§ The Secretary of State for Work and Pensions (Mr. Alistair Darling)
More than 400 responses were received to the pension credit consultation paper. As indicated in the Gracious Speech, we intend to introduce legislation in this Session of Parliament.
§ Mr. Pike
I thank my right hon. Friend for that answer. Does he recognise that, although most pensioners feel that the Government have done an excellent job in the past four years—compared with the previous 18 years under the Tories—pensioners who have small savings or a second pension sometimes end up worse off than those on the minimum income guarantee? Will he assure those people that that is exactly the problem that the Government intend to address with the pension credit, and that the consultation process will ensure that we get it right before we introduce the credit in 2003?
§ Mr. Darling
My hon. Friend is right. There cannot have been a candidate in the recent general election campaign who did not meet a pensioner who had modest savings or a modest occupational pension and who asked, "What's in it for me?" The answer is the pension credit. 372 We believe that if pensioners have modest savings in the bank, they should not be penalised for that. We also believe that if someone has a small occupational pension, that should be added to rather than resulting in money being taken away.
The pension credit will do two things. First, it will provide a basic guarantee of £100 a week. My hon. Friend may be interested to know that, as a result of the recent take-up campaign, more than 100,000 people have now gained extra money through the minimum income guarantee. Secondly—critically—the pension credit will ensure that people receive something for their savings, and that their years of thrift and sacrifice are rewarded rather than their being penalised under the present system.
§ Mrs. Jacqui Lait (Beckenham)
I, too, congratulate the Secretary of State on his new responsibilities.
Can the right hon. Gentleman give us some idea of his estimate of the number of people who are eligible for pension credit? What solution does he propose to the difficulty relating to the interaction of housing benefit, council tax benefit and pension credit?
§ Mr. Darling
I thank the hon. Lady for her congratulations. Our cup is overflowing today, and we shall make the most of it. I do not suppose that it will last, although we look forward to congratulating one or two Conservative Members in a few months' time, depending on what happens after the leadership campaign.
The pension credit consultation paper made it clear that we expect just over 5 million pensioners to gain from the proposals. That gives some indication of the large number of retired people who have modest savings, and a small occupational pension, and who I believe lost out for years when they ought to have received a reward for their thrift.
As the hon. Lady will know, the Government are determined to change the interaction of housing benefit not just with pension credit but with other aspects of the tax system. We are improving the administration of housing benefit, but we also want to introduce more fundamental struc tural changes to it. That will take time: the housing benefit system is extremely complex, and the changes that are needed are far-reaching. Pension credit, however, is an extremely important first step, because it means that for the first time it will pay to save. All those who have been in a quandary about whether they should save for their retirement will now know that, if they qualify for the credit, they will be better off for every pound that they save. We are also making changes to the tax system to help pensioners who pay tax.