HC Deb 25 June 2001 vol 370 cc376-8
11. Mr. John Bercow (Buckingham)

What proportion of pensioners he expects to be on means-tested benefits in 2005. [453]

The Secretary of State for Work and Pensions (Mr. Alistair Darling)

Our objective is to end pensioner poverty and reward thrift, and our policies will continue to do that. By 2005, as a result of our policies, more than half Britain's pensioners will have gained.

Mr. Bercow

I congratulate the Secretary of State on his appointment and, indeed, on his new title. Given that the Chancellor of the Exchequer told the 1993 Labour party conference that he wanted to see an end to the means test for our elderly people, but that the proportion of pensioners on means-tested benefits is set to increase from 39 per cent, in 1997 to 57 per cent, in two years, why does the Secretary of State not accept that the Government have broken their promise and that, far from being the sworn enemy of dependency, they are in fact its closest friend?

Mr. Darling

At the last election, and at the 1997 general election, we made a clear promise to do two things. First, we wanted to help all pensioners share in the country's national wealth. Secondly, and critically, we wanted to begin to tackle pensioner poverty which had increased in the previous years. The minimum income guarantee is now benefiting more than 2 million pensioners, 100,000 of whom took it up because of the campaign that we ran earlier this year. We now need to move forward and ensure that the millions of pensioners who have modest savings or a small occupational pension gain from their thrift.

The position of the hon. Gentleman—and, I understand, the rest of the Conservative party, at least at the moment—is to oppose the pension credit. The Conservatives should turn their minds for one moment not to the election of two weeks ago, but to the election that they will be fighting in four or five years. If they oppose what we are doing, they will have to explain to 5 million pensioners why they are going to cut their incomes as a result of what their policy now appears to be.

Lynne Jones (Birmingham, Selly Oak)

Pensioners in my constituency are very pleased at the increase in income that they have received recently, but there is growing concern about the disparity in the value of means-tested benefit as compared with the basic state pension. Last year's Labour party conference was very clear about what should be done about that, passing the resolution to restore the link between pensions and earnings. When will the Government implement Labour party policy?

Mr. Darling

As my hon. Friend will know, I studied that resolution with great interest and it did not say that at all. However, I will give her—at least at this stage of the Parliament—that it was open to a number of interpretations. The position at the general election, which my hon. Friend and I have just finished fighting, was clear. We want to introduce the pension credit because a universal, across-the-board increase would not do anything to address the pensioner inequality that we inherited.

The incomes of the pensioners with the highest incomes went up by some 80 per cent, in the past 20 years. Those pensioners at the other end of the income scale saw their incomes increase by only 30 per cent. To me, it does not seem right in terms of social justice to perpetuate that inequality, so I must disagree with my hon. Friend on that point. The majority of pensioners in this country want two things: first, that pensioner poverty is ended, which is why we introduced the minimum income guarantee, and secondly, that those pensioners who have saved a little bit of money should be rewarded for their thrift. People who live on the basic state pension alone will automatically qualify for the minimum income guarantee. Most people in this country have two pensions their basic state pension and an occupational one. We want to increase the level of the occupational pension.

Mr. Paul Burstow (Sutton and Cheam)

The Secretary of State has acknowledged that people will not receive pension credit if they are in receipt of housing benefit, and said that the Government will look at that. Will he confirm also that those who are in long-term care will not receive the pension credit and, as a result, will be penalised for their thrift? Should not the Government consider the pensions of those in long term care?

Mr. Darling

The hon. Gentleman will know that, in the last Parliament, we introduced measures to benefit people in long-term care with regard to their nursing care. I appreciate that he wants us to do more and, no doubt, the penny on income tax will pay for that, as well as for everything else that the Liberals promised at the last election. We will propose the exact parameters of the pension credit to the House in due course. I did not say that somebody receiving pension credit would not get housing benefit; the hon. Gentleman misheard me if that is what he thinks I said. However, our overall pensions policy is to make sure that we end pensioner poverty, reward thrift, take more pensioners out of tax and reduce their tax bills and allocate additional resources to help people in long-term care. That is the right thing to do. The difference between our two parties is that we promise what we can deliver because we know we have to deliver. Also, we can actually pay for our policies, something the Liberal Democrats could never do.