HC Deb 11 January 1999 vol 323 cc12-3
7. Mr. Norman Baker (Lewes)

What measures he has taken to reduce poverty among pensioners. [63192]

The Minister of State, Department of Social Security (Mr. Stephen Timms)

We have reduced VAT on fuel and introduced winter fuel payments to help pensioners with their heaviest quarterly fuel bill.

As my right hon. Friend has said, we announced last month in the pensions Green Paper that, from April, we will introduce a new minimum income guarantee for pensioners of at least £75 a week for single people and £116.60 for couples.

Mr. Baker

I hear what the Minister says, but is he aware that many pensioners in my constituency—in Seaford, Polegate and other places—genuinely doubt the Government's commitment to dealing with poverty among pensioners? Will he look seriously at Liberal Democrat proposals to increase the basic pension by £5 for those aged over 80 and by £3 for those aged over 75? Does he understand that my constituents want a fair deal for pensioners from the Government?

Mr. Timms

I can reassure the hon. Gentleman about the Government's commitment. We made it absolutely clear in our manifesto that we would give priority to the poorest pensioners because that is the group which requires the most urgent action. The minimum income guarantee allows us to concentrate the extra help on those pensioners and offers to those on income support a substantial increase in their income from next April. We could not have achieved that if we had used the resources on the basic pension instead.

Mr. John Bercow (Buckingham)

Given the importance of avoiding or reducing poverty among carers who retire, will the proposed carer's pension take the form of a funded personal pension—which could be portable and flexible so that, when the circumstances of the carer changed, the value of the pension could change accordingly—or will it simply be a state-funded addition to the carer's pension?

Mr. Timms

It will be provided within the state second pension. We have proposed that carers will be credited with contributions so that, in effect, they will gain about £1 a week in pension for each year of caring that they undertake. It will not be a funded scheme, but it is a huge step forward for carers, which has been widely welcomed and is long overdue.

Mr. Quentin Davies (Grantham and Stamford)

On behalf of those on the Opposition Front Bench, I warmly congratulate the Minister on his promotion.

Perhaps, under pressure from Conservative Members, the Government are at last making a little progress, given that the Secretary of State has at least half acknowledged to my hon. Friend the Member for Chipping Barnet (Sir S. Chapman) that means testing can be extremely damaging and extremely unfair. In that case, one might reasonably ask why the Government do nothing but extend its application to bereavement benefits, incapacity benefit, the minimum income guarantee and even to fuel payments and so forth.

Does the Minister realise that the present system is so perverse that, if he were an independent financial adviser who suggested that people on small earnings should take out a personal pension or save money where the return would be substantially negated by the loss of means-tested benefits, he would be liable for criminal prosecution for mis-selling?

Mr. Timms

I enjoyed that question. I am rateful to the hon. Gentleman for his congratulations on behalf of those on the Opposition Front Bench and I can reassure him that the progress that we are making is not as a result of pressure from him and his colleagues, although it is substantial.

We acknowledged in the Green Paper that, under the present system, some of those who qualify for the minimum income guarantee achieve no benefit from their savings and that some people with modest second pensions do not qualify for the minimum income guarantee at all. A range of measures could help, such as some form of disregard on pensioners' income. In the Green Paper, we asked for people's views on the best way in which we can help. We want to give better rewards to savers and, unlike the last Government, we aim to present proposals—in this Parliament—to achieve that end.