Pensioner Poverty

HC Deb 27 March 2003 vol 402 cc142-6WH

2. Mr. David Chidgey (Eastleigh)

If the Government will make a statement on the level of pensioner poverty. [104448]

The Minister for Pensions(Mr. Ian McCartney)

The Government are committed to tackling pensioner poverty. Since 1997, our strategy has been to target help on the poorest pensioners. Our priority has always been to focus help on those who need it. That is why we introduced the minimum income guarantee, from which 2 million people are benefiting . The take-up campaign has put an average of £20 a week extra in the pockets of 149,000 people, who would not otherwise have received the money.

We are going a step further and are introducing pension credit. It will reward savings, not penalise them. It will be easy to apply for and it will remove the indignity of the intrusive and bureaucratic weekly means test. As a consequence of that change, those eligible for pension credit will receive an average extra income of £400 a year. At last, the savings of those who are just above the minimum income guarantee level are being recognised. The latest HBAI—households below average income—figures show that 400,000 fewer pensioners are living in relatively low income households than were when we came to power.

Mr. Chidgey

I thank the Minister for his reply, but he will recall that the National Audit Office report, "Tackling Pensioner Poverty", which came out last November, highlighted the fact that between one quarter and one third of pensioners failed to claim the minimum income guarantee to which they were entitled. Today's report issued by the Department for Work and Pensions states that the take-up rate is little changed. How can he justify means-testing more than half of all pensioners for the new pension credit scheme in October when he has not tackled the disastrous take-up shortfall that is blighting the Government's efforts through their benefits schemes? [Interruption.]

Mr. Deputy Speaker

Order. I suggest that the Minister defers his reply until after the Division. If there is one Division, we will return in 15 minutes. If there is another, we shall return in 25 minutes.

2.43 pm

Sitting suspended for Divisions in the House.

3.8 pm

On resuming—

Mr. Deputy Speaker

Provided that there are no further interruptions from Divisions, we should be able to continue this questions session until 3.55. Again, I appeal for short questions and answers—we did not get off to a very good start. The Minister for Pensions will now reply.

Mr. McCartney

Thank you, Mr. Deputy Speaker. I am not sure whether you have a squint in your eye or whether you were looking at me when you said that we had not got off to good start.

It seems such a long time since the hon. Member for Eastleigh (Mr. Chidgey) and I last spoke. I am glad that he asked me about the National Audit Office report that was published on 26 March. It boldly stated that the Government had made good progress but that they should build on it. That is absolutely right—we have made fantastic progress. With the introduction of the pension credit and the other changes that we have made since 1997, there has been a massive £8.6 billion increase in income across the board for Britain's pensioners. That is no mean achievement and I will not apologise for that significant shift in income towards the poorest pensioners in Britain.

David Taylor (North-West Leicestershire)

The Government have done a lot to help the aged. Help the Aged recently brought out a report that called on the Government to match their bold commitment to ending child poverty by 2020 with a similar pledge on older people. Does the Minister think that the recommendations that Help the Aged made in the report in relation to benefit take-up, disability and winter deaths are affordable, realistic and achievable, and are the Government aiming to deliver on them? If they were to do so, the country would not collapse and the economy would not crumble, and millions of pensioners' lives would be immeasurably enriched.

Mr. McCartney

I thank my hon. Friend for that question. We think of that organisation as one of our major stakeholders and we work closely with it. We have established a national group of major stakeholder organisations including Help the Aged and Age Concern. I meet regularly with that group, the purpose of which is twofold: first, it engages the stakeholders in long-term strategy and service provision for older people; and, secondly, it involves them in policy development on tackling pensioner poverty.

It is interesting that, despite some differences of opinion in the margins, pensioners' organisations overwhelmingly welcome and work with the Government on the introduction of pension credit. They work with us consistently at both national and international level to deal with pensioner poverty. We have just established a new Pension Service—we are, I think, the first Government in Europe to do so. It is a unique service that will transform the basis of the civil service. Rather than being people who represent Whitehall, we are training civil servants who have a commitment and aptitude. We want advocates for older people to be within the system.

The creation of a national network of local service providers will mean that we will, in the next few years, on a year-by-year basis, challenge and tackle pensioner poverty and make improvements in services. I welcome Help the Aged's involvement in working towards those objectives and targets.

