HC Deb 25 November 2002 vol 395 cc8-9
6. Mr. Jim Cunningham (Coventry, South)

What action he plans to take to assist older people living below the official poverty line. [81274]

The Secretary of State for Work and Pensions (Mr. Andrew Smith)

We have brought in the minimum income guarantee, winter fuel payments and free television licences for the over-75s, so that single pensioners are at least £18 a week better off and couples have gained by more than £27. Of the £6 billion extra that we are spending on pensioners compared with 1997, £2.5 billion is being spent on the poorest third of pensioners.

Mr. Cunningham

I am sure that my right hon. Friend would want to know that most people appreciate the fact that 650,000 pensioners in the west midlands have gained from the fuel poverty allowance. However, when he considers proposals on old-age pension increases in April, is he satisfied that when those increases are implemented, they will be a step in the direction of eliminating pensioner poverty?

Mr. Smith

Yes indeed. The increases will help us further to address pensioner poverty, and taken together with the introduction of the pension credit next October, all the measures that we have introduced mean that the average pensioner household will be £1,150 a year better off, and the poorest third of pensioner households will be £1,500 a year better off. Of course there is more to do, but that represents substantial progress in helping the poorest pensioners in our country.

Mr. James Arbuthnot (North-East Hampshire)

The Secretary of State is absolutely right that we have to fight pensioner poverty, but does he accept that the minimum income guarantee and the pension credit make it rather difficult to achieve the target to which the Minister for Pensions committed himself today, that in future pensioners should receive approximately 60 per cent. of their income from private sources?

Mr. Smith

As I just said, we can always do more. We take seriously the recommendations of the National Audit Office's excellent recent report, which pointed to the need to build on local strategies targeted on those who are not getting everything to which they are entitled; to reduce duplication in the information that we request from people; to measure non-take-up better; and to spread information about pensions and benefits as widely as possible. We are doing that by sending out 2 million copies of the pension guide and by creating the Pension Service, a dedicated service for pensioners which will provide a more sensitive and user-friendly source of information and advice.

Mr. Bill Tynan (Hamilton, South)

Does my right hon. Friend accept that, while the minimum income guarantee and the pension credit are welcome, a great number of pensioners will not receive those benefits? Despite the current take-up proposals, does he accept that further work is needed, and will he set out what measures are being taken to increase take-up?

Mr. Smith

I accept that we need to build on the substantial progress that has already been made by intensifying take-up activity in precisely the way that I just outlined. My hon. Friend will have noted that in its report the NAO states that it was very pleased that the Department accepts all our recommendations". The report also underlines the importance of doing all we can to encourage pensioners to contact the Pension Service or other advice agencies, stating that those pensioners who had made such contact were better informed, and were generally satisfied with the help they received".

Mr. Oliver Heald (North-East Hertfordshire)

The Secretary of State will be aware that the Joseph Rowntree Foundation has said that a sustained fall in the numbers of poor pensioners is unlikely until and unless the Government's policies aimed at encouraging greater use of private pensions start having an effect". How can that happen when the Chancellor of the Exchequer raids the savers' funds? How can that happen when the extension of the means-testing that the Chancellor has introduced creates massive disincentives to savings? How can that happen when vehicles such as stakeholder pensions become such a flop that nine out of 10 of the schemes have no members at all and respected companies are simply giving up selling them? How will the Secretary of State encourage private saving?

Mr. Smith

Those remarks would have a lot more credibility if the Opposition and the hon. Gentleman had a single positive alternative to any of our policies. They do not.

To address the specific points on means-testing, is the hon. Gentleman advocating either spending more out of taxation and public spending or cutting some of the help that goes to the poorest pensioners? Judged by the Opposition's record, they would cut that help. He refers to stakeholder pensions. More than a million of them have been sold so far. Although we need to do even better than that, that is very good progress for a new pension product across the first year. Conservatives Members should support our efforts to build confidence in private pensions rather than carping at them.