HC Deb 06 April 2000 vol 347 cc1135-8
2. Ms Rosie Winterton (Doncaster, Central)

What estimate he has made of the impact which changes in savings limits will have on pensioner incomes. [116601]

12. Ms Linda Perham (Ilford, North)

If he will make a statement on his plans to increase the incomes of the poorest pensioners. [116614]

13 Ms Sandra Osborne (Ayr)

How many pensioners will benefit from the increases in the minimum income guarantee in Scotland. [116615]

The Chancellor of the Exchequer (Mr. Gordon Brown)

An estimated 500,000 pensioners will gain an average of £5.05 a week as a direct result of the changes to the savings limit that I announced in the Budget. The minimum income guarantee will increase next week to at least £78.45 for the youngest single pensioners and £131.05 for pensioner couples aged 80 and above.

The minimum income guarantee benefits approximately 1.5 million pensioners, of whom 165,000 live in Scotland. In each area of the country, our take-up campaign is designed to ensure that more pensioners can benefit from the measures that are due to them.

Ms Winterton

Is my right hon. Friend aware that his changes have been widely welcomed in Yorkshire and Humberside? Thousands of pensioners will benefit from them. That is in stark contrast with the treatment of pensioners when the Tory party was in power. Will he assure me that the longer-term review that he announced will have at its heart a commitment to ensuring that pensioners who have saved a little and perhaps have a small income will be rewarded, not penalised?

Mr. Brown

I am grateful for that question, because we will publish a discussion document on a new pensioner credit to help exactly that group of pensioners, whose savings and modest occupational pensions should not penalise them by preventing them from receiving benefits that are due to them. Again, I believed that all parties would support that.

The measures that we introduced in the Budget and in previous Budgets, such as the winter fuel allowance, which will increase to £150, free colour television licences for 3 million pensioners, which will be introduced in November for those over 75, and the minium income guarantee, which relieves poverty, mean that 1 million pensioners are approximately £1,000 better off than they would have been under a Conservative Government. We are keeping our promises to pensioners, and we shall do more.

People understand from the events of the past week, especially from the statements of the Opposition social security spokesman, that the Conservative party will not even guarantee to keep the winter fuel allowance for pensioners. So much for talk of a caring attitude. The shadow Chancellor was right; the Conservatives are guilty of selfish attitudes yesterday, today and tomorrow.

Ms Perham

I welcome the increases in the minimum income guarantee, but does the Chancellor accept that some people will not claim it? He has announced many measures that have already been introduced for pensioners, but many pensioners in my constituency complain about the small increase in the basic pension. Does my right hon. Friend have anything more to say to them?

Mr. Brown

Yes, we have followed the rules of inflation that the previous Government pursued in calculating the basic pension. From April 2001, we expect the basic pension to increase by £2 or more for single people and by £3 or more for couples, based on our forecast for inflation in September.

At the same time, we unfroze the income limits for the pensioners about whom my hon. Friend is especially worried. Those limits deprived 500,000 pensioners of the benefits of the minimum income guarantee. We raised the income limit from £3,000 to £6,000 and raised the total ceiling from £8,000 to £12,000. Those ceilings had been in play since 1988 and 1990. Nothing had been done under the previous Government. We have taken action to help those pensioners whose savings should not debar them from getting the benefits they are due.

Ms Osborne

I also welcome the fact that 165,000 Scottish pensioners will benefit from the minimum income guarantee, but I know that my right hon. Friend is well aware of the concerns among pensioners in my constituency of Ayr. In the Budget, I was pleased to hear about the review and the fact that the needs of pensioners with modest incomes who are above minimum income guarantee levels will also be examined. What opportunities will there be for pensioners in my constituency to have an input to the discussion document?

Mr. Brown

I hope that the pensioners in my hon. Friend's constituency and in all constituencies in this country will take up the benefits that they are due as a result of the take-up campaign launched by my right hon. Friend the Secretary of State for Social Security. We have raised the personal allowances for pensioners higher than the rates of inflation for those who pay tax, and 60 per cent. of pensioners no longer pay, or do not pay, tax. At the same time, we are determined to take more pensioners out of poverty and I believe that the combination of the minimum income guarantee, the winter allowance and the discussion that we are having about the pensioners credit is the right way forward. It is a scandal that more than 1 million pensioners were in poverty when we came to power. We are taking action.

Mr. Christopher Chope (Christchurch)

Does the Chancellor regret having misled millions of pensioners on Budget day when he—

Madam Speaker

Order. Will the hon. Gentleman rephrase that sentence? I do not think that Chancellors mislead. We do not use that word.

Mr. Chope

Perhaps the Chancellor unintentionally misled. I shall refer to the text if necessary, but on Budget day he said that the changes in the savings limits for pensioners would take effect from next April. On Budget day, next April was April 2000. We now find that those changes will not take place until April 2001. As a result of the misuse of the English language, many millions of pensioners were misled.

Mr. Brown

First, 500,000 pensioners benefit from that measure. Secondly, they were not misled at all. All the documentation made the position absolutely clear, as did my speech. Thirdly, if the Conservatives are to resort to those tactics, they have very little to say to pensioners. The hon. Gentleman should congratulate us because 11,000 pensioners in his constituency will get free colour television licences as a result of what we have done, which the Conservatives would never have done.

Mr. Matthew Taylor (Truro and St. Austell)

As pensioners collect their measly 75p increase this week, might they not wonder exactly what the Chancellor and the Prime Minister meant when they wrote in the Labour manifesto that pensioners as a whole would share in the growing wealth of the economy? According to the Government's own figures in a parliamentary question this week, pensioners will get a lower share of the national economy this year than in the last year under the Conservatives.

Mr. Brown

I do not think that anybody will take lectures from the Liberal party. It never supported the winter fuel allowance; we introduced it. It never supported the minimum income guarantee; we introduced it. It never supported raising the savings limits; we have done that. The Liberals quote a House of Commons answer by my right hon. Friend the Minister of State, Department of Social Security, but it does not include free eye tests, the cut in VAT on fuel, what we have done on transport and what we have done to deal with the regulation of the utilities and to keep fuel bills down. The truth is that, by the end of this Parliament, pensioners will be getting £800 million more a year than they would have got even if we had raised the pension in line with earnings. The Liberal party said that the pension should be raised in line with inflation. It is being absolutely hypocritical.

Madam Speaker

Order. We use "hypocritical" no more than we use "misled" in the House.[Interruption.] Order. I am sure that the Chancellor will oblige the House by withdrawing "hypocritical".

Mr. Brown

I withdraw what I said. The Liberals have been unintentionally hypocritical.

Mr. David Tredinnick (Bosworth)

Does the right hon. Gentleman not think that, when referring to all the measures that he has taken to help pensioners, he should also refer to the £5 billion raid on pension funds? Is it not the attack on pension funds that has done so much damage to the livelihood of pensioners? The right hon. Gentleman should not forget that.

Mr. Brown

The hon. Gentleman should be congratulating us on what we have done for the economy. The valuation of the assets held by pension funds has risen by about 60 or 70 per cent. since we came to power. That is no thanks to the Conservatives, who would have brought us back to boom and bust.