Mr. Paul Burstow (Sutton and Cheam)

The Minister talks of progress, but figures published by the Department today show that pensioners are missing out on £1.8 billion in benefits. Up to 270,000 people are missing out on housing benefit, 670,000 on minimum income guarantee, and as many as 1.43 million on council tax benefits. The take-up rates for both the minimum income guarantee and housing benefit have increased by a massive 1 per cent. at a time when record council tax increases are hitting the poorest pensioners across the country, and take-up rates for council tax benefits are falling. What action will the Minister take to ensure that our poorest pensioners do not fall even deeper into poverty as a result?

Mr. McCartney

God help any pensioner living under a Liberal council—[HON. MEMBERS: "Hear, hear!"] I would not shout too soon—Conservatives are just as bad. I do not want to sound churlish and I would rather that they were not churlish.

The hon. Gentleman talks about giving pensioners access to housing benefit and council tax benefit, but it is the changes in pension credit that will ensure that a million extra pensioner households get access to income streams that were not there before. The Liberal Democrats have in the past few weeks come out in opposition to the scheme, and have said that they would scrap pension credit and, with it, access to housing benefit and other benefits. His party cannot have it both ways.

There is massive new investment. I hope for political consensus on that. We should target poverty not on the basis of people's age, but on the basis of their income. What lies behind the hon. Gentleman's question is the fact that he wants to redistribute the Government's resources on pensions and housing benefit and make other changes in favour of those aged 75 or more. That would mean that those on low incomes aged 60 to 75 would lose out completely. I cannot for the life of me understand why the Liberal Democrats think that it would be an effective strategy for tackling or preventing poverty to say, "If you're poor at 60, don't come to us. Wait until you're 75, if you can."

We wholeheartedly reject the strategy that the hon. Gentleman wants to deploy. Our strategy means significant increases in income year after year and access to benefits that would not have been there but for the changes that we made.

Mr. Deputy Speaker

Order. The Minister might like to know that I am looking at him now.

Mr. Jim Cousins (Newcastle upon Tyne, Central)

I congratulate the Government on introducing the savings top-up for pensioners in October. I also congratulate them on the changes in council tax benefit that will be introduced in April. They have not had much publicity, but because of the changes in the savings rules, many people will be able to get council tax benefit for the first time.

The problems of take-up are greatest among women who live on their own. I urge the Minister to consider how women pensioners who live on their own could come to understand these good new Government schemes. Such women are often quite isolated, living in difficult circumstances after the death of their partner, with poor survivor benefits through private pension schemes. They are difficult to reach and I urge the Minister to address their problems.

Mr. McCartney

My hon. Friend makes a fair point. That was the purpose of establishing the Pension Service at both national and local level. We are currently doing a great deal of work with older people's organisations on our strategic approach to improve take-up. I will write to my hon. Friend about that and I will place a copy of the letter in the Library.

If we are to target poverty, we must find ways to get to those who are voiceless and powerless in the system. The overwhelming majority of older people who are poor are women; the biggest beneficiaries of minimum income guarantee and pension credit are women; the biggest beneficiaries of second state pension will be women. The Government understand that it is crucial to tackle the inequalities in the current system that affect women; we must find effective ways to deal with them. My hon. Friend is correct—we are in the same ballpark. I will write to him with further details.

Mr. Julian Brazier (Canterbury)

Will the Minister confirm that his Department's HBAI document, which was published earlier this month, shows that the number of pensioners earning less than two fifths of the national average workers' income has risen by 100,000 since the Government took office? Will he confirm that today one pensioner in five lives below the level of that supposed safety net, largely because of the non-take-up of means-tested benefits? Will he further confirm that the proportion of pensioners who are eligible for this increasingly complex set of means-tested benefits is almost three in five? Finally, will he tell us what he means by the local delivery of benefits when we are losing post offices throughout the country and, indeed, pharmacies and other essential services?

Mr. McCartney

That was three questions in one. I will take them in reverse order.

It is a bit rich that the Conservatives, who wanted to privatise the Post Office and close virtually every post office now complain about a multi-billion pound investment in post office services. I have no doubt that we can deal with that during another of the questions.

The HBAI figures show that the incomes of 400,000 of the poorest pensioners have greatly improved because of the measures introduced by the Labour Government. There is, however, much more to do. That is why we are introducing pension credit. I ask the hon. Gentleman, when will the Conservatives get off the fence and tell us whether they will abolish or support it?