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Mr. Redwood : I am grateful to the hon. Gentleman. Does he not agree that pensioners have also benefited under this Government from income from savings, which has gone up dramatically ; from the real increases in occupational pensions ; and, for the poorest one fifth, from the substantial increase in income support and related payments, particularly for the elderly pensioner, which Conservative Members welcome and which far outstrips anything done in the 1970s?
Mr. Cook : Of course there have been increases. There have been increases in occupational pensions and, given that the Social Security Pensions Act 1975 was passed by the last Labour Government, we would expect that increase. If the hon. Gentleman looks up the figures, he will find that the bottom quarter of pensioners receive an average of £3.50 a week in occupational pensions. The second bottom quarter received an average of £10.50 a week in occupational pensions. Most of the income of the great majority of pensioners in Britain comes from their basic pension.
Mr. Robert Hughes (Aberdeen, North) : Does my hon. Friend agree that if pensioners had received this week the pension increases that they ought to have received they would even have been able to afford a pair of the special long johns from Harrods that the hon. Member for Derbyshire, South (Mrs. Currie) suggested, when she was a Minister, they ought to wear to keep warm in winter?
It is possible to measure the short change and the extent to which the Secretary of State had the money to provide extra for pensioners. If he had wanted to do so this year, he certainly had the money. Any doubt that he had the money is removed by a glance at the Government Actuary's report on the national insurance fund. In the financial year that ended last week, the Government expect to make a surplus of contributions over benefits of £2.5 billion. That, alone, is enough to treble this week's increase in the state pension. Nor is that an aberration under this Government. It is an inevitable consequence of benefits increasing in line with prices, although national insurance contributions increase in line with earnings. The Government have become so accustomed to running a surplus on the national insurance fund that the cumulative surplus has almost doubled during the last three years. By April 1990 it will stand at over £10 billion. To put that staggering sum in terms to which Conservative Members can relate, it is big enough to pay for the Trident submarine programme. There is some reason to fear that that is probably what it is doing. Rather than pass on the benefit of the surpluses to pensioners by way of increased benefits, the Treasury is siphoning them out of the fund for its own use by reducing the Treasury supplement. This financial year--for the first time, I believe, since 1948--not a penny will be paid into the national insurance fund by the Treasury. Contributors are being conned, by accepting deductions from their wages in good faith, that they are paying for benefits to pensioners and other claimants, when in reality what they are paying for is to let the Treasury pocket money that used to be paid into the fund.
Column 754The reason why pensions have not increased faster than prices is not because the Government lack the money but because they lack the will. It would take some convincing to persuade most pensioners that this week's increase keeps pace with prices. The increase that pensioners will receive this week is 5.9 per cent., at a time when prices are rising at 7.8 per cent. Some of those prices, most of which are under Government control, are rising even faster. I refer to the increases in the price of gas, fares and water. All those increases have a direct impact on pensioners.
Mr. Butterfill : Does the hon. Gentleman accept that the underlying rate of inflation, if we exclude mortgage interest payments which most pensioners do not pay, is only 5.5 per cent. and that therefore the increase in pensions is above the cost of living of most pensioners? On top of that, most pensioners have some investment income, which has improved as a result of high interest rates.
Mr. Cook : We look forward with interest to the Social Security Bill 1990 in which we shall no doubt see the new re-rating of pensions to take account of the increased income from interest on savings. Many pensioners do not pay mortgage interest--that is reflected in the retail prices index- -but they spend a much higher proportion of their income on food, fuel and the basic necessities of life. If we look at the increase in the price of those items in the retail prices index, we find that they are rising faster for pensioners than for anybody else.
Another measure that the Government have introduced which will have a direct impact on pensioners took effect only this week. The introduction of charges for eye tests will hit pensioners harder than anyone else. Boots, which has a quarter of the market, is now charging £10.50 a test. Boots is the market leader, but some opticians are charging up to £15. The optician nearest to the House of Commons is charging £17.50 for an eye test. Even if we confine ourselves to a charge of £10.50, a pensioner would need to club together this year's uprating for four weeks to afford an eye check. There is one clear, inescapable consequence. Many pensioners will now not go for a regular check-up on their eyes, and as a result some of them will put their sight seriously at risk.
