HL Deb 01 July 1998 vol 591 cc666-9

2.52 p.m.

Lord Islwyn asked Her Majesty's Government:

Whether they have any new plans to assist the poorest pensioners.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)

My Lords, an estimated 1 million pensioners do not take up the income support they are entitled to. Around 60 per cent. of those are over 75, and 70 per cent. of them are single women. These are the poorest pensioners who are missing out on an average of nearly £17 per week. From this April, we started pilot projects in nine areas of the country to find the best way of encouraging pensioners to make a claim for income support. We are also experimenting with ways of making the delivery mechanism more automatic to help pensioners claim their entitlement in future.

Lord Islwyn

My Lords, I appreciate that poorer pensioners have benefited from the Chancellor's concessions over fuel and from other improvements. However, does my noble friend agree that poorer pensioners were done a grave disservice by the previous government who removed the linkage between pensions and average earnings? Is it not therefore understandable that a key demand of the recent pensioners' convention was for a return to that linkage? Does my noble friend agree that under a government dedicated to the principle of social justice poorer pensioners should be given a high priority?

Baroness Hollis of Heigham

My Lords, I entirely agree with my noble friend's last point; namely, that the poorest pensioners should be a priority for this Government—as indeed they are. That is precisely why we have developed pilot schemes to ensure that the poorest pensioners take up their entitlement, as they should and as we believe they ought to. Seventeen pounds a week would make a substantial difference to them. We are well aware of the agenda of the National Pensions Convention. My honourable friend in another place, Mr. John Denham, has had regular, helpful and useful meetings with Jack Jones and the convention. I believe there have been five meetings altogether in which the issue of pensions uprating was discussed.

It is true that had pensions retained their link with earnings as compared to prices since 1979 a single pensioner would be better off by an average of £20 per week. That said, the real way to help pensioners have a prosperous old age is to ensure that they have a secure, decent and good second-tier pension. Pensions linking is one thing, but the main way of springing pensioners into prosperity is to ensure a good, secure second pension. That depends on good jobs and a sound economy.

Lord Higgins

My Lords, the noble Baroness has not really answered the Question, which refers to new plans. She referred to plans that are already known. Are we to understand that we must await a Green Paper before knowing of any new plans? In that context, is she in a position to tell the House when that is likely to be published?

On her point about the take-up of income support, of which all of us are in favour, will the noble Baroness explain why the Government's expenditure plans indicate that the number of elderly claiming income support is expected to fall in 1998–99? Does the noble Baroness agree that the position of second pensions was seriously damaged by the action taken regarding income tax by the Chancellor of the Exchequer in his Budget? That action seriously affected the position of second pensioners. We cannot have confidence if that is the case.

Baroness Hollis of Heigham

My Lords, my noble friends tell me that the noble Lord asked five questions. I have noted at least three and if I miss any points I will write to the noble Lord. The welfare reform Green Paper published a couple of months ago made clear that the Green Paper on pensions will be published later this year. I cannot add to that answer.

The noble Lord's second question related to new schemes. The Question raised by my noble friend was about the schemes for the poorest pensioners. It is worth emphasising information that I have already given to the House; namely, that the best way to help the poorest pensioners now is to ensure take-up of the income support to which they are entitled. We are now beginning to receive the findings from our pilot schemes as to what discourages poorer pensioners and how we attempt to overcome those barriers.

The noble Lord's third substantive question related to the change in the last Budget in relation to income tax. I think the noble Lord meant advanced corporation tax. There was a slip of the tongue. We have debated that matter several times in this House. The Government's position is clear. The health of pension schemes depends on a sound economy. We believe that a sound economy and the health and prosperity of firms were ensured by a reduction in corporation tax, which is now among the lowest in the OECD. We do not believe that the health of pension funds should depend on the distortion offered by tax changes or tax shapes in the Budget.

Lord Goodhart

My Lords, the oldest pensioners are also the poorest. Are the Government prepared to consider the suggestion made by my honourable friend in another place, Professor Steve Webb, that the additional pension for those who are over 80 should be increased from the present farcical amount of 25p a week to £5, and that an additional £3 a week should be paid to those between 75 and 80? That would be an effective way of targeting additional pensions spending on those who are most in need without the need for a means test.

Baroness Hollis of Heigham

My Lords, those proposals have been put to us. We welcome any further evidence or information that the noble Lord has to offer. It is part of a consideration of the pensions review. When the Green Paper is published, that may address some of the concerns.

Lord Molloy

My Lords, in addition to the valuable points submitted to my noble friend from all sides of the House, will she consider those voluntary organisations dealing specifically with the problems of old age pensioners—like the Royal British Legion. Noble Lords laugh, but it is a wonderful organisation. Stand up anyone on the other side who says that that is not so! I ask noble Lords not to be so deceptive. They take the mick one moment and then, when challenged, remain strangely silent. Perhaps I may proceed and say to my noble friend that there are many ex-service people who are old age pensioners living in difficult circumstances.

There are many voluntary organisations doing great work to try to improve the situation. Will my noble friend consider contacting those organisations to see whether they can give her assistance in improving the conditions of pensioners and increasing the amounts on which they have to live?

Baroness Hollis of Heigham

My Lords, I am sure that the entire House joins my noble friend in recognising the important and valuable contribution made by the Royal British Legion and the Royal British Legion (Scotland) to the well-being of our older people, particularly those who served in the forces. My noble friend will be pleased to learn that I had a meeting with the Royal Pensions Organisations, including the RBL, around two weeks ago when I had the pleasure of welcoming Mr. Champ, the new chairman of RBL, to the War Pensions Group. As my noble friend is aware, they are never backward in bringing the case forward of older people, particularly war pensioners, in relation to the rights and supports to which they believe they are entitled.