HC Deb 08 February 1999 vol 325 cc18-9
13. Mr. Desmond Swayne (New Forest, West)

What plans he has to ensure that his welfare reforms encourage self-reliance. [68018]

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

We are building a modern welfare state, based on rights and responsibilities. We are actively providing opportunities and incentives to help people into work and to provide for themselves, and we are ensuring that work pays while providing security for those who cannot work.

Mr. Swayne

Although we can continue to debate the consequences of means testing, does the Secretary of State accept that the minimum pension guarantee will lead inevitably to an increase in means testing?

Mr. Darling

The logic of what Conservative Members are saying is that we should withdraw support altogether from people who have not managed to save any money. We do not believe that the prospect of leaving pensioners, or anyone else, destitute is acceptable. One of the problems that we have inherited is that a third of people who are now working are retiring on benefit. Over the years, the poorest pensioners have suffered a great deal, and we have introduced the minimum pension guarantee to help those who have nothing. We are providing also a guarantee for the poorest disabled people. Most people who look at what we are doing will realise that we are doing the right thing by those people.

We are proposing a framework that will mean that the majority of people who are working will accrue enough of a pension during their working life to retire on a decent income. In the pensions Green Paper, we have a coherent and workable strategy, which will mean that all those who can work throughout their lives and can save will retire on a decent pension. At the same time, we will not turn our backs on those who are unable to save, as the Opposition appear to be urging us to do.

Mr. Dale Campbell-Savours (Workington)

Do not high rents and high housing benefit payments totally undermine self-reliance? Is not the real answer to the problem to find a way of dramatically cutting rents in this country?

Mr. Darling

My hon. Friend is right to say that the housing benefit regime is in need of reform, and he is no doubt aware that the Government are considering how to improve the situation, but he must recognise that the system that we inherited has grown up over about 25 years, and that it will be some time before we can announce our conclusions on how to implement that reform.

Mr. John Bercow (Buckingham)

Further to the very pertinent inquiries from my hon. Friends the Members for Gosport (Mr. Viggers) and for New Forest, West (Mr. Swayne), why will not the Secretary of State, instead of blathering, simply admit the obvious truth—that the Government's pension proposals will massively increase means testing at the lower end of the scale, discouraging savings at the margins? He must surely admit that, in that sense, the policy that he advocates will be a penalty for self-reliance and not a reward.

Mr. Darling

I do not accept that at all. The whole strategy behind the Green Paper is to ensure that as many people as possible have the choice to save for their retirement. The hon. Gentleman will have to face up to the fact that without a change of policy, a third of people currently working would retire on benefit. The Government have decided that the policy needs to change, to ensure that, if people work for a lifetime, they can save and retire on a pension that is above means-tested income support. We believe that that is of considerable importance, but we will not turn our backs on those poorest pensioners who, for one reason or another, have not been able to save for their retirement. We have a comprehensive strategy for pensions, which the previous Government did absolutely nothing about for 18 years.