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What choice will the senile, confused wanderer--whom I and no doubt other hon. Members come across quite frequently--or other cases referred to us have when the private sector does not want to know? Those in the private sector will run a mile because they cannot manage such people and, in the end, those people are dumped in the hands of the caring local authorities. When those hands are tied and can no longer provide that accommodation, what will happen to those poor unfortunate individuals?Another myth contained in the White Paper is that local authorities are monopolistic providers. Local authority social services have never been monopolistic providers, but always enablers. I worked for 12 or 13 years in social services in the Leeds area and much of my time as a social worker was spent referring people to other local agencies--voluntary, non- statutory and sometimes private agencies. That was part and parcel of the local authorities' role, which has been established since the welfare state began. The idea of a monopoly is utter nonsense.
The White Paper's aim is the introduction of competitive tendering disciplines to residential and nursing homes. Does competition have a place in caring? What will the implications and consequences be of competitive tendering disciplines in caring? I shall give one or two current examples : the bribery of social workers in Norfolk by proprietors to force admissions to their homes.
Care Weekly exposed an issue this week when it showed that Univent Ltd was letting people's rooms in private homes when people went to hospital or on holiday. It was clearing out people's personal prized possessions which may have been the only reminders they had of their husbands or wives who had since died. These possessions were cleared out without any consent or consultation. That is the reality of competition.
I know that my time is limited, and I shall sum up with one or two important points. The White Paper is a restatement of an extreme political ideology, not a genuine attempt at a coherent strategy on community care. There is a desperate need for planning, but there is not a whiff of it in the White Paper. There is also a desperate need for innovation and new ideas, but this is lacking and there is not a scrap of a new idea in the White Paper about preventive services or keeping people out of institutions. It reflects the same tired and rotten philosophy which underpins every other Government policy. Nowhere is this philosophy of profit and the market less appropriate than when talking about caring for the most dependent and needy people in our community.
9.2 pm
Mr. Edward Leigh (Gainsborough and Horncastle) : I am grateful to the hon. Member for Oldham, West (Mr. Meacher) for delaying his wind-up speech for a few minutes to allow me to say a few words at the end of this long and interesting debate. I am particularly interested in two aspects of the Queen's Speech and current policy : the sovereignty of the individual as a citizen of the community of the state and the sovereignty of the state as a member of the community of nations. In the context of this health debate I can deal only with the first issue.
Over the years, we have seen three stages in the development of the welfare state. The first is the elimination of widespread poverty and disease. Both great parties of state have had an honourable record on that. The second is the creation of the welfare state, and again
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both parties in the wartime coalition during the years of the Beveridge report have an honourable record. We are approaching the third stage--the key to the debate--in which the welfare state may become a victim of its own success, and health provision may become a victim of an aging population which rightly demands ever- increasing, more expensive and technologically based health care. How do we as a nation find the resources to meet those demands as we all want? I do not want to make a party political point, but the Conservative party has increased spending so that we now spend £1.40 for every £1 which the Labour Government spent on the Health Service, which shows that we are committed to the National Health Service. A problem which either party would face and which is illustrated by the vagueness of the Labour party's spending proposals is how to increase resources from a tax base.We can win the controversy over these reforms provided that we do not speak to the public in terms of millions and billions of pounds--unless one is of Italian descent, because the Italians, with their currency, understand billions. This is the way that we have to explain the reforms. We have to explain that every family is spending more than they have ever spent before on the National Health Service through their taxes. We employ more than 1 million people in the NHS. Ordinary people who pay taxes have a right to demand to expect some accountability from the 1 million people who work for them. If we explain the reforms in that way, I am sure that we can make them stick and make them successful.
There is a limit to how far we can go along that road. The controversy which has been stirred up by vested interests as we have attempted to bring in reasonable reforms, shows some of the difficulties that we face. We should consider what we can do, not now, but perhaps next year, or in the next Parliament.
The part of the Bill which states that pensioners will enjoy tax relief on private health insurance is important. Perhaps we should think in terms of becoming a savings and not a spending society, of being a planning rather than a spendthrift society. We must do that as individuals and not just as a nation.
