HC Deb 19 June 2000 vol 352 cc1-6
1. Ms Oona King (Bethnal Green and Bow)

What plans he has to help those pensioners with modest occupational pension schemes who do not benefit from the minimum income guarantee. [124925]

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

We want to reward rather than penalise pensioners who worked hard to provide for their own retirement. As we have said, we will consult later in the year on proposals for a pensioner credit that will reward those who have built up modest pensions or other savings.

Ms King

I am sure that I speak for all my hon. Friends in welcoming the consultation on the pensioner credit.

Given that the proposed legislation is two, three or even four years away, will my right hon. Friend consider an interim measure to help the pensioners who have worked so hard, many of whom live in east London? Will he consider an increase of more than the rate of inflation in the basic state pension, just during the years preceding the introduction of the credit?

Mr. Darling

As my hon. Friend will know, the Government are spending more on supporting pensioner incomes than they would have if they had simply reinstated the earnings-linked pension. The question is where the money is best spent, and more than half the increase is going to the poorest pensioners. We are helping all pensioners through the winter fuel payment and free television licences, both of which the Conservatives have now said they will scrap. We are helping the poorest pensioners through the minimum income guarantee and other measures, because we believe it is right to deal with the pensioner poverty that we inherited from the last Conservative Government.

Mr. Julian Brazier (Canterbury)

I welcome the review, but does not the minimum income guarantee represent, in the long run, the equivalent of a funded pension of around £100,000? Is it not also true that while the deliberation is going on, and while the three or four years mentioned by the hon. Member for Bethnal Green and Bow (Ms King) are ticking away, the jaws of the vice will open progressively, as the minimum income guarantee is linked to earnings while the state pension is linked to prices?

Mr. Darling

The hon. Gentleman should be aware of the reason for the introduction of the minimum income guarantee. Whereas the top 20 per cent. of pensioner incomes had risen by 80 per cent. in the past 20 years, the bottom 20 per cent. had risen by just over 30 per cent. It was therefore necessary to do far more for those on low incomes than had ever been done in the past: we were determined to deal with the problem of pensioner poverty that we had inherited.

As for the future, the hon. Gentleman should also be aware that the introduction of the state second pension—the legislation is currently in the other place—will mean that many on low incomes who in the past would have retired on income support will be able to accrue a better pension over their lifetimes. We are determined to ensure that everyone can retire on a decent pension after a lifetime's work. That certainly was not the result of the policies that the last Tory Government left us.

Mr. Bob Blizzard (Waveney)

Government policy is to maintain the value of the basic pension, and then to target extra resources on those who need them most by means of the minimum income guarantee, while at the same time helping all pensioners through winter payments. Is not the problem, in terms of pensioners' reception of that policy, the rogue figure that appeared last September—a 1.1 per cent. inflation rate that was not the real inflation rate? Is not the answer to ensure that next year the increase in the basic pension that the Government give pensioners is based on a realistic inflation rate, and makes up for the shortfall of the past year? Anything on top of that would of course be well received, but if we did that we would be providing real benefits for pensioners and not—as the Conservatives wish to do—giving with one hand and taking with the other by providing only 42p, not even 75p.

Mr. Darling

As my hon. Friend knows, at the last election all the major political parties stood on the basis of a manifesto commitment to increase the pension in line with prices, and that is what we have done. All three parties—even the Liberals, although I note that their spokesman sadly cannot be with us today—stood on the same platform.

We wanted to do more than that, however. That is why we have increased the amount that we spend on pensions by £6.5 billion. As my hon. Friend says, half of that has gone to the poorest pensioners, who lost out. If we had not taken such action, we would simply have perpetuated the circumstances that existed during the Tory years, when a growing number of pensioners were living in poverty.

As for the rogue figure, my hon. Friend is right: the only rogue figure is the extra 42p that the Conservatives promise that they would give pensioners if they were ever returned to power.

Mr. David Willetts (Havant)

The only rogue figure is the Secretary of State. May I ask him a straight question? Will he confirm that he is spending a lower proportion of our national income on pensioners than we were spending in our last full year in office? How does he reconcile that with his manifesto pledge that

Mr. Darling

As the hon. Gentleman knows, national income is rising, thanks to the prudent economic policies of this Government. However, I thank him for the compliment.

As for our manifesto commitment, we said that we wanted pensioners to share fairly in the rising prosperity. We are achieving that: that is why we are spending £6.5 billion more. My guess is that, come the end of this Parliament, pensioners and others will be able to judge which party is fair and just to pensioners. They will be in no doubt that it is the Labour party, and they will remember exactly what the Tories did during their years in government. The Tories did absolutely nothing to deal with the growing scandal of pensioner poverty.

Mr. Willetts

The Secretary of State claims that pensioners are doing badly because—he believes—the economy is doing well. No wonder the ministerial team has such a rough time whenever it tries to explain its policy to pensioners. I remind him of the reception that the Minister of State, Department of Social Security got at the Scottish pensioners convention last week. He was heckled. A section of the audience began a slow handclap. Some who asked direct questions threatened to change their votes at the next general election, a point that was loudly applauded by the rest of the gathering.

The Minister of State has obviously been trying to copy the Prime Minister. Instead of trying to do that, why does he not learn something from us? Why does he not try a better approach—the approach of his colleagues on the Back Benches? Why does he not consolidate all the gimmicks and more into a substantial increase in the basic pension, and give pensioners the respect and dignity that they deserve?