It is entirely fair for me to remind the Secretary of State for Social Security that eye-test charges were introduced this month, as he thought them up before his transfer to his present post. He was also in charge of last April's social security changes. I note that the Secretary of State's amendment to the motion invites the House to congratulate the Government on the
"simpler, fairer, more flexible system".
It is curious to describe the system as more flexible when it has resulted in all the extra allowances for special needs being abolished. The new, flexible scheme takes no account of claimants' needs, although it still makes rigorous searching scrutiny of individual claimants' means. It is curious to describe the system as fairer when the people who have been hit hardest are the most disabled, frail and invalid people who received the
Column 755allowances. They received heating allowance because they are housebound, they received diet allowance because they are chronically sick, and they received laundry allowance because they are incontinent. By definition, those who got most had the most to lose. Tens of thousands of them have already lost it all because the slightest change in circumstances triggers a review whereby they lose all the transitional protection they had last April.
Some people lost transitional protection because they were unwise enough to fall sick. One of the most distressing letters I have received in the past couple of months was from a resident of Midlothian who fell sick in October and transferred to sickness benefit. In February she came off sickness benefit because she was well again and she discovered that because she had been on sickness benefit she had lost transitional protection. Why had she received transitional protection? She had been receiving an extra allowance to pay the bus fare from Midlothian to Edinburgh to visit her elderly mother twice a week. Her mother is in a geriatric hospital where she will be confined until she dies. There is simply no way in which my correspondent can afford to make that trip on her new reduced benefit of £34.90 a week. Because she made the mistake of being sick, she is unable to visit her mother in hospital. Is that fairer? Is that more flexible?
Other people have lost transitional protection because, under the party of the family, they were unwise enough to take on increased family responsibility. In previous debates, I have drawn the attention of the House to the way in which a couple who have an extra child are entitled to an extra £10.75 addition in income support, but if they are on transitional protection that money is included in the transitional protection.
Since our last debate on the subject, an even worse case has been drawn to my attention. It relates to a single girl in Cheshire. Last April she was receiving £7 a week in allowances for her diet and health needs. At the end of April she gave birth to a child. She was given an additional £10.75 which wiped out the £7 in transitional protection but left her just a little better off as she was given an extra £3.75 a week net to feed the infant. In October the child died, her benefit was reassessed and the £10.75 was taken away, including the £7 she used to receive in transitional protection. She is now on a flat rate of £26.05. This girl has suffered an appalling personal tragedy. The grief and distress that she must experience should be understood by every Member of this House. The understanding that the Government have shown of her personal tragedy is to tell her that it has cost her her benefit. Is that a fairer system? Is that a more flexible system?
There is another example that I should like to share with the House. This very month the Secretary of State hopes to complete the proceedings on the Social Security Bill, which will force the unemployed into even more desperate efforts to find work. Under the Tory party, of course, some claimants have lost their transitional protection because they were unfortunate enough to succeed in their search for work. One case was brought to me by a citizens' advice bureau in north London.
One claimant in north London--a person confined to a
wheelchair--through great personal effort, was successful in finding a temporary job, for four weeks. What support did the Government give that disabled person as a demonstration of the virtues of independence and self- reliance? The support they gave him was that when he ceased his four weeks' employment and came back on to benefit he discovered that he had lost his transitional protection because he had been temporarily employed. That is what is unfortunate about his experience. If I may say so, it is a question not of misfortune but of deliberate Government policy. That person is now £4 a week worse off than he would have been if he had never bothered to seek work. But perhaps the most remarkable contradiction between this Government's rhetoric and the reality of their benefits policy is that, under the party of the owner-occupier, some claimants have lost all, or nearly all, their transitional protection as a result of the rise in the mortgage interest rates, which is the Government's chosen way of fighting inflation. Disability Alliance has drawn my attention to the case of one of its members who was receiving attendance allowance--indicating, as the House will know, that he was severely disabled. Last April he was receiving £17 a week in transitional protection. As a result of the increase in the mortgage interest rate, his interest payments have gone up by £13 a week. His entitlement, of course, has been adjusted to reflect that addition, but every single penny of the £13 comes out of his transitional protection. He is left with additional mortgage expenditure but not an additional penny in benefit.
