HL Deb 30 June 1988 vol 498 cc1701-3

Lord Stoddart of Swindon asked Her Majesty's Government:

What is the present level of the state retirement pension for a single person and a married couple and what would be the level of those pensions had they continued to be related to the level of earnings as well as to the retail price index.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale)

My Lords, at present, the basic retirement pension is £41.15 for a single person or £65.90 for a couple. These rates would have been £47.10 and £75.35 respectively had they been uprated in line with the rise in the general level of earnings between November 1978 and September 1987, the end of the review period for the most recent uprating.

Lord Stoddart of Swindon

My Lords, does the noble Lord not think it deplorable that pensioners should be treated in this way and that they are not to share in the much-vaunted increased standard of living? Is he aware that since 1980 when the system was changed a single pensioner has lost more than £1,500 in pension and a married couple no less than £2,400? I hope that the noble Lord, who is a decent man, will go back to his colleagues and advise them that this matter should be looked at seriously to ensure that pensioners catch up with the standard of living which they have lost over the last seven years.

Lord Skelmersdale

My Lords, it ill behoves a Member of your Lordships' House, or indeed of another place, speaking from the Opposition Benches, to use words such as "deplorable" about pensioners' incomes. It is the change in pensioners' total incomes which counts and not the rate of basic pension. The Government do not intend—indeed no government have ever intended—pensions to be the whole of pensioners' incomes. So far as pensioners' total incomes are concerned, between 1979 and 1985 they have risen on average by 2.7 per cent. a year. We should compare that with the period between 1974 and 1979 when they rose by only 0.6 per cent. a year.

Baroness Jeger

My Lords, does the Minister realise that 14 per cent. of all households (that is, 45 per cent. of all retired people) are excluded from the general index because they rely for at least three-quarters of their income on national insurance and social security? Does he recall that these pensioners have a separate price index which does not include housing at a time when housing costs for many people are increasing rapidly? Therefore is it fair that any increase in their pensions should be linked to the retail price index, which is connected to the expenditure of people who are still earning? Surely it is not fair to base it on that.

Lord Skelmersdale

My Lords, I do not think fairness comes into it—

Noble Lords

Oh!

Lord Skelmersdale

Today, my Lords, a couple with no other income will typically receive total state help of £90 a week through income support and housing benefit, including having all their rent paid where appropriate. The family expenditure survey shows that average weekly expenditure by pensioners is less than their weekly income. I believe that is what matters.

Lord Carter

My Lords, is the Minister aware that the change in the basis of the calculation of pensions is now worth some £4 billion a year to the Exchequer? Does he agree therefore that the whole of that £4 billion in tax cuts which is now entering the national pay packet is not a result of the success of the Government's policy but in fact comes straight out of the pockets of pensioners?

Lord Skelmersdale

No, my Lords, of course it does not. It comes out of the pockets of the taxpayers.

The Earl of Halsbury

My Lords, I query the logic of what we are talking about. Surely my pension should be linked to what I earned during my earning years, possibly indexed to the value of money which may have changed since then. I am not entitled to an increment in my pension because my grandchildren are now employed at a higher level of productivity than I was long ago.

Lord Skelmersdale

My Lords, the noble Earl is right to the extent that a retirement pension is a contributory benefit. There are other social security benefits which make the level up to the £90 a week to which I referred earlier. The state pension is one thing; the total income going into pensioner households is quite different, which is a fact that obviously the noble Earl has grasped.

Baroness Macleod of Borve

My Lords, my noble friend referred to single persons. Is he aware that a single mother bringing up a child has considerable help from the Government but that a widowed mother receives practically no help at all until she is of a much older age?

Lord Skelmersdale

My Lords, the social security changes have meant that the situation for widows has indeed changed, as the likelihood of their remarriage has changed. But, with respect, I suggest that that is a slightly different question to the Question on the Order Paper.

Lord Stoddart of Swindon

My Lords, the noble Lord challenged me about the record of the Labour Party. Is he aware that during the period of the last Labour Government pensions rose in real terms by 20 per cent.? Since this Government have been in office pensions have risen in real terms by 2.02 per cent. Therefore the record of the Labour Party is in fact exemplary. Does he agree that, since earnings have gone up by an average of 7½ per cent. and the Exchequer has been receiving the additional insurance contributions from those increases, they should have been passed straight on in improved living standards to pensioners? That is not being done. As I said, I believe that the noble Lord is a decent man, but I wish he would show some compassion for the old-age pensioners in our country.

Lord Skelmersdale

My Lords, I take it very hard that I am accused of not showing compassion. What I have done is to explain to the noble Lord and to the House generally that it is the total level of pensioners' incomes which matters. If he regards the record of the Labour Party as exemplary when during that period it poured money into the pockets of those who did not really need it, he is entitled to his view.