Mr. Darling

As for Conservative policy, I can do no better than remind the House what the shadow Chancellor said about it. He said that it was a one-off. He said that it was money that was already being spent. He added: We are making quite a limited announcement. No wonder he said that: the House of Commons Library, which the hon. Gentleman is always praying in aid of his pensions announcement, has confirmed that, as a result of what the Tories are promising, the best that a pensioner could hope for is 42p more before tax, without taking into account that 2 million poorest pensioners would lose out because of the way in which the benefit system operated.

To pay for that policy, the hon. Gentleman has also pledged to scrap the new deal for lone parents—which has already seen 50,000 lone parents get into work—as well as to take £90 million out of the social fund, which goes to some of the poorest people in society and for which the Conservatives have no substitute.

We are spending £6.5 billion more on pensioner incomes. As a result of the policies that we have introduced, some of the poorest, least well-off pensioners will be £280 a year better off than they would otherwise have been. Our policy has been to tackle first the pensioner poverty that we inherited. The next stage is to introduce the pensioner credit, which is designed to reward pensioners who have saved a little, or perhaps have a modest occupational pension in the bank. That never happened during the 18 years that the Tories were in power.

2. Mr. Colin Burgon (Elmet)

What progress the Government are making in tackling poverty among pensioners. [124926]

The Minister of State, Department of Social Security (Mr. Jeff Rooker)

We are committed to tackling pensioner poverty. During the current Parliament, more than half of the £6.5 billion that my right hon. Friend the Secretary of State for Social Security has said will be spent will be deliberately targeted at the oldest and poorest pensioners. We make no apology for that.

Mr. Burgon

I thank the Minister for that reply. Along with millions of other people, I welcome the Government's commitment to tackling poverty among pensioners, especially through the introduction of the minimum income guarantee. I further welcome the fact that the minimum income guarantee will be uprated in line with—I had better get the word right—earnings this year and next, but, as one of those Members who has organised a series of take-up campaigns, may I point out that some pensioners find the form-filling process complicated? How can we simplify that and ensure that pensioners get what they are entitled to?

Mr. Rooker

The overall aim of the minimum income guarantee is to get more money to the poorest pensioners fast; that is what it is about. We know from research that there are people who are not claiming it for various reasons. We have modified the form. It is possible—minimum income guarantee uptake is the subject of a later question—to make the claim over the telephone. When the form comes to be signed and dated, perhaps only two or three pages will have to be filled in, rather than the 40 pages of the standard income support form, but I welcome my hon. Friend's support for the minimum income guarantee.

Mr. Paul Burstow (Sutton and Cheam)

Does the Minister appreciate that many pensioners are also carers caring for their retired husbands or wives, or for disabled children, and that, as a result of being over 65, they do not receive invalid care allowance? As a result, as the Carers National Association demonstrated ably only last week, they are living on the breadline in poverty. What will the Government do to extend the allowance and to create a carers benefit that recognises and values the work of carers, particularly elderly carers, who form the vast majority of carers? When will the Government act—this side of an election, or some time never?

Mr. Rooker

As the hon. Gentleman will know, that matter has been the subject of debates on the Child Support, Pensions and Social Security Bill that is currently being considered in the other place. He has asked about invalid care allowance, but he would have been well advised to take this opportunity to remind pensioners that they can still claim attendance allowance, for which there is no age cut-off and there is a high non-take-up rate. We reckon that about only 40 per cent. of pensioners who are eligible for attendance allowance claim it. Although I realise that that benefit goes to the person who needs care rather than to the person providing it, nevertheless, the benefit is a means of getting more cash to those families at a crucial time.

Mr. Barry Jones (Alyn and Deeside)

Will my right hon. Friend list some of the things that the Government have done since 1997 for pensioners? What prospects might there be, in the comprehensive spending review, for a substantial increase in the basic old-age pension?

Mr. Rooker

The answer to the last part of my right hon. Friend's question will have to wait until the autumn, when decisions are taken after the review is completed. We are required by law to conduct such a review, taking into account matters such as an increase in the inflation rate. Nevertheless, we are quite proud to recite the catalogue of actions that we have taken, including the provision of free eye tests and cutting VAT on fuel. Those actions cannot be dismissed out of hand. Furthermore, before 1997, winter fuel payments—which, from this year, are worth £3 per week for each pensioner household—were not even available.

As the House will also know, because of recently passed legislation, free television licences will be available for over-75s. It is a tax-free benefit that, in cash terms, is worth £2 weekly for the over-75s.

Mrs. Jacqui Lait (Beckenham)

On my way to the House today, I bought petrol at 85.9p per litre. Could the right hon. Gentleman tell us why a pensioner is worth less than a litre of petrol?

Mr. Rooker

Well, I fill up my own tank from time to time. The hon. Lady knows that it is not true to say that the basic state pension increase was the only benefit increase provided to pensioners. In April, the poorest pensioners received an increase of not 75p, but £3.45, and almost 2 million pensioners speedily received that extra money. Such a facile question is beneath contempt.

Mr. David Winnick (Walsall, North)

Would it not be interesting to find out how often Labour Members, in the 18 years of the previous Government, repeatedly demanded that help be given to pensioners to deal with harsh winters? On every single occasion that we did so, Tory Ministers' response was, "No help other than the state pension is to be given." Why did the Tories do their best to ensure that pensioners were denied free television licences and even vote down legislation to that effect in January 1987?

Mr. Rooker

Basically, as my hon. Friend said, the Tories did not care.