An interesting feature of that case is that last April a then Under- Secretary of State at the Department of Health and Social Security wrote to the Member of Parliament for this claimant, and ended his letter reassuring the MP by saying :
"I do hope that you will now be in a position to reassure Mr. F that he will not be any worse off in April as a result of the changes."
Here we come to the greatest irony of all. The House will recall that when we debated the April changes we were assured repeatedly that 88 per cent. of claimants would be either better off or no worse off. I should like the Secretary of State to confirm that in calculating that 88 per cent., every one of the cases that I have drawn to the attention of the House in the last 10 minutes was counted. I should like to hear the Secretary of State try to explain to any one of those people that he or she was not a loser as a result of last April's changes. I invite the Secretary of State, or the Minister for Social Security--whichever one of them has the greater brass neck--to repeat to the House now that those people were not losers as a result of the "fairer, more flexible" system that was introduced last April. I cannot hear it from them ; I am willing to hear it from any Conservative Back Bencher who voted for the measures that were introduced last April. I am bound to say that if no Conservative Member is prepared to argue that these people were not losers, we can conclude only that the 88 per cent. figure was a mischievous deceit practised upon this House and upon the public. Not all the people who are on transitional protection have yet lost it. At the end of this week there will still be a minority drawing transitional protection. That is something of a mixed blessing particularly as this week
Column 757those who have managed to retain the transitional protection do not get a penny extra in benefit--that is 570,000 claimants, one tenth of all those on income support. By definition none of them got a penny last year either. For two successive years they have experienced a freeze in their income--two years in which prices have gone up by 12 per cent.
Many of those affected have written to me and my right hon. Friend the Leader of the Opposition. There is a common theme to the letters that they send us : disbelief that even this Government could treat them so badly. They demonstrate a touching and misplaced faith in the belief that the Government cannot let them suffer so badly. I have in front of me one such letter and I shall share only this one with the House. It says :
"I have been waiting desperately for this £2.50 rise as my money runs out on a Friday and I have to wait till Tuesday comes round again before I get my pension as I have angina, kidney complaint and rheumatoid arthritis I am so cold all the time and gas is so dear, on top of all this I am also a diabetic I cannot afford a proper diet as I never have enough money left and for some time I have been losing weight".
During the radio interview when I heard the Minister perform I was astonished to hear him describe the situation in which that correspondent finds himself as a "soft landing". That suggests that he does not have the remotest grasp of the bleak despair of those half a million people on transitional protection. He is not alone in his incomprehension. The last time we had social security questions one Conservative Member asked of the Parliamentary Under-Secretary whether he was really satisfied that claimants had been warned sufficiently far in advance in order to make other arrangements once their benefit went down. The Under-Secretary replied that all those who were not having their benefit uprated and who were on transitional protection :
"will have been informed well in advance."--[ Official Report, 6 March 1989 ; Vol. 148, c. 588.]
Perhaps the Secretary of State can tell us how on earth those claimants are supposed to make other arrangements. What are they supposed to do? How are they supposed to cease to be retired or cease to be disabled? How are they supposed to cease to suffer from arthritis or from angina?
One reason why it is inexcusable for Conservative Members not to understand the plight of those claimants is the letter which I just read to the House, which was sent from a Conservative constituency. I have received many such letters from Conservative constituencies, such as Harlow, Torquay, Romford and Brentwood. Every Tory Member of Parliament represents at least 1,000 claimants who, this week, will receive not a penny in uprating.
