Retired People (Hansard, 11 January 1999)

§ 4. Mr. Andrew Mackinlay (Thurrock)
What further measures are proposed to increase services and disposable income for retired people. [63185]

§ The Secretary of State for Social Security (Mr. Alistair Darling)
Through our Government strategy for older people, we are co-ordinating a number of cross-Government initiatives to ensure that the needs of older people are better understood and that their quality of life is improved. A consultation paper, "Building a Better Britain for Older People", was published on 23 November 1998. The paper sets out what has already been achieved and, above all, what needs to be done.

§ Mr. Mackinlay
I acknowledge the initiatives taken by the Minister, and his Green Paper proposals, of which most hon. Members in the Chamber will be beneficiaries. I ask the Minister to agree that there is an immediate problem regarding the income of existing pensioners. Bearing in mind the appallingly low take-up of some income-related benefits, and bearing in mind the fact that the minimum income guarantee will depend on people getting income support, what will he do to spend energies comparable with those spent on combating fraud, on encouraging people to take up their entitlement, to ensure that they have an adequate income? Will he comment on Age Concern's report, which says that a modest but adequate income for retired people would be about £150 a week, and that only a quarter of pensioners are anywhere near that figure?

§ Mr. Darling
On the latter point, the whole point of the Government's long-term strategy is to ensure that as 7 many people as possible retire on an adequate pension. That is the rationale that underpins our approach, which is set out in the Green Paper published on 15 December 1998.
My hon. Friend is quite right. We have inherited a situation where far too many pensioners are living on a low income. We reckon that between 400,000 and 700,000 pensioners who might be eligible for income support or other benefits are not claiming. My hon. Friend knows that, last year, we ran a pilot project in nine areas to find out why those people were not claiming. We visited them; we telephoned them; we wrote to them—

§ Mr. Mackinlay
What is the answer? [Interruption.]

§ Mr. Darling
The answer is not a laughing matter. Many such people are living in very difficult conditions. It is clear that some who did not know that they were entitled to benefits are now receiving them. Others, for reasons that are not at all clear, are eligible for benefits but will not claim. We do not know whether that is because they do not want to claim or because they receive other family support.
My hon. Friend asked me what action the Government will take on entitlement commensurate with that on fraud. We are planning to mount a take-up campaign later this year to encourage people to claim the benefits to which they are entitled. Take-up and fraud are equally important because every penny that is taken from the social security system through fraud is not available to those who genuinely need help.

§ Mr. Steve Webb (Northavon)
The Secretary of State has pledged in the long term to link the so-called income guarantee to earnings rather than prices. Does he accept that, with two thirds of recipients already over the age of 75, the long term is a difficult concept? Will he therefore pledge to link the income guarantee to earnings at the earliest possible opportunity?

§ Mr. Darling
The hon. Gentleman will recall that we said in the Green Paper that it was our intention to increase the minimum pension guarantee by linking it with earnings, consistent with prudent management of the economy. He will be aware that we have increased the money available under the present minimum pension guarantee so that the poorest pensioners receive the maximum possible help—£75 for a single person or £116.60 for a married couple. We are doing a great deal to help pensioners. On top of that, for the first time many pensioners are this winter receiving the winter fuel payment. The hon. Gentleman can shrug his shoulders at that, but it is real help going into the hands of every pensioner household—something that never happened under the previous Government. I understand the hon. Gentleman's reticence, because Liberal Democrats—at least down here in London—seemed to be against such a policy. I can tell him, however, that Liberal Democrats north of the border seemed to be in favour of it.

§ Mr. Peter L. Pike (Burnley)
Although my right hon. Friend is rightly making pledges on the future of the basic pension, the second pension will be increasingly important in the next century. Will he guarantee that scandals such as that in the Bellings pension fund, from which a great deal of money was swindled seven years 8 ago—many people affected still do not know what they will receive—will not be repeated in the next century, when people will be dependent on what they have paid for, and should receive it?

§ Mr. Darling
My hon. Friend raises an important point. Over the past few years there have been several pension scandals. It is particularly galling for employees to pay into a fund and then discover, for one reason or another, that the money is not available. There is legislation on the matter on the statute book. If it needs to be changed or strengthened, the Government will address the problem.

§ Mr. Howard Flight (Arundel and South Downs)
The Secretary of State referred to reductions in fraud. Will he confirm that the Government have not in any way backed down from their pledge to investigate, to the fullest extent, housing benefit fraud? What initiatives are the Government taking in pursuing the curbing of housing benefit fraud?

§ Mr. Darling
On housing benefit fraud, which is not the subject of the question, but which, if Madam Speaker will allow me, I shall address—

§ Madam Speaker
Order. I should not have allowed the question to be asked.

§ Mr. Darling
The Government announced just before Christmas an initiative to invest about £100 million in ensuring that local authorities that administer the payment of housing benefit make far better and more efficient checks. The hon. Member for Arundel and South Downs (Mr. Flight) is right to say that housing benefit is prone to fraud; it has been for many years. We decided at an early stage to take action to cut such fraud by better checking of data. Local authorities are now able to check someone's entitlement with the Benefits Agency. We want better evidence before we pay housing benefit. The Government recently introduced another initiative whereby the Post Office will not redirect housing benefit cheques. That will prevent people from claiming housing benefit for one address while living somewhere else.
I think that the hon. Gentleman will agree that the Government are taking action across the board on housing benefit and, indeed, on fraud generally. We are already beginning to see results. One of the reasons why the growth of social security spending in this Parliament is less than half that of the previous Parliament is that we are taking such initiatives to ensure that accurate payments are made and fraud is cut.