There is nothing wrong with people planning for their old age and their health care through private health insurance. They would be saving resources which could be given to people in greater need. Perhaps we should now consider reforming the tax system to encourage saving and planning on that basis. Then we will create a society which is planning for the future and which does not demand ever-greater spending. People think that by spending another £1 million or £1 billion they can solve the problem. We know that that is not right.
However, that is for the future. This Bill is a modest reform, which makes the Health Service more accountable. On that basis, I shall support it in the Lobby on Second Reading.
9.6 pm
Mr. Michael Meacher (Oldham, West) : As is customary in winding up, I had intended to make commendatory references to those speakers who had made an important contribution during the second half of the debate--the
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social security element of the old health and social security portfolio. However, in view of the balance of the debate, I shall confine myself to the Queen's Speech.From the somewhat cursory reference in the Queen's Speech to a social security Bill involving the revaluation in occupational pension schemes, one would think that the broad structure of social security in Britain was working satisfactorily, and that it does not need much further attention. In fact, it is in a state of unprecedented turmoil. For groups such as the young homeless and the casualties of the social fund, the Department of Social Security has become a bitterly cynical misnomer. One would not guess that from the Prime Minister's opening speech, however. Last Tuesday she proclaimed :
"Not only have we had extensive growth and created extra wealth but we have shared the success."--[ Official Report, 21 November 1989 ; Vol. 162, c. 26.]
That must come as a novel idea to the 150,000 homeless people sleeping rough in London, and to the beggars who have reappeared in the streets and tube stations of London for the first time since the war.
The Prime Minister went on to say :
"a family with two children, and the husband on average earnings, now gets an extra £55 a week in take-home pay, after allowing for the increase in prices."--[ Official Report, 21 November 1989 ; Vol.162, c. 26.]
What she did not add was that the 2 million pensioners who depend wholly on the state pension, over the same period that she has been in office and after allowing for rises in prices, have had an increase of precisely 18p a week. That is the trickle-down theory of economic growth so beloved of the Government.
The other day, Lord King, whom the Prime Minister would no doubt describe as "one of us," paid himself a rise of £4,000--and that is not per year, but per week. The worker on average pay gets an extra £3 per week this year in real terms, but pensioners get a few paltry pence. One might call it the trickle-up theory.
By breaking the link with earnings, and by indexing pensions only with prices, the Government have saved themselves £4 billion at the expense of pensioners. I trust that when the Chancellor, no doubt proudly, proclaims in the Budget next March that he is running a £15 billion surplus, he will have the honesty to tell the country that the pensioners have paid for more than a quarter of it.
If the Prime Minister were true to her word about sharing national prosperity, why was one of her first acts on coming to office the breaking of the link between pensions and earnings? Had she not done that, the single pension would be £12.65 per week higher and the married couple's pension £20 per week higher than it will be next April. Far from sharing in national prosperity, pensions as a proportion of average earnings have fallen from 30 per cent. to about 23 per cent. Putting it straight, pensioners have lost about one quarter of their pension in the past decade.
Mr. Whitney : What was the impact on pensioners of the fall in value of their savings due to the inflation record of the Labour Government?
Mr. Meacher : Despite the high inflation of the 1970s--there was high inflation in the early 1980s too--the state pension increased by more than 20 per cent. under Labour, after taking account of prices, compared with a 0.5 per cent increase under this Government. I want to be fair to the Prime Minister. She added last Tuesday :
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"we gave extra help"--I think that the Secretary of State referred to it again today "to the 2.5 million pensioners who need it most".--[ Official Report, 21 November 1989 ; Vol. 162, c. 27.]
One has to admire the way in which the Prime Minister and the Secretary of State for Health make a virtue of necessity. That is, of course, a reference to the Lawson gaffe. The former Chancellor dropped the bombshell that he was thinking of targeting--for which read "means-testing"-- pensions. His red-faced colleague, the then Secretary of State for Social Security, was forced to wheel out a new premium for the aged to explain away what he meant. I note that the Prime Minister is now quoting this embarrassment bonus, as I prefer to call it, as an achievement, but it was no great achievement--it was simply handing back with one hand what had been taken away only 18 months before in the Fowler reviews.