Are those Conservative Members going to leave it to Opposition Members alone to speak for their constituents? Are none of them prepared to speak for those who find themselves in that trap? Are none of them--I appeal to what motivates them most when they vote--more afraid of what their constituents might do to them than what their Whips might do to them? If there are any such people on the Conservative Benches I appeal to them to join us in the Lobby tonight and to vote for a simple act of justice for those bewildered and desperate pensioners who, once again, this week are cheated by their own Government.
Column 7584.33 pm
notes that it is now one year since the Government introduced a simpler, fairer, more flexible system of income-related benefits and that the uprating which took effect yesterday added a further £2.2 billion to spending on social security, now running at £51 billiion a year ; and congratulates the Government on the success of its economic policies which have enabled it not only to fulfil the pledge to maintain the value of the basic retirement pension in line with price movements but also to use the new system of income-related benefits to direct additional help this year of over a quarter of a billion pounds beyond the normal uprating to those in greatest need.'.
The Opposition have produced a motion that I fully understand in the sense that it seeks to challenge fundamentally the adequacy and the methods of the benefit provisions that were introduced a year ago. They are to be debated in part today. I have vivid memories going back beyond the past 10 years to the period when the Labour party had the misfortune to seek to govern our country.
That the Opposition should table this motion despite their record of incompetence means that I must start my speech by reminding the House of why I am able, as Secretary of State, to spend record sums of money in our country's history on social security--the increases this month attest to that--and how miserably Socialism's record compares with our success.
We were, and will continue to be, re-elected to office because of the absolute inability of Labour Members to understand the reasons for our success. [Interruption.] I will take my time and make the points I wish to make. Opposition Members have tabled the motion and if we have the usual vulgar and irrelevant sedentary interruptions that we get from them, that will only take time out of the time available to them in the debate.
Social security needs, above all--I should have thought that this view was shared by Members in all parts of the House--wealth to be able to care. Without economic success, none of our achievements, or the understandable ambitions and aspirations of the hon. Member for Livingston (Mr. Cook), would be possible.
The uprating this year increases our spending on social security to £51 billion. That is not simply an increase of £2 billion over the previous year, for it conceals additional increases because of the happy reduction in unemployment. That adds about £1.6 billion to the overall increase in my spending.
That record is not just for this one year. It reflects a decade of achievement in which we have seen increases in social security spending go up by 33 per cent.-- [Interruption.] I think I know the point that the hon. Member for Newcastle-under-Lyme (Mrs. Golding) is making, albeit from a sedentary position. Would she care to rise and interrupt and make it in more detail? I should be happy to let her do so, and I would point out in reply that, even taking unemployment out of the data, the increase would still have been 27 per cent.
Column 759In that decade of achievement, the priorities of the Government have been clearly shown by their spending on social security. We have seen a pattern of increase as a proportion of our overall public expenditure from 25 per cent. in 1978-79 to 31 per cent. this year. That is a sign of the added significance that we place on social security spending compared with Labour Members when they were in office, and the contrast in that improved position within that increased expenditure is telling in terms of social security priorities.
Mr. Ted Rowlands (Merthyr Tydfil and Rhymney) : If there has been such tremendous economic success and the Chancellor has a surplus of £14 billion, why will pensioners on £47.90, many of whom live in my constituency, not receive a penny increase in the next financial year because the Government are clawing back the whole of the transitional allowance? The same will apply the following year in relation to the £1.80. Surely the Government could have afforded to ensure that such pensioners got a real increase.
Mr. Moore : I shall come to the question of pensioners and to the transitional point to which the hon. Gentleman refers. It is an important issue which I shall cover in detail. I wish first to contrast the relative impoverishment of the areas that Labour Members considered, rightly, to be important when they were last in office with the decade of achievement under the Conservatives. To do that I will take only two issues, the disabled and families with children. The achievements of the last Labour Government on behalf of the disabled were considerable. They increased spending in real terms by 29 per cent.--they increased spending each year in real terms on the disabled by £220 million--and I recognise that achievement. But that was as nothing compared with the achievement of the last decade, during which expenditure on the disabled has increased in real terms by 90 per cent., or an annual average increase of £390 million. That is the first contrast that I think the House will acknowledge. The second is about families with children, and I am talking about spending in real terms.
