely right. It is essential that we increase knowledge about and understanding of pensions and that individuals are empowered to take the right decision for them about their pension provision. That is why we established a pensions education and awareness group, drawing on governmental representatives and the private sector, which will report in January on the best way for us to improve pensions knowledge.

Mr. Rendel

How do the Government explain their double standards? Before the general election they promised pensioners that they would identify those who were losing out and ensure that they got everything to which they were entitled, yet now, apparently, part of the Government's plans for pensioners—who very often are the people who find it hardest to claim benefit—is to refuse to allow them to claim benefits, including income support, backdated by more than one month.

Mr. Denham

We have already taken action to initiate research into why 1 million pensioners do not receive the income support to which they are entitled. We need to undertake that research so that we can modify and modernise the social security system to make it work more effectively. Equally, we must simplify and modernise the social security system so that people receive the benefits to which they are entitled at, or as close as possible to, the moment they can claim them. Allowing many people not to claim their benefits for a long time is not the way to run the system. We need to establish why pensioners are not claiming and to ensure that the system makes it easier for them to claim.

Mr. Pike

Does my hon. Friend believe that the review provides the chance to get rid of an anomaly—it is a problem that occurs year after year—regarding the non-index-linked parts of the pension, such as the £10 Christmas bonus and the 25p extra for 80-year-olds, that has existed for about 50 years? Does not the review give us the chance to remove those problems from the system permanently?

Mr. Denham

The Christmas bonus and its future value is one of the topics that are under discussion with the national pensioners convention as part of the wider review of all the forms of income that pensioners receive.