The poorest pensioners are not the only ones for whom the Prime Minister's share of prosperity is not so much a mirage as a sick joke. There are today 250,000 people in receipt of transitional protection who had no rise in April 1988, no rise in April 1989 and who will get no rise in April 1990. By definition, people on transitional protection are among the poorest in society yet by next April their standard of living will have fallen by some 18 per cent. in the past three years.
The disabled, too, would be surprised to hear that they have shared in rising prosperity. In 1979, the Tory party manifesto said : "Our aim is to provide a coherent system of cash benefits to meet the costs of disability, so that more disabled people can support themselves and lead normal lives. We shall work towards this as swiftly as the strength of the economy allows."
Five years later, the Government smugly declared themselves satisfied with the level of economic growth, but declared that they needed more information about the number of disabled people and the services that they used. Another five years and six OPCS reports later, the Government's promised comprehensive review of benefits for the disabled still has not surfaced. It appears that in social security matters advisers may advise, but Ministers are incapable of deciding.
The Prime Minister was again misleading in the House last Tuesday when she said :
"Spending on people who are sick and disabled has nearly doubled under the Government, again after allowing for inflation."--[ Official Report, 21 November 1989 ; Vol. 162 ;
c. 27.]
That sounds very good, but she did not admit that almost all that increase was due to greater take-up of the benefits, not to an improvement in the level of benefit. In other words, the increase in Government expenditure has resulted in more people claiming inadequate benefits, not in disabled people being better off. Ten years after the Government's original promise, the disabled are still waiting. I acknowledge that in the uprating statement the Secretary of State announced an extra £100 million for benefits for the disabled. That£100 million is welcome, but it does not come from outside the social security system--it is money saved through freezing child benefit for the third year running. The Government must understand that it is not acceptable to transfer money from one group of claimants to another.
The Opposition's main charge in this debate is not that the Government have failed to meet our objectives for social security--the jury needs no persuasion about that--but that they have failed to achieve their own objectives
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after 10 years in power and all the upheavals of the Fowler reviews. The Government have always set themselves the task of ending the dependency culture and giving people incentives to work. Perversely, because of their drive to cut expenditure on every occasion they have repeatedly ended up doing exactly the opposite. For example, under the old benefit system, help was given with work-related expenses to encourage more people into work. Now, under income support, that help is withdrawn. Another example is that unemployed people on income support receive help with their mortgage payments. If they go back to work and receive family credit instead, they do not get that help. That is a major disincentive to unemployed people returning to work.The Government have recently increased from £12 to £15 per week the earnings that can be offset against income support so that some lone parents can be encouraged to go back to work. That is fine, but at the same time the Government stopped the cost of child care being offset against income support, with the result that more lone parents are forced out of work and back into dependency. To cap it all, the Government now propose to introduce a £43 per week means test on unemployment benefit. A part- time worker who works one day or more a week will lose a whole week's benefit. That is a major disincentive to people taking up part-time work.
Perhaps the worst example of the Government's failure to reduce dependency is the double bind in which they have put 16 to 17-year-olds seeking work, who cannot get a job until they have somewhere to live and cannot get somewhere to live unless they can put up a fairly substantial sum in advance. Yet the Government have cut off virtually all their benefit so that they cannot make that advance. That puts young people into an impossible catch-22 situation which is the opposite of what the social security system should do. Far from reducing the dependency culture, the Secretary of State and his collesgues have been intensifying it.
Another objective that the Government repeatedly talk about is concentrating resources on those in greatest need. Even the Tory-dominated Select Committee on Social Services in a recent report recognised the Government's failure to do that when it stated : "help can be targeted more accurately or the benefit system can be made simpler to operate, but not both at the same time."
Simplification, which under this Government is a code word for cutting expenditure, has invariably taken precedence.
Child care is a classic example of how badly the Government have failed. They rejected child benefit, which has a 100 per cent. take-up, goes directly to the mother and provides no disincentive to return to work, and instead tried to target family credit on the poorest families. The Government missed their target because nearly half the families for whom it was intended did not take it up. I was surprised to hear the Secretary of State talk of it with some pride. He should be ashamed. In desperation, the Government spent £8 million on an advertising and promotion campaign which increased the take-up by all of 8 per cent., so it cost £165 in advertising for each extra family claiming. That is about as effective targeting as using a double-barrelled shotgun to hit a fly. Rather than frittering away money on glitzy advertising which does not
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work, the Minister would do far better to direct that money to increasing child benefit, which is a proven success.We see the meaning of targeting in the social fund. It is not targeting the Government's limited resources on claimants in greatest need, but targeting claimants with least resources on the Government's need to save money for the next tax handout to those with ample resources. First, the social fund budget has been halved, compared with the single payments that preceded it. Now it has been frozen for the second year running, although the number in poverty needing it has risen at the same time as the real value of the money available to meet that need is falling.