Mr. Robert Hughes : Will the right hon. Gentleman confirm that one change that the Government have made applies to people who apply for attendance or mobility allowance? Does he agree that when such an application is granted the money will now be paid not from the date of the claim, if it takes time to process through appeal, but from the time it is granted? Why are people being cheated out of this money, out of disablement help that they need desperately?
I should like to look at the second area of major social security expenditure because the motion refers to all benefits. That second area is expenditure on families with children. When Britain last had the misfortune to have a Labour Government expenditure was reduced in real terms over five years by 7 per cent. I am sure that the then Labour Government had no intention of doing that, but they were not able to govern with economic success.
Column 760In the last decade we have seen an increase in expenditure on families with children of 27 per cent. In addition to this year's uprating, our economic success has allowed us to spend an extra £200 million on a poorer pensioner package which is welcomed by all hon. Members. I shall deal with that later. Again because of our economic success, my right hon. Friend the Chancellor was able to announce in his Budget the abolition of the earnings rule for pensioners at a gross public expenditure cost of £375 million. Everybody welcomed that. He was also able to announce because of our economic success the completion of our national insurance contribution changes. That will especially help the lower paid and will cost £2.8 billion in a full year. I could continue to deal with our record, but I think that I should answer the first Opposition charge.
Mr. Dennis Turner (Wolverhampton, South-East) : People outside will treat the Secretary of State's contribution with absolute incredulity. Thousands of my constituents are finding it impossible to live through the week. How can the Secretary of State say that the Government have been kind and generous when people know that they cannot live from week to week? This week a lady in my constituency threatened suicide because of water bills pouring through her letter box. She has no possibility of paying them. The Secretary of State's speech is no answer to the real struggle that our people face day by day, in Conservative as well as in Labour constituencies.
I have tackled the Opposition's first basic charge about the adequacy of provision. I shall now consider the challenge in the motion to the methods of the new system and our transition to it. Will the Opposition seek to argue for a return to the old, unloved supplementary benefit and single payments system? As they well know, it had flaws which they recognised. It was complex, difficult to understand, extremely intrusive, and absolutely inflexible. Hon. Members did not like the fact that, for example, a family earning £140 a week could be worse off than a family earning half that amount. None of my hon. Friends--I am not certain about Opposition Members- -would welcome the return of the abused single payments system under which 80 per cent. of the money went to about 10 per cent. of the claimants.
This is the first anniversary of improvements that are already in. The first of those is income support. Nobody would deny that there is now a simpler system that is faster for claimants. That is important for those who claim and those who advise claimants because it means that they can understand the advice. Those who sought to try to help people through the old supplementary benefit system were not impressed by the complexities of the structure.
The new system is much faster. We are handling claims within five days, rather than nine days, as in March 1988. That is important for those who seek help. The system is also producing--again, I should have thought that this
Column 761would be welcomed by Opposition Members if they were in a more serious mood--an 80 per cent. success rate for the claimants compared with 73 per cent. previously.
The error rate--another important feature of a system designed to help people--has improved from 12 per cent. to 8.3 per cent. Furthermore, as I illustrated last year and in this week's benefits improvements with regard to child premiums, it is easier to target help more accurately as a consequence of the new income support system.
Family credit, again, is infinitely better than family income support. A total of £422 million has been spent in the first year in comparison with £180 million on family income supplement. I should have thought that that would be welcomed by hon. Members on both sides of the House. I should also have thought that the House would be welcoming the fact that payments are averaging £25 a week. The expenditure percentage take-up so far is too low ; it is 65 per cent. and I am launching a major new campaign to increase it. But the expenditure is more than double the FIS of a year ago.
