§ 2. Mr. Nigel Waterson (Eastbourne)If he will make a statement on the Government's policies towards pensioners. [107187]
§ The Secretary of State for Social Security (Mr. Alistair Darling)Our objective is to make sure that retirement is a time to look forward to. We are doing more to help today's pensioners. We are reforming pension provision for the future to make sure that people retire with decent pensions. As a result of our policies, older and poorer pensioners are £500 a year better off than they would have been but for the change of Government.
§ Mr. WatersonWhy should pensioners look forward to retirement as a result of the Government's policies? The Government have ripped off £5 billion from pension funds and abolished the married couples allowance, tax relief on private medical care, widows bereavement benefit and many other benefits affecting older people. On top of that, they are proposing to introduce a system in which there will be two classes of pensioner. There will be a disincentive to save at one end of the scale, and real unfairness for those who have saved during their working lives at the other.
§ Mr. DarlingThe hon. Gentleman will recall that we now have the lowest rates of corporation tax that this country has seen, allowing companies to decide whether they want to reinvest their money or pay it out in dividends. He will no doubt have seen reports suggesting that many pension funds are beginning to benefit not just from our advance corporation tax changes, but because of the benign economic conditions that have been a feature of this Government.
The hon. Gentleman mentioned the bereavement benefit changes. The status quo could not be sustained, because it was discriminatory: a man who lost his wife 4 and was left with young children to bring up was not being helped. We have now arranged for help to go to either men or women when they lose their spouses.
I think that the hon. Gentleman's key objection is to the minimum income guarantee. I see that he is nodding vigorously. One and a half million pensioners are now getting more help, thanks to the Government: people who were not able to save enough of a pension during their working life, often because they were employed on very low wages or were in and out of employment.
It is clear that we believe that we should help Britain's poorest pensioners—the ones who lost out in the past 20 years—and it is equally clear that the Tories would take that money away; unless, of course, another U-turn is about to be announced at the Dispatch Box.
§ Mr. John Cryer (Hornchurch)I appreciate what my right hon. Friend says about the minimum income guarantee, but is he genuinely happy with the 75p increase in the state pension?
§ Mr. DarlingI have explained on many occasions that the Government's pensions policy is geared towards providing the most help to the poorest pensioners who lost out in the past 20 years. Over those years, the richest pensioners did very well compared with the others, whereas the poorest lost out very badly. If we gave an across-the-board increase to all pensioners, those who were better off would not notice the amount and those at the lower end of the income scale would get no increase whatever because they would lose it pound for pound in benefit.
That is why we are absolutely right to target most of our efforts on helping the poorest pensioners; but I remind my hon. Friend that the winter fuel payment, increased to £100, goes to all pensioners; free television licences, from this autumn, go to all pensioners over 75; and we have taken out of tax 200,000 pensioners who used to pay tax on their savings.
§ Mr. Steve Webb (Northavon)I agree with the Secretary of State. I agree with his statement in the House 12 months ago that pensioners are rightly angry when they save for a lifetime and then cannot get means-tested benefits. I agree with him in his statement of 12 months ago, when he said:
That reform is long overdue."—[Official Report, 28 January 1999; Vol. 324, c. 486.]Given that it was long overdue 12 months ago, why has he done absolutely nothing on capital limits since then?
§ Mr. DarlingI have explained to the hon. Gentleman on countless occasions that the Government said in the Green Paper that the capital limits needed to be considered. I am glad that he agrees with everything that I said previously, because I notice that the Liberal Democrats' manifesto says that it is their policy that the basic state pension should be increased in line with prices and that there should be extra earnings-linked help for the poorest pensioners, and that is precisely what we are doing.
§ Mr. Hilary Benn (Leeds, Central)Given what my right hon. Friend has just said about the minimum income guarantee, and rightly so, when does he expect to be in a 5 position to launch a publicity campaign to ensure that all the pensioners who are entitled to it are able to claim and receive it?
§ Mr. DarlingMy hon. Friend asks a very good question, the answer to which is very soon indeed. I shall make an announcement in the not-too-distant future setting out how we intend to ensure that those pensioners who qualify for the minimum income guarantee get it.
§ Mr. David Willetts (Havant)The trouble is that, whatever else the minimum income guarantee may be, it is not a guarantee of a minimum income to pensioners. A pensioner with savings of more than £8,000 in a year is not entitled to any help, even though her income could well be way below the supposed minimum income guarantee level. It is a matter not only of pensioners not claiming the benefits to which they are entitled, but of the old income support rules meaning that pensioners with incomes way below the minimum income guarantee level are simply not entitled to receive it. The Secretary of State should either change the name of his policy so that it is not so misleading, or change the policy to do something to help pensioners with modest savings.
§ Mr. DarlingThe hon. Gentleman's argument would have more force if he had done something about the capital limits when his party was in power, because they remained unchanged for many, many years. We have said that we will consider that, and we will. His policy is not to give more help to those receiving the minimum income guarantee but to take that guarantee away, so 1.5 million pensioners would lose money, not gain it. People should remember that when they listen to what the Conservatives have to say on pensions.