Already, DSS offices in Manchester Cheatham, Birmingham Northfield, Mansfield, Blackburn, Burnley, Folkestone and Greenock, to mention but a few, will be out of social fund money by the end of January--three months before the end of the financial year. Refusal rates are already running at 40 to 60 per cent. and in Dewsbury they are 77 per cent. What is the use of a safety net system in the form of the social fund if claimants are told, "Yes, you are eligible but there is no money to pay you"?
I will give the House an illustration. Recently a person contacted me from outside my constituency. He is a 60-year-old man in Salford who is redundant and living on benefit, which has not increased since April 1987 because he is on transitional payment. He lives on his own and has no family or relatives to help. He had a burglary. The thieves broke into his gas and electricity meters and took the contents. They also took his savings, which were to pay his rent and rates, his only overcoat and his portable television. They used his only towels as toilet paper and stuffed them down the toilet. Because his meters were broken he did not have a hot meal for a week. He asked for help from the social fund and filled in 11 pages to make his claim. He waited three weeks and was told that he could be given no help. If that man cannot be given any help, what is the point of a social fund?
Ministers think that the social fund is a great success. In February 1989, the then Secretary of State said :
"The Social Fund is now working well. Interest-free loans are providing exactly the sort of additional help with unexpected expenses that was needed people are getting a much quicker service. They know where they stand in a matter of days in most cases-- it is now proving a flexible and imaginative way to help people to meet unforeseen expenses and to live in the community".
The Secretary of State who said that certainly found out where he stood a few months later in the July reshuffle--and not a moment too soon, with views like that.
Does the present Secretary of State repudiate those views or is it his view that that is exactly what the social fund was set up to do--to target not poverty but the poor? Perhaps the Secretary of State could direct his answer to Cleveland welfare rights service, which recently encountered some people who are completely without money. No help is available from other sources and those people are clearly at risk, but they were refused crisis loans because they have no money with which to repay them. It is the ultimate absurdity to require loans to be repaid and then to refuse them to the poorest because they are too poor to repay.
The Tories are always talking about getting value for money. Our charge is that, after 10 years of Tory Government, the national insurance system represents
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such exceedingly poor value for money that if the directors--that is, the Cabinet--had to subject themselves to a vote by the shareholders--that is, the claimants who use the system--they would all be promptly sacked. While earnings have risen net of inflation by 25 per cent., benefits for pensioners and others have risen net of inflation by a niggardly 0.5 per cent. under a national insurance fund which now has a cumulative surplus of about £10 billion. Some insurance benefits for which people have contracted for years to pay contributions, such as earnings-related unemployment benefit and death benefit, have been unilaterally chopped. No private insurance company in the world would be allowed to get away with that. Unemployment benefit, which is a contractual insurance benefit, has been halved in value relative to earnings in the past 10 years. The Government are fleecing all national insurance contributors by using £3 billion of our money without our permission to bribe people to leave SERPS and take out private personal pensions. That is about as moral as giving someone a backhander to steal their own family silver.Another Tory claim is that theirs is the party of the family. That is a bit rich from a party which has just frozen child benefit for the third year running. If all the cuts were made good, child benefit would stand next April at £9 per week. That means that the average two-child family has seen the purchasing power of child benefit drop in recent years by no less than £182 per year. So much for the cynical Tory election manifesto pledge of 1987 that child benefit "will continue to be paid as now, and directly to the mother." On top of that there is the poll tax, which might well be described as the Tory anti-family tax. Families will be penalised if they care for an elderly relative at home, although offloading such responsibilities on to the family is precisely what the Government's community care policy is all about.
Dame Elaine Kellett-Bowman : That is not true. The hon. Gentleman should learn the facts.