I should have thought also that the House would wish to support the changes in the disablement arrangements. Last year, under the old scheme, 70 per cent. of long-term sick and disabled claimants were getting additional payments averaging £5.34 per week. I will not lay too much stress on the fact that under Labour the figure was not 70 per cent. but 38 per cent. Now all 270,000 are getting the disability premium, which is running at £13.70. I should have thought that that would be welcomed by hon. Members on both sides of the House. I should have expected the House to welcome also the fact that, while under the old system 4,500 severely disabled people were getting domestic assistance additions averaging £6.35 per week, now 7,000 are getting severe disability premiums at £26.20. Again, I should have thought that that was something to be welcomed by all hon. Members.
Beyond that, the new system is much more flexible. My hon. Friend the Minister for Social Security and I said that we would monitor the system and seek to change it if necessary, and we have been able to do so, as all hon. Members know, not just last year but three times this year.
Mr. Martin Redmond (Don Valley) : I am grateful to the Secretary of State for giving way. Will he accept the simple truth that there are many elderly disabled people worse off under his regulations? What steps will he take to ensure that those people are brought back up to standard?
Mr. Moore : I always listen to the hon. Gentleman. I was trying to illustrate that in terms of the new versus the old system there have been enormous improvements for the disabled. I said, as did my hon. Friend the Minister for Social Security, that we would watch, monitor and seek to improve the system. We have already made major changes in a relatively short period and I will continue to watch the area to which the hon. Gentleman particularly draws my attention. I will come in a moment to pensioners, but I think it right first to address the point made by the hon. Member for Livingston about transitional protection. As he well knows, one cannot change any system in such a way that most will gain or be unaffected without some doing relatively less well. The Government promised in 1986--we have the economic success to fulfil our promises--that we would protect income support recipients from cash
Column 762losses during the changes. Clearly, that protection reduces as entitlement rises with each uprating. If it did not, that would mean keeping the old system for ever with all its inequities. The hon. Member for Livingston has mentioned quite a lot in the media, and in the House briefly today, the nature of the old system of additions. Hon. Members should remember--sometimes people forget--that something like 40 per cent. of income support recipients were not in receipt, under that incredibly complex system, of additions of any kind. Furthermore, the average addition was running at £3.57 and, although this is not mentioned very often, the whole of expenditure on the heating addition of more than £400 million was put into the income support rate.
However, I recognise the point which the hon. Gentleman has made and I can confirm to the House, because I think it right to do so, that 3.25 million income support recipients will receive their uprating in full, over half a million will receive partial increases and, as he rightly said, nearly 600,000 will receive no increase at all. But the vast majority of claimants on income support
Mr. Favell : A great deal has been said about the transitional provisions. However, but for the transitional provisions, would there not have been a two-tier system for people living in identical circumstances, old claimants and new claimants? That would be unfair and wholly unacceptable to many hon. Members and certainly to new claimants.
I remind the Opposition of what happened when they last attempted to make changes in the social security system ; I think it was in 1976 when they were going through another process with the International Monetary Fund. Memories of those days are clear. [Interruption.] I will take plenty of time to make the point. Obviously the Opposition have memories of that time when they were trying to change the system from family allowances and child tax allowances to child benefit. I am not now talking about the £1.4 billion of which they cheated families with children in one year. In the face of economic failure they also had to reduce provision in cash terms by £300 million.
I have been led astray and I shall go back to the point that I was seeking to make, which was that the vast majority of claimants on income support-- 87 per cent.--will have an increase. As my right hon. Friend the Prime Minister said today in the Chamber, 98 per cent. of pensioners will get an increase, as will practically all couples with children.
Mr. Robin Cook : Before the Secretary of State leaves that passage, will he answer the question that I put to him in my speech and confirm that every single one of the cases that I described, who have lost transitional protection in the past year, would have been counted in the 88 per cent. that he claimed last April would be no worse off as a result of the changes?
Mr. Moore : I said then, and I say again, that it is impossible without detailed notice of all the cases concerned to answer precisely. I am assuming, of course, that they were included. I will look at the individual cases ; I always do. Of course, I will come back to the hon.
