HC Deb 23 February 1998 vol 307 cc6-7
6. Mr. Bradshaw

What assessment she has made of (a) present and (b) future inequality in pensioner incomes. [29079]

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

We want today's and tomorrow's pensioners to enjoy security in retirement. Estimates show that the gap between the best and worst-off pensioners will be even wider in future than it is today under current policies, so a key objective of the pensions review is to ensure that pensioners have an adequate income in retirement and that they share fairly in rising national prosperity.

Mr. Bradshaw

Can my hon. Friend confirm that the sum that the Government are spending on extra winter fuel payments is more than would have been expended if we had reintroduced the link between earnings and pensions? There is the added advantage of helping poorer pensioners most, including nearly 7,000 in my constituency in Exeter. Does this not show that things can be done now, notwithstanding the outcome of the pensions review, to help narrow the gap between rich and poor pensioners?

Mr. Denham

My hon. Friend is right. We have taken action to help all pensioners with fuel bills to pay them through winter fuel payments. Help within that has been especially focused on poorer pensioners receiving income support, who have already received their payment of £50. The total cost of the package this year is expected to be about £200 million, which is more than the additional costs that would have been involved in uprating pensions by earnings rather than by prices.

Mr. Gibb

The Secretary of State has told us that the Government sought the Government Actuary's advice and acted properly upon it. What does "acted upon it" mean? Does that mean that the Government implemented the recommendations in full, or in part?

Mr. Denham

We have considered the Government Actuary's report and have taken action.

Mr. Corbyn

Does my hon. Friend accept that, notwithstanding the welcome money for winter fuel, the real way in which to eliminate poverty for many pensioners is to re-establish the link with earnings and to increase the pension accordingly? The previous Government took more than £20 a week off every pensioner in this country. Private provision cannot—and never will be able to—help the poorest in this country, who often do not have long-term jobs that enable them to buy into occupational pensions. Should we not look to state provision to eliminate poverty?

Mr. Denham

We have already taken action to help today's pensioners. The pensions review will report later this summer. It has involved a series of meetings with Jack Jones and the National Pensioners Convention to discuss the position of today's pensioners and what action can be taken.

Most people who enjoy security in retirement have two pensions: the basic state pension and a second pension, often provided through an invested fund. I am sure that that will be a key element of our strategy for the future.

Mr. Burns

On pensioner incomes, will the Minister confirm that the Chancellor and the Secretary of State have boasted on numerous occasions that the winter fuel payment will be paid to all pensioners in the United Kingdom? Will he now confirm that that is not the case, that anyone reaching pensionable age on or after 6 January 1998 will not receive the payments this year and that the cut-off date will affect up to 150,000 pensioners by the end of March, when the money is finally expected to be paid? Will he consider making the money available to those pensioners, who are getting not a new deal but a raw deal from the Government? Will he explain the fiasco—and apologise to the House for it—in which cheques were sent to pensioners living in residential homes, and why some of those pensioners will be able to keep the money and others will not?

Mr. Denham

The House will remember that, on a number of occasions, the hon. Gentleman voted to increase VAT on fuel to 17.5 per cent. Common sense suggests that once the announcement on winter fuel payments was made, it was essential to make payments as quickly as possible. It was important to have a qualifying period that was easier for pensioners to understand and was operationally deliverable. It was set as the week commencing 5 January. If it had been set later, the exercise could not have been completed in time for payments to be made to help with winter fuel bills.