Mr. Meacher : If the hon. Lady would care to listen, she might learn something herself. Families will also be penalised if they do not turf out their children as soon as they reach the age of 18 and become liable to the tax.
Dame Elaine Kellett-Bowman rose --
Mr. Meacher : I will give way in a moment. [Interruption.] The hon. Lady must learn to contain herself. I know that she finds that difficult.
The family will also be penalised--
Dame Elaine Kellett-Bowman rose --
Mr. Meacher : If the hon. Lady persists, I shall not give way. Families will be penalised if they fail to turf out their children when they reach the age of 18 years and become liable to the tax. At the same time, other Government policies disqualify young people if they move away from their homes. Presumably those policies are designed to drive young people back to their homes. Either way, the family loses.
Dame Elaine Kellett-Bowman : The hon. Gentleman should know--if he does not, it is time that he checked the facts--that individuals are not assessed on the earnings of the head of the household. If people are caring for an
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elderly relative, that relative will be assessed on his own income and not on that of the head of the household, and payment will be rebated accordingly. Moreover, pensions will increase by 20 per cent. Will the hon. Gentleman kindly learn the facts? He should not mislead the House.Mr. Meacher : I should have used my better judgment and not allowed the hon. Lady to intervene to indulge in a silly rant of that sort. Of course the poll tax will still be a disadvantage and a deterrent to the family. Of course the family will continue to be worse off. I do not know where the hon. Lady sees a 20 per cent. increase in pensions, unless she is foreseeing the advent of another Labour Government.
What we are seeing is all part and parcel of the Government's policy to drive women out of the Labour market and back into the home. As one of the Secretary of State's predecessors strikingly put it :
"Quite frankly, I do not think that mothers have the same right to work as fathers. If the good Lord had intended us to have equal rights to go out to work, he would not have created man and woman." That was said by the then right hon. Member for Wanstead and Woodford, Patrick Jenkin, who is in another place now. One might be excused for thinking that if the good Lord had intended women to have a fair deal, he would not have created the Prime Minister. I conclude, as the Prime Minister would wish, with her favourite theme--how she is leading the way in Europe. Her paranoid opposition to the European social charter has damaged workers' rights in Britain. At the same time, she is preventing pensioners from getting the fair deal that they receive in Europe. After 10 years of falling back, the single pension in Britain now represents an average of only 46 per cent. of previous net earnings. In France, it is double that representing 92 per cent. of previous earnings, and in Germany it is nearly double.
The Prime Minister has consistently set her face against the introduction of any EC proposal, however beneficial, if it impinges on her social policy. It is the British pensioners who have lost out. The latest example of that is the Government's rejection of Europe-wide concessionary bus and travel passes. It is a disreputable record to reject cut-price travel and at the same time to insist on cut-price pensions.
In yesterday's edition of The Sunday Times --not exactly a bastion of the Labour party--it was clear that the truth was beginning to seep out. There is a large and growing underclass. This is not an academic argument about the precise definition of poverty. There is evidence that cannot be ignored of raw hardship, bitter frustration, endless bureaucracy and growing despair. That is the daily experience of up to one fifth of the population, and nothing in the Queen's Speech will alleviate a fraction of it. Indeed, much of what is proposed will intensify it. That is why, in the name of the forgotten Britain, we shall reject the Queen's Speech today.
9.33 pm
The Secretary of State for Social Security (Mr. Tony Newton) : Like the hon. Member for Oldham, West (Mr. Meacher), and perhaps slightly against the trend of much of the debate, I shall concentrate most of my remarks on social security. If there are issues to which I can helpfully respond on other aspects of the debate, I shall seek to do so as I go along.
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In the light of the comments of the hon. Member for Oldham, West and a number of his hon. Friends, I shall place on record the increasing size of the social security budget over the past decade. As the hon. Gentleman has obviously undertaken a great deal of research involving a wide variety of figures, he will know that over that time, social security spending has increased by no less than £13,000 million, or by 35 per cent. in real terms. Sizeable chunks of that huge increase on an already huge bill, which has risen as a proportion of Government expenditure and is far and away the largest of the Government's spending programes, have gone to two of the groups on which the hon. Gentleman reasonably focused many of his remarks : people over retirement age and the long-term sick and disabled. On the elderly, spending is up by more than one quarter, by something like £5 billion.Ms. Clare Short (Birmingham, Ladywood) : But is expenditure up per head?