Column 763Gentleman, as I always do, but I will not go into a detailed commitment on those cases now. I cannot possibly do so without examining the details.
I shall go on to deal with pensioners, on whom the hon. Member for Livingston based most of his speech. I thought that the hon. Gentleman classically fell into the Socialist trap. It was a perfect illustration of the way in which the Opposition seek to argue the issue. They are obsessed with only one part of the pension equation--the level of the state retirement pension. I shall give sufficient illustrations for the House to understand the comparisons. For pensioners the true measure of economic well-being--no doubt the hon. Gentleman thought I might say this--is their total income. That is why the Government's approach throughout this decade contains two vital elements, not one.
The first is our pledge to increase pensions in line with prices to provide a secure foundation for income in retirement. The second is to pursue policies to keep inflation under control to safeguard the pensioner's income from other sources. [Interruption.] I shall illustrate the success in a moment. The comparisons should shock Opposition Members. The success of our policy versus the failure of Labour's promise is a fact of history that I shall illustrate. [Interruption.] If Opposition Members think that Labour Governments are utterly irrelevant, I cannot say that I disagree with that concept. But they have to learn to live with the reality of what they sought to do when in office.
I want to consider first the relative record of the way in which pensioners lived under two Governments, Labour and Conservative, remembering that we have been happy to look after 1 million more pensioners, but still our record is outstanding. Throughout our period of office the growth in net income has averaged 3 per cent. per year to produce a total increase in net income of 23 per cent. versus a miserable 3 per cent. in total throughout the whole Labour period of office. Secondly, my hon. Friends the Members for Bournemouth, West (Mr. Butterfill) and Wokingham (Mr. Redwood) were very conscious of the role of savings.
What an appalling record there was under Labour. Throughout their period of office savings lost their value. [Interruption.] Those who are denying the role of savings for the pensioner will get a bigger shock at the next election. Under Labour, savings went down by 3.4 per cent. per year. In all they lost 16 per cent. of their value throughout the Labour period in office. For the eight years to 1986--we only have figures until then--savings increased by 7 per cent. per year, or 64 per cent. in all.
I saw the hon. Member for Livingston on television yesterday with wonderful charts, talking very properly about how pensioners should share in our prosperity. Let me remind him of the reality of sharing under Labour and what happened to the pensioner then. The hon. Gentleman talked on television yesterday about the pensioner needing to share in a successful growth of earnings and the economy. Let me tell him what happened. I shall give him exact comparisons. In comparison to the average earnings of all manual workers in 1974 the pensioner was receiving 63 per cent.-- [Interruption.] I will come to the Conservative figures in a second. Hon. Members will not like them. Between 1974 and 1979 the pensioner saw his percentage of the average
Column 764manual worker's income go down, not up, from 63 per cent. to 60 per cent. Was that sharing in the national earnings and prosperity? That was the price of Labour's failure.
Since then, the pensioner's share has gone up, not from 60 per cent. to 63 per cent., but to 66 per cent. I can see Opposition Members on the Front Bench nodding and chatting. No doubt they are saying, "Of course, he is now arguing about the average pensioner." Let me give them other figures that they have not heard--the figures for those who have no income other than state benefits and their state pension income. What happened to them under the five years of Labour government? Their income went from 32 per cent. of the average earnings of all manual workers, not down happily, but up by 1 per cent. That was the achievement of Labour. Under the Conservative Government their income has gone up, not by 1 per cent., but from 33 per cent. to 37 per cent. That is what is called sharing in the prosperity of the rest of the community.
Mr. Robin Cook rose--
Mr. Moore : I object. I shall now repeat carefully and precisely the figures that I have obtained from my officials. There are two groups of figures. First, would the hon. Gentleman like me to repeat the figures for the average pensioner, which he seemed to accept, or does he just want me to give him the figures for the pensioner who has no income other than state benefits? I shall repeat the figures, which are the figures obtained from my Department [An Hon. Member : -- "For what years?"] I will give the precise years. They are the latest family expenditure survey data because, of course, that is what I bring to the House. I repeat that a pensioner with no private income, whose only income is from the state, through his state pension and benefits, in 1974 would have received in comparison to the average of all manual workers 32 per cent. I acknowledge that by 1979 that had gone up to 33 per cent. By 1986, the latest figures I have from the FES data, it was up to 37 per cent.
