Minimum Income Guarantee (Hansard, 17 July 2000)

§ 5. Mr. Huw Edwards (Monmouth)
If he will make a statement about the take-up campaign for the minimum income guarantee for pensioners. [129324]

§ The Minister of State, Department of Social Security (Mr. Jeff Rooker)
We have announced details of the first Government take-up campaign to identify pensioners most likely to be entitled to the minimum income guarantee, and to encourage them to claim it. As the House knows, the campaign started on 30 May with intense activity on several fronts, including a fairly long television advertising campaign in three separate parts over the summer. Furthermore, the Government will be writing to 2 million identified pensioners who may have an entitlement, based on the information we already have. Pensioners can also claim without leaving their home by calling the new tele-claim centre's freephone service.

§ Mr. Edwards
Will my right hon. Friend join me in thanking Thora Hird for her contribution to the Government's take-up campaign for the minimum income guarantee? The guarantee will increase pensions in line with average earnings and those over 75 have already seen it increase their incomes by £16 a week. Will he assure me that the pensioners of this country need to be reminded that that this is an entitlement and not a gimmick, which is what the Conservative party has said, and that it would be abolished if there were ever a Tory Government again?

§ Mr. Rooker
My hon. Friend is right to pay tribute to those, such as Thora Hird, who have assisted the campaign. In addition, Nerys Hughes has contributed to a Welsh version of the campaign and Peter Sallis has helped as well. The campaigns are having an impact, as my hon. Friend has just said. There have been 133, 000 responses to date but, as I told the Select Committee on Social Security last week, it is too early to estimate the net effect and say how many people have gained from the minimum income guarantee. We will not have a figure for that until the end of this month. So far, we have sent out 417, 000 letters, which is not a bad achievement for this stage of the campaign.

§ Mr. John Wilkinson (Ruislip-Northwood)
Should not the Government encourage people to make provision for their old age? How will the minimum income guarantee assist them to do that? Is it not the case that those on low incomes will see their savings set against the minimum income guarantee? The Government are therefore, instituting an active disincentive. Should they not be making quite sure that all those in retirement who have paid the stamp throughout their working lives get a decent state pension on which they can live?

§ Mr. Rooker
It beggars belief to imagine where the hon. Gentleman has been for the last few years. The guarantee applies to today's poorer pensioners who are in that position because of the legacy that we inherited, in which the gap between the most well-off and the poorest pensioners had gone from a ratio of 2.5:1 to 3.5:1 in the 18 years that he sat sucking up to the Government whom he supported.

§ Mr. Paul Flynn (Newport, West)
Is it not true that today's pensioners have made provision for their old age by paying into the national insurance scheme for the last 50 years? The cost of the contributions that they paid in increased at the high rate of inflation, but the benefits that are paid out come to them at the lowest rate of inflation. We should restore the insurance principle.
11 The Government are to be congratulated on the take-up scheme, which is much better than any that has gone before. However, would it not be fair if the poorest pensioners, who were promised that the take-up scheme would start more than 15 months ago, had back pay for that period? The Under-Secretary of State for Social Security, my hon. Friend the Member for City of York (Mr. Bayley), said that it would be perfectly possible to do that.

§ Mr. Rooker
As my hon. Friend knows, we can pay the benefit only from the day on which it is claimed, and everyone knows that it is available to be claimed. We have gone out in a proactive way—and not just in television and newspaper advertising—to trawl the Department's records and we have located 2 million pensioners to whom we shall write individually.
As my hon. Friend knows, today's poorer pensioners are in that position because, during their working lives, they were not able to contribute fully to the state earnings-related pension scheme, were not allowed to have an occupational pension scheme and were not among the group that would have been targeted by the pensions industry for the tins-selling of personal pensions. Today's poorer pensioners are there simply because the policy in the past was not sufficient to enable them to accrue a pension that would give them a decent standard of living. That is why we have a raft of other policies for tomorrow's pensioners, so that they do not find themselves in the same position as today's poorer pensioners.

§ Mrs. Jacqui Lait (Beckenham)
The Minister has given us a raft of statistics about how many forms have been sent out, but will he tell us how many have been sent back and whether anyone has been paid under the minimum income guarantee since the campaign started? Does he agree with Help the Aged in Scotland that one of the reasons why pensioners are put off claiming the minimum income guarantee is that the benefits are so complex? Would it not be better for the Government to give pensioners a decent increase to the basic state pension, as we have already suggested?

§ Mr. Rooker
I may get done for repetition—and I bear it in mind that this is probably the last time that I shall appear at the Dispatch Box with you, Madam Speaker, in the Chair. I said that we have had 133, 000 responses since 30 May and I also said, as I told the Select Committee last week, that it was too early to give the House a figure for how many people had been successful. We will not know that figure until later in the month.
The hon. Lady was a member of the Government who introduced income support, so it would be much better if she did not denigrate it. We are using modern technology in the system so that we do not have to send 40-page forms for pensioners to fill in, and a two or three-page form can be produced electronically and filled in over the telephone, so people do not have to go to the benefit office. We are trying to do that proactively; that is the difference between us and the Conservatives, who ignored pensioners.

§ Mr. John Cryer (Hornchurch)
I accept what my right hon. Friend says about the minimum income guarantee. Is he aware that if the prices link alone had been in place 12 since 1948, the state pension would now be worth only £27 a week? Are we prepared to see the state pension, the basic building block of pensioner incomes, wither on the vine? Or will he rescue it by restoring the earnings link? On that subject, will my right hon. Friend remind the House who cut the earnings link in 1981? Was it the Tories, and if so, does not their pathetic posturing on pensioner poverty start to ring a bit hollow?

§ Mr. Rooker
My hon. Friend is right. Hon. Members on both sides of the House accept that had the basic state retirement pension been linked to prices since its introduction, it would be nothing like as much it is today—indeed, it would be far less. If we used the pensioner prices index, the increase would be less, so we do not do that. We must look at the average of total pensioner incomes. Taking the basic state retirement pension in isolation is not a true and fair reflection of pensioner incomes, so we must look at things in the round. That is why a previous Labour Government introduced the state earnings-related pension scheme, which has allowed people on average earnings who have worked for 20-odd years since its introduction without a break in service to retire today with a pension income double the basic state pension. That is the legacy of the previous Labour Government.