Mr. Newton : I shall give figures per head in due course. The hon. Lady is welcome to encourage me, because I shall be able to respond to her blandishments.
Real spending on the elderly has been in the region of £5,000 million, and £3.5 billion has been spent on the long-term sick and disabled and their carers. Those figures have been increased again by my uprating statement of one month ago and by the Autumn Statement of my right hon. Friend the Chancellor of the Exchequer a week or two ago. The increase announced by my right hon. Friend demonstrates the Government's continued commitment to a social security system that directs substantial and substantially increased help to those in need.
Mr. Allen McKay (Barnsley, West and Penistone) : Can the Secretary of State explain to my constituent, Mr. Hensall, why it is that under the transitional arrangements he has not received an increase in benefits for three years, and why under income support he has now lost his heating and diet allowance, as well as the special allowance that he received for his dialysis treatment?
Mr. Newton : I would say to the hon. Gentleman's constituent and to others that the change from the incredible complexities of the old supplementary benefit system to income support and its clear structure of premiums cannot be achieved without some difficulties. We have never attempted to disguise that. However, the new premiums are in general far higher than the additional requirements payments included in the previous system.
When I was at the Department of Health and Social Security in the job now being done by my right hon. Friend the Minister for Social Security, it was clear that, under the old system, far too few people received the benefits to which they were entitled. Not only did the claimants barely understand the system : nor did many of the Department's staff. It was right to introduce the simplified structure, which in most cases has led to considerable
improvements--especially for many long-term sick and disabled people--by comparison with the entitlements under the previous system.
Over the next three years, the real growth in social security expenditure is expected to reach an average of 4 per cent. a year. That is growth--not cuts or reductions, but an increase. That is why I have been able to pursue a policy of directing additional resources where they are most needed.
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The hon. Member for Oldham, West mentioned national insurance contributions. All the achievements that I mentioned have been against a background of substantial reductions in national insurance contributions within the last month, bringing a benefit of at least £3 per week to most families and of £6 per week to many families. That has helped many people who do not have large incomes to improve their take-home pay and to benefit their standard of living. The massive increase in social security expenditure has been made possible by the fact that our economy has been much more successful in generating economic growth in the past decade than in the one before. That is the context of today's debate, and the context in which Opposition Members are suggesting ways of building on improvements that we have already achieved.Much of the debate, and a good part of what was said by the hon. Member for Oldham, West, has concerned pensioners' interests ; as I said earlier, I find that understandable and indeed welcome. Again, however, I believe that discussions of such matters should be based on at least an understanding of the considerable improvements in conditions for our growing retired population--although the hon. Gentleman and his hon. Friends may not always like what they hear. Some of the figures involved came up during social security questions this afternoon, but I should like to put the facts clearly on the record now. According to the latest available information, pensioners' average total net income increased in real terms by 23 per cent. between 1979 and 1986.
Mr. Paul Flynn (Newport, West) : That is the average.
Mr. Newton : I accept that, and I shall deal with the hon. Gentleman's point in a moment. The 23 per cent. increase, however, compares with a real-terms increase of only 3 per cent. when Labour was in office.
Mr. Newton : If the hon. Lady can demonstrate to me that it is not true, I will gladly listen to her explanation--or her attempt at one. I did not invent those figures, however.
Ms. Short : We are all familiar with the way in which the Government manipulate, distort and fib with statistics. We also know that pensioners' income have risen more slowly than general well-being in society, and that they are relatively worse off than they were when the Government first came to power.
Mr. Newton : I am afraid that that simply is not true. I have already given the figure for the real growth in pensioner's average total net incomes. They have risen by roughly a quarter--23 per cent., to be precise--increasing twice as fast as the income of the population as a whole.
Moreover, far fewer pensioners are on the lowest income than in 1979, when 38 per cent.--nearly two fifths--were in the bottom fifth of the scale of national income distribution. That figure has now fallen to slightly less than a quarter--24 per cent. I accept that there are variations within the group of pensioners, but as a whole that group has improved its position under the stewardship of the present Government.