Mr. Cook : I am grateful to the Secretary of State for giving way. I have before me a table prepared by the Library's statistical section which I believe is accepted by hon. Members on both sides of the House to be a source of impeccable objectivity and reliability. I have a copy of the table of figures from which the Secretary of State is quoting. The figures show that the Secretary of State was correct with regard to a married pensioner between 1974 and 1979. However, the figures do not rise between 1979 and 1989. They actually drop from 32.6 to 26.1 per cent. between 1979 and 1989. Those are figures produced by the House of Commons Library. I invite hon. Members to question whether the statisticians who advise hon. Members on both sides of the House can be relied upon better than the Secretary of State.
Mr. Moore : These figures come from my Department. They were obtained from the economic advisers office. The hon. Member for Livingston knows full well that I do not use data other than that which has been placed in the House of Commons Library. I will consider the figures to which the hon. Gentleman referred. However, I repeat that the figures in my possession to 1986, the latest figures available from the latest thorough FES data, take the figure up to 37 per cent.
Mr. Max Madden (Bradford, West) : On a point of order, Mr. Deputy Speaker. The figures given by the Secretary of State have been challenged by my hon. Friend the Member for Livingston (Mr. Cook). The Secretary of State says that he will reconsider the figures. Will the Secretary of State give a clear commitment that the Minister for Social Security, when he replies, will try to clarify the position so that the House and pensioners outside this place, who know very well what--
Mr. Moore : Of course that was not a point of order. I did not retract one iota of what I had said. The hon. Member for Livingston was talking about Library data. I have not seen those figures-- [Interruption.] I hope that the hon. Member for Livingston will contain himself. The figures to which he referred relate to 1989. The hon. Member for Livingston may not be aware that the latest full FES data relate to 1986 and it was on the basis of those figures that I was giving the full, accurate data. I stand by that data because it reflects the latest full data which show an accurate comparison. I want to illustrate the improving position in society. The hon. Member for Livingston quite rightly drew attention, as did my hon. Friend the Member for Wokingham, to the position of pensioners in relation to the poorest in society. The hon. Member for Livingston neglected to draw the attention of the House to the fact that in 1979 a total of 38 per cent. of pensioners comprised the bottom one fifth of the population. Happily today, only 24 per cent. of pensioners occupy that position. There has been a significant improvement in their relative position.
I agree with my hon. Friends and with Opposition Members that that is not enough. I am not satisfied and that is why I have brought forward a poorer pensioner package which will increase considerably the position of many pensioners in the autumn. [Interruption.] I wonder whether the hon. Member for Livingston could possibly pay attention to me for a moment because I want to correct what I know he would want me to correct, which are one or two unfortunate inaccuracies which he made in a radio interview on 10 April in the "Today" programme.
I fully understand that it is not always easy to keep all kinds of figures in mind at any one moment, but the hon. Member for Livingston referred to the increase as a token increase, going only to those on income support, only to those who are over 75. I must remind the House that it is not a token increase. It goes to 2.6 million people including approximately 1.4 million who are above income support level who will receive help in the form of housing benefit. It also includes 340,000 disabled people and, within the income support group, it includes 1.22 million pensioners on income support. That is not an insignificant number, as
Column 766I am sure hon. Members on both sides of the House will appreciate. Therefore, many couples over 75 can see increases this year of more than 11 per cent.
The date 11 April is an anniversary of which the Government can be proud. Our system for delivering benefits to the most needy had fallen into sad disarray. It was outdated, inflexible, unfair and bewildering in its complexity. We tackled that problem and overcame the nonsenses of the past. But Britain's prosperity, which the Government's policies have fostered, has given us the resources to do far more.