HC Deb 06 July 1998 vol 315 cc719-22
2. Mr. Gareth R. Thomas (Harrow, West)

What representations she has received on the Government's proposals to assist the poorest pensioners. [47469]

12. Mr. Chris Mullin (Sunderland, South)

What representations she has received on her proposals to assist the poorest pensioners. [47479]

15. Mr. Phil Hope (Corby)

What action she is taking to help the poorest pensioners. [47482]

The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman)

We have received representations on a number of issues facing the poorest pensioners. An estimated 1 million of today's pensioners are not receiving the income support to which they are entitled. We are taking steps to tackle that by a programme of research into why so many pensioners do not receive their entitlement, and a programme of action involving nine pilot projects to test ways of getting more automatic help to pensioners.

Mr. Thomas

Age Concern Harrow and Harrow Pensioners Action Group, two excellent organisations representing elderly people in my constituency, share my concern and that of my right hon. Friend about the number of elderly people not taking up their right to benefit. When does she expect her Department's research to be concluded, and can she assure the House that its findings will be acted on speedily?

Ms Harman

We have already had interim findings from the research, showing that pensioners are losing out on between 24p and £51 a week in income support. We have also identified, through the interim report—I will let my hon. Friend have a copy—some of the reasons why they do not claim: the complexity; not understanding the system; and not wanting to have to prove that they are poor. We will take all those issues into account. The full report will be published at the beginning of next year, and we will certainly take action thereafter.

Mr. Mullin

Is my right hon. Friend aware that, in the long term, the answer is not to offer pensioners more effective ways of claiming benefit but to make them independent of benefit, and is not the best way of doing that to phase back in the link with earnings?

Ms Harman

In the long term, we need what has always been important to allow people to have a decent standard of living in retirement: the basic state pension topped up by a good second pension. We are committed to the basic state pension as the foundation of income in retirement, but we are also committed to extending occupational pensions and introducing stakeholder pensions so that people can put money aside and get good value for money from pensions on top of the basic state provision.

Mr. Hope

Is not it an indictment of the system that 1 million pensioners are not claiming the benefit to which they are entitled—a situation that we inherited from the previous Administration? Is my right hon. Friend aware of the independent report, "We All Need Pensions—The Prospects for Pension Provision", by Tom Ross, which says that there is likely to be a rise in pensioner inequality and that the majority of the poorest pensioners are women? Can she assure me, and the pensioners in Corby, that the Government will make meeting the needs of the poorest pensioners an urgent priority?

Ms Harman

We will take immediate action to meet the needs of the poorest pensioners without waiting for the results of our review, and we will create a better long-term framework. We want to tackle the problem of growing inequality among pensioners caused by the growing gap in retirement incomes. We must tackle the problem of avoidable drops in income in retirement by making sure that people have a decent second pension. We must ensure that low earners or those who do not earn have a decent standard of living in retirement, which is the state's responsibility.

Mr. John Whittingdale (Maldon and East Chelmsford)

How does the right hon. Lady justify the fact that 300,000 of the poorest pensioners who do not pay tax but who have small savings will be deprived of their income as a result of the abolition of dividend tax credits? Is she aware that despite assurances given during proceedings on the Finance Bill, Ministers have done nothing to help those pensioners?

Ms Harman

The best way to ensure that everyone can enjoy security in retirement is to build a thriving, skilled, well-paid economy. The opportunity to work and to put money aside for retirement is important. Companies providing occupational pensions will benefit from the reduction in corporation tax. Rebates for personal pensions will increase from April 1999. There is no long-term problem for occupational schemes. The Government are taking a long-term view of the economy, and of sustaining the investment that will lead to strong pensions. The pensioners who are losing out are those who have no second pension, no state earnings-related pension scheme, no occupational pension and no savings. [HON. MEMBERS: "Answer the question."] I am.

Mr. Dafydd Wigley (Caernarfon)

Will the Secretary of State take note of the question put by the hon. Member for Sunderland, South (Mr. Mullin) about the loss of the link between pensions and earnings? Her party campaigned vigorously in opposition for the re-establishment of that link. Pensioners have lost £20 a week as a result of the loss of the link, and those who are already pensioners have no opportunity to get a second pension. What will she do to make sure that the basic state pension is at an acceptable level, and that people do not have to revert to income support?

Ms Harman

The Conservative Government's ending of the earnings link has certainly contributed to the growing gap in income in retirement. The poorest pensioners have been left behind. We have acted; within two years, an extra £400 million will be invested in support for pensioners, which will mean more money for pensioners than they would have had if we had reinstated the earnings link for this year and next.

Mr. Steve Webb (Northavon)

The Government's plans for the poorest pensioners are believed to include a guarantee for older, poorer pensioners, if we are to believe the latest leak—and leaks from the Department of Social Security seem rather reliable. Will the Minister set out her thinking on how money can be guaranteed for the oldest, poorest pensioners?

Ms Harman

In the short term, we want to see more pensioners on income support because we want all the pensioners entitled to income support automatically to receive their benefit. In the longer term, a combination of basic state pension and wider provision of second pensions will mean that fewer people are left to depend on means-tested benefit. The basic state pension is part of that equation.

Mr. Quentin Davies (Grantham and Stamford)

The right hon. Lady failed spectacularly to answer my hon. Friend the Member for Maldon and East Chelmsford (Mr. Whittingdale). Let us hope that she does better with me.

Why have the Government taken the heartless and thoroughly sickening decision to tell local authority social services departments to change the operation of the rules so that where poor pensioners have their assets eroded to £16,000 through payment of residential and nursing fees, they will no longer be allowed to top up fees from their remaining £16,000? As a result of that, many poor pensioners will be forced to move to cheaper homes. Does the right hon. Lady realise that a forced move can be threatening to the health of old, frail people? It may even threaten their lives. Do the Government care?

Ms Harman

The Government are very concerned about health and social services for all pensioners, particularly the poorest pensioners. The responsibility for social services authorities and for health service provision for the elderly lies with my right hon. Friend the Secretary of State for Health. However, we work across Government to see how different departmental policies affect pensioners. The Under-Secretary of State, my hon. Friend the Member for Southampton, Itchen (Mr. Denham), is chairing a ministerial group to explore how Departments work together to ensure proper support and provision for pensioners.