HC Deb 05 July 1999 vol 334 cc619-22
2. Mr. Bill O'Brien (Normanton)

What progress is being made on the upgrading of retirement pensions; and if he will make a statement. [88023]

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

A statement on uprating will be made at the normal time. Pensioners will share in rising national prosperity.

Mr. O'Brien

I appreciate all the contributions that have been made and the work that has been done by the Government to help pensioners. The present Government have done more since the general election than was done in 18 years under Conservative Governments. However, my concern now is for today's pensioners. Increases in water charges and in the television licence fee, and the fact that pensioners must now pay more for reduced services, mean that the increase in their outgoings is greater than the increase in the cost of living, according to which their pensions are calculated. That is driving more people into the poverty trap.

Now, we have the threat of the reduction or withdrawal of housing benefit. More than 50 per cent. of pensioners in my constituency receive that benefit, and its loss will be tragic for pensioners. Will my right hon. Friend take account of my concerns—which are shared by millions of pensioners—and assure us that today's pensioners will not lose out and that their quality of life will not be eroded?

Mr. Darling

First, there is no question of pensioners losing housing support. All Governments have recognised that it is necessary to ensure that pensioners can meet their housing costs, and that will remain the case. However, my hon. Friend raises an important point. One of the problems that we have inherited is that, in this country, the gap between rich and better-off people and poor people has never been greater. The same applies to pensioners: the gap between better-off and poor pensioners is at its largest for very many years.

The Government's objective is to help today's poorest pensioners by giving them the minimum income guarantee. We are spending an extra £4 billion during this Parliament to help the pensioners whom my hon. Friend mentioned, who lost out in the Tory years. We have more to do. We are increasing the winter fuel payment fivefold this year and we are determined to ensure that, in future, pensions provision is structured far better than it was in the past, so that we never again have a large number of elderly people left with very little support—as we did when the Tories were in power. We are starting to tackle that and put it right.

Mr. Edward Leigh (Gainsborough)

The Labour Government consider that the existing state pension is inadequate, which is why they are introducing the stakeholder pension. However, has the Secretary of State seen a recent report published by the Institute for Fiscal Studies which shows that, instead of introducing the stakeholder pension, the Government could have achieved the same ends by reforming existing pension arrangements? Instead of setting the cart before the horse by introducing the Bill before the consultation period, why have not the Government come forward with a simple reform, buttressing the contributory principle and ensuring that people in future have a decent pension instead of the bewildering array of stakeholder and second pensions, which is confusing people and not achieving the Government's aims?

Mr. Darling

We inherited a situation where, after the Conservatives' 18 years in office, one person in three of working age was liable to retire on income support right from day 1—such was the inadequacy of the pension provision that the Tories left us. We have ensured that the basic state pension remains the foundation of pension provision. We have introduced the minimum income guarantee for the poorest pensioners. What is more, we are making changes to ensure that people can retire on more than that minimum income guarantee because, if they do not have occupational pensions, or if it is not appropriate for them to be in personal private pension schemes, they can get access to a funded pension through stakeholder pensions.

I am not sure how up to date the hon. Gentleman keeps on these matters, but I would say to him that the approach that we set out in our Green Paper last December has been almost universally endorsed. By contrast, there has been absolute silence from the Tories as to what their pension policy is. We do not know. Perhaps, under the new regime, there will be a pensions policy, but until they get a pensions policy perhaps they should consider the benefits that our reforms will bring.

Mr. Chris Pond (Gravesham)

I welcome the progress that has been made on welfare reform, but is my right hon. Friend satisfied that enough has been done, and is being done, on welfare reform to meet the challenges of the 21st century?

Mr. Darling

We have made a very good start in the first two years. We are the first Government ever to express our determination to eradicate child poverty within 20 years—something that the Tories never did, or would do. We are making changes to the benefit system to ensure that work pays and to ensure that people cannot be written off—or be allowed to write themselves off, as happened under the Tories—and we are making long-term changes to the pension structure, which was long overdue. However, we have far, far more to do, and we will not be deflected from reforming the welfare state, ensuring that a system that was designed 60 years ago is brought up to date. We have made a useful start; we have much more to do, and I am determined that we will see it through right to the end.

Mr. David Willetts (Havant)

I presume that the Secretary of State means that he will not be deflected by his own unhappy Labour activists, who were causing him so much trouble at the weekend. Can he confirm that the value of the pension will be one of the subjects covered in the welfare policy review that he was forced to offer his unhappy supporters, such as the hon. Member for Normanton (Mr. O'Brien), at the weekend? What other Government policies will now be reviewed under pressure from the right hon. Gentleman's party activists? At a time when the Government are presiding over an increase in welfare spending of £38 billion over three years, the last thing we need is yet another roadshow.

Mr. Darling

The hon. Gentleman has some cheek in lecturing us on social security spending. Despite all the rhetoric, over the 18 years during which the Conservative party was in power, Conservative Governments increased social security spending by 90 per cent. Under the Labour Government, the rate of growth of the social security budget is half what it was under the Tory Government. We are ensuring that the money that we spend is spent to the best possible effect. That is why we are spending a record amount on increasing child benefit to alleviate and then eradicate child poverty. That is something that the Tories never did.

We are ensuring that work pays so that people get off benefit and get into work. That is something that the Tories opposed and did nothing about for the almost 20 years during which they were in power. We are also addressing other problems that they left us. We have a generation of pensioners who lost out because of the inadequate pension provision made by the Tories. As I said to my hon. Friend the Member for Gravesham (Mr. Pond), we have made a start, but there is a great deal more to do.

Unlike the Tories, we are not prepared to tolerate a situation where a benefit system designed for a different generation in different times becomes increasingly out of date. We shall make the changes that are necessary to ensure that we have a benefit system that makes work pay and provides work for all those who can work as well as providing security for those who cannot.

Mr. Lindsay Hoyle (Chorley)

Will my right hon. Friend ensure that pensioners in Chorley and throughout the country will not be failed by the Labour Government—unlike the Conservative Government, who presided over 18 years of failure? That is a trap into which we should not fall. Will my right hon. Friend ensure also that, whenever possible, he will increase the basic pension for all our pensioners?

Mr. Darling

We certainly will. As I said to my hon. Friend the Member for Normanton (Mr. O'Brien), many pensioners' incomes have increased, mainly as a result of occupational pensions. The problem is that many more pensioners have lost out. Over the years during which the Tories were in power, some pensioners became poorer and poorer, and the Tories did nothing about it. The minimum income guarantee, the fivefold increase in the winter fuel allowance, the return of free eye tests and a host of other measures, including increasing investment in the national health service—all these things were opposed by the Tory party—mark the difference between this Government, who are concerned about the well-being of pensioners, and the Tory party, which both during its time in office, and now, it appears, in opposition, has had nothing constructive to say.

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