HC Deb 19 October 1998 vol 317 cc942-4
6. Mr. Paul Flynn (Newport, West)

What new proposals he has to ensure that all pensioners share fairly in the increasing prosperity of the nation. [53472]

The Secretary of State for Social Security (Mr. Alistair Darling)

One of the aims of the pensions review is to ensure that pensioners have an adequate income in retirement and that they share fairly in national prosperity. My hon. Friend will be aware that we intend to publish our proposals in the Green Paper on pensions later this year.

Mr. Flynn

Although I recognise the many good things that the Government have done for pensioners, I would like the new Secretary of State to explain to us—following the question asked by my hon. Friend the Member for Great Grimsby (Mr. Mitchell)—why the basic pension was not increased last year or this year by the increase in the rate of earnings? The money was in the kitty and the increase could have been made without infringing the promises made by the previous Government or by this Government. The basic pension is not a handout or a gift: it is paid for by personal contributions, which take into account the rate of inflation and are made for up to 50 years. The words stating that all pensioners shall share fairly in the increasing prosperity of the nation are taken from our manifesto at the general election. Will the Secretary of State now renew that pledge?

Mr. Darling

My hon. Friend is right to the extent that the Government had a choice last year in the comprehensive spending review. Some £2.5 billion was allocated to pensioners and we chose deliberately to spend it on doing more for the poorest pensioners rather than spreading the sum thinly among all pensioners. The poorest pensioners have lost out in the past few years. The restoration of free eye tests, concessionary travel and the winter fuel payments will help all pensioners, but especially the poorest whom we were most concerned to help. That is why we took that decision and I believe we were right.

Mr. Peter Viggers (Gosport)

I suppose that those most pleased with the minimum pension guarantee will be those who have done nothing to save for their retirement. Question 6 is about fairness. Can the Secretary of State confirm, for those who have saved for their retirement, that there are no circumstances in which they will be worse off than those who have not done so?

Mr. Darling

The hon. Gentleman raises a matter that is inherent in any system that has a degree of means-testing. There is nothing new about the point, as means-testing has been with us for many years under successive Governments of different colours. However, I do not agree that the help is going to pensioners whom the hon. Gentleman dismissed as somehow not deserving of any help. Through no fault of their own, many pensioners do not have sufficient means on which to live, and it is those pensioners whom we want to help the most, as they would otherwise face real difficulties.

Mr. Andrew Miller (Ellesmere Port and Neston)

One group of pensioners who will not share in the prosperity of the nation are the ex-employees of H. H. Robertson in my constituency. Now that the Serious Fraud Office has completed its inquiries into that company scandal, will my right hon. Friend liaise with colleagues in other Departments on whether mechanisms can be introduced to protect pensioners from having money removed from their pension schemes in future, and to ensure that they are treated as preferential creditors, and not in the outrageous way that they have been treated in that outrageous scandal?

Mr. Darling

I am aware of the case to which my hon. Friend refers. He is right to raise the matter. We are looking into it, and the regime presently in place quite clearly has not been able to deal with that situation. I hope to be able to report to the House in due course on proposals to deal with the problem that money that should be available for employees is not available because of action that should not have taken place.

Mr. Howard Flight (Arundel and South Downs)

May I ask the Secretary of State about the position of people who have money purchase personal pensions, many of which are relatively small? In particular, may I ask about those who have already retired? As the Minister will know, one can delay buying an annuity until the age of 75. In view of the enormous rise in the cost of annuities, the fall in what we can get for our money and the weakness of markets, will the Government consider ending, or at least suspending, the age 75 rule?

Mr. Darling

I am aware of the point raised by the hon. Gentleman. I cannot say anything this afternoon, but the Government consider the point from time to time. I cannot make any immediate promises.

Dr. Norman A. Godman (Greenock and Inverclyde)

May I say to the Secretary of State that I was pleased to hear him point out to the Conservatives that many millions of elderly people were quite unable to save for their senior years because of the nature of their employment? One example is trawler company fishermen who were never given security of employment. May I say that much more needs to be done for the many elderly people who do not take up the benefits to which they are manifestly entitled? Pilot studies do not go far enough. Does my right hon. Friend agree that every Benefits Agency office should be told that more needs to be done for elderly people in their areas?

Madam Speaker

Order. The hon. Gentleman did not put a proper question, a point that applies to Back Benchers as well as to Front Benchers. We must have brisk questions at Question Time.

Mr. Darling

I shall endeavour to give a brief answer. My hon. Friend is quite right. Many pensioners are entitled to benefits that they do not take up. I have said that I wanted far greater use of the telephone than previously because experience shows that that is one way in which to reach pensioners at home to persuade them to take up money that they would not otherwise receive. We have been conducting pilots because the reasons why pensioners do not take up their entitlements are quite complex. They are not as straightforward as people may initially have thought. I am anxious to ensure that we pool the evidence that we receive over the next few weeks so that when we embark on a national take-up campaign we can use the best techniques we can find to ensure that we deal with the problem highlighted by my hon. Friend. Far too many pensioners will sit at home in hardship this winter when they need not necessarily have to do so.