HC Deb 03 April 2000 vol 347 cc609-11
1. Mr. Ernie Ross (Dundee, West)

What progress the Government are making in tackling poverty among pensioners. [115863]

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

As a result of Government policy, all pensioners will be £3 a week better off, and those aged over 75 will be £5 a week better off. On top of that, many will benefit from our tax changes. Because we are committed to tackling pensioner poverty, the poorest pensioners on the minimum income guarantee are £14 a week better off than they were under the previous Government, and those aged over 75 who are on the minimum income guarantee are £16 better off.

Mr. Ross

Can my right hon. Friend tell us how many retired people do not qualify for the full basic state pension—for example, people who were self-employed or many married women—and who therefore do not benefit from any increase? Does he understand how necessary it is that such people take up benefits and the minimum income guarantee?

Mr. Darling

My hon. Friend is quite right. It is frequently overlooked in discussions of pensions that many people—more than half a million—receive no basic pension because they do not have the required contributions. On top of that, some of the 2.7 million married women have full contributions, but many do not. The point of the minimum income guarantee is to address the problem that we inherited. Far too many pensioners—nearly 1 million single pensioners and 1 million pensioner couples—did not receive enough money to make ends meet. The minimum income guarantee is important to them, and some pensioners will be £16 a week better off because of it. During the final three days of last week, following the announcement of the minimum income guarantee freephone number, more than 11,500 pensioners called to ask for help.

Mr. Julian Brazier (Canterbury)

What message does the Secretary of State believe that he is sending to the next generation of pensioners—those people on modest incomes who are scrimping and saving for their retirement? The minimum income guarantee will be available to those who, for whatever reason, do not provide for themselves, but those who do provide for themselves, and achieve small pensions or savings, will find that they have no advantage.

Mr. Darling

I can say two things to such pensioners. First, my right hon. Friend the Chancellor has announced a doubling of capital limits that enable people to qualify for the minimum income guarantee, about which the hon. Gentleman has asked many questions. The capital limits were last raised in 1988—nothing was done about them during the last 10 years of the previous Government. We have doubled the limits, which will help.

Secondly, the pensioner credit, on which we shall consult in a few months, is designed to help pensioners who have not only a small amount of capital, but a modest occupational pension. We are determined to make sure that people who save and build up a pension are rewarded for their thrift, and not, as in the past, penalised for it.

Mr. Tony Benn (Chesterfield)

Does the Minister recall that the previous Labour Government linked pensions to earnings on the basis that the wealth we enjoyed had been built up by people who had retired? Does he recall that the Conservative Government abolished that link, costing pensioners more than £20 a week? Is he aware that millions of pensioners are frustrated, angry and—some of them—bitter that our moral obligation to them has not been met. Means-tested benefits are not the same as benefits as of right.

Mr. Darling

May I take this opportunity to wish my right hon. Friend the Member for Chesterfield (Mr. Benn) many happy returns of the day? He will look forward to receiving his free television licence in November.

I remember the previous Labour Government, although I was not in the House at the time. It is worth recalling that that Government increased pensions by the better of prices or earnings because inflation in the 1970s sometimes rose by 25 per cent. a year. In fact, the real-terms increase received by pensioners was negligible because of high inflation rates, which my right hon. Friend no doubt remembers well.

If my right hon. Friend considers what has happened over the past 25 years, he will see, in the pensioner income paper that I published last week, that we inherited a situation in which the incomes of better-off pensioners have gone up by 80 per cent. while the poorest pensioners have had increases of only 30 per cent. In the interests of fairness and equity, I should have thought that he would support the Government in doing the right thing by the oldest and poorer pensioners, who have benefited by as much as £16 a week that they would not have had but for this Government.

Of course, we are helping all pensioners—to the tune of about £3 a week this year, and £5 a week for those aged over 75—but it must be right, given what has happened over the past 25 years, to ensure that we help those who lost out so badly during the Tory years.

Mrs. Jacqui Lait (Beckenham)

Does the right hon. Gentleman agree that divorced women form one of the groups of women who could fall into poverty? What has happened to the regulations on pension sharing on divorce—all 122 pages of them—which were due to be laid by 30 March? We were promised that they would be passed by Easter, but so far nothing has happened. Does the right hon. Gentleman not agree that he needs to get on with that, so that that group of women are lifted out of poverty as soon as possible?

Mr. Darling

I would have more sympathy with the hon. Lady if her party had not opposed pension sharing on divorce when it was in government.

Mr. David Willetts (Havant)

indicated dissent.

Mr. Darling

Well, the hon. Lady did, for the sake of the record. However, I can tell her that the regulations in relation to pension sharing and divorce will come into force in December of this year, as we promised.