§ 4. Mr. Tony Worthington (Clydebank and Milngavie)What calculation he has made of the impact of the Budget on pensioners in Scotland. [118129]
§ The Secretary of State for Scotland (Dr. John Reid)Measures taken so far this Parliament mean that pensioner households will be on average £400 a year better off.
§ Mr. WorthingtonI very much welcome all the measures that have been taken, which include free television licences for the over 75s, and the heating allowance. However, one of the major steps forward attracted the least comment. That was the proposal for a consultation paper on granting tax credits for those pensioners who have been left out so far—the ones who have worked all their lives and have small occupational pensions. Does my right hon. Friend welcome that move 814 by the Chancellor, which ensures that those people who have served this country well will be taken care of in the future?
§ Dr. ReidYes, I welcome that very much. As my hon. Friend points out, the most recent Budget builds step by step on what we have done for pensioners. We have increased the fuel allowance and extended the capital allowance threshold beyond which pensioners with small savings lose benefit, but we have also pledged to look at the group of pensioners who fall into the category that my hon. Friend described. They are the ones who have a little but lose a lot because they are just above the minimum income threshold for the loss of benefits.
That group of people is very important to the Government. In allocating benefits to pensioners, we have tried to make sure that we have paid adequate attention to all pensioners. The poorest have the guaranteed minimum income, and the oldest have the free television licences, but now we want to help those who have a little but who lose a lot from the benefits system as it is constructed at present.
§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)Will the Secretary of State explain how the proposed tax credit for pensioners will work?
§ Mr. David Marshall (Glasgow, Shettleston)My right hon. Friend will be aware that Glasgow contains many of the poorest constituencies in Scotland, but is he also aware that about 100,000 pensioners in the city will benefit to the tune of around £10 million from winter fuel payments alone? Will he consider that measure—and all the others introduced by this Labour Government to benefit pensioners—and contrast and compare it with all the hardship and misery caused to pensioner by the Tories when they were in power?
§ Dr. ReidYes, indeed. I am sure that I speak for all my colleagues when I say that senior citizens who have contributed so much to creating the wealth of this country should share in a reasonable proportion of that wealth in their old age. That is why the Government restored the free eye tests, which were so disgracefully abolished by the previous Government. It is why we introduced the guaranteed minimum pension for the poorest pensioners, the free television licence for the oldest ones, as well as providing a number of other benefits, including, of course, the £150 fuel allowance for every pensioner household every year. That is particularly beneficial, because giving that benefit in that form means that it is not taxed as it would be if it were paid out weekly. It also means that those in receipt of it are not penalised by losing benefits, as they might be in some cases if it was paid out weekly. That is another step in the Budget towards giving pensioners what they deserve and are due.
§ Mr. Dominic Grieve (Beaconsfield)What about the abolition of the age-related married couples allowance, which takes £500 off the income of people coming into pensionable age? How does that square with the Secretary of State's comments? Will he also comment on the fact that £2 billion has been taken from pension funds, thereby 815 driving a coach and horses through the promises that pensioners would be encouraged to save to supplement their state pension?
§ Dr. ReidAs I pointed out earlier, we have to consider all the measures that have been passed during this Parliament. I have not mentioned, for instance, the savings that pensioners will make because of the introduction of the new low 10p starting rate of income tax.
A range of other measures have been introduced, one of which the hon. Gentleman has mentioned. However, on balance, as a result of the measures taken in this Parliament pensioners are, per household, an average of £400 better off. I do not claim for a minute that that is enough; I do not claim that we have done everything that we could or would wish to do for pensioners. We have done a lot, but we are well aware that we have a lot more to do.
Step by step, under this Government, pensioners, including the poorest and oldest, will continue to become better off. That is why we are now looking at those just above the income threshold that loses them benefits—those who have a little but lose a lot. We will continue to make sure that pensioners get what they deserve under this Government.