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Mr. William McKelvey (Kilmarnock and Loudoun) : Does the Secretary of State accept that, had we retained the original formula whereby pensions increased in line with rises in either inflation or wages, pensioners today would be £18 a week better off? If he agreed with that, pensioners might start to understand the argument that he is trying to advance.
Mr. Newton : There are a number of levels on which one can respond to that question-- [Interruption.] The hon. Member for Oldham, West laughs, but he did not laugh when he was Minister with responsibility for social security in the last Labour Government. The Government of which he was a member were unable to fulfil their undertaking to uprate pensions. They ran out of money and the International Monetary Fund would not allow them to go on spending. The Labour Government generated so much inflation that large parts of pensioners' incomes other than their pensions were decimated.
Mr. Norman Buchan (Paisley, South) : The right hon. Gentleman accuses the previous Labour Government of being unable to fulfil their undertakings. Is not the crime infinitely worse when the Minister claims that the Government would have been able to uprate pensions but instead cut them?
Mr. Newton : The hon. Gentleman, who was also a Minister in the Labour Government, will recall that in the mid-1970s the Labour Government were confronted with a public expenditure overrun and an astonishing increase in inflation--well into double figures--that led to a change in the uprating basis and to the taking of probably over £1 billion from pensioners, at current prices, to rescue themselves from their inability to keep the promises that they had made. I promised to return to the point about figures that was made by the hon. Member for Birmingham, Ladywood (Ms. Short) from a sedentary position. My figures go up to 1986, and I shall tell her what happened to the component parts of pensioners' incomes. They are relevant. They are weekly figures and the comparison is drawn between 1979 and 1986. During that period, pensioners' incomes from total social security benefits rose in real terms from £48.50 to £57.70 --a very substantial increase. Their income from occupational pensions also rose very fast, from £12.70 to £19.80. Perhaps most striking of all in terms of the increases, their income from savings rose from £8.70 to £14.20.
It is in the last figure that the crucial clue emerges as to the difference between what has happened to pensioners under this Government and what happened under the previous Government. Whereas income from savings rose by about 64 per cent. under this Government, the weekly income that pensioners enjoyed from their savings during the period of the Labour Government fell by 16 per cent. The inflation that had been generated by the Labour Government had the effect of cutting pensioners' incomes from other sources. Our first priority has been to protect the value of the state pension. That we have fully and faithfully done, and we shall continue to do it by means of the uprating that I announced a month or so ago-- [Interruption.] I wish that the hon. Member for Ladywood would not shout from a sedentary position that facts which can be established are lies. Even the hon. Member for Oldham, West acknowledged that there had been, at the very least, full
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protection of the basic state retirement pension. During the last month we have enhanced its value for about 400,000 pensioners by abolishing the earnings rule, so that those who were unable previously to enjoy the full value of their state retirement pension can now do so.Beyond the priority that we have given to protecting the value of the state retirement pension, we have set out to achieve two major aims. The first, as is clear from the statistics that I have just given, is to protect the value of pensioners' increasingly important other income--from occupational pensions and, above all, from savings, which were reduced by the inflation that was generated by the previous Labour Government. Our success on that front has contributed to a considerable degree to the general improvement for many pensioners.
Mr. David Winnick (Walsall, North) : Is the Minister aware that a parliamentary answer to me stated that 25 per cent. of all single pensioners had a total income of less than £60 a week? Why does not the Minister recognise that hundreds and thousands of pensioners face this winter with very small incomes and that they are desperately concerned about food and fuel? They do not know how they will make ends meet. The Minister's pious words are no consolation to my constituents who are poor pensioners.
Mr. Newton : The hon. Gentleman leads me naturally to my next point about our aims alongside the clear protection of the basic state pension. We have sought to ensure that pensioners enjoy the advantage of the growing amount of occupational pensions which are payable to an increasing number of pensioners. The great majority of newly retired pensioners receive occupational pensions and have savings. We are determined to ensure that we protect the income from those sources, because they are very important to pensioners' standards of living.
The next element in our strategy is that we recognise clearly that a significant number of pensioners retired before occupational pensions were widespread or retired without being able to build up the savings that more recent pensioners have accumulated. We have openly and directly said that it would be right for the Government, when we can make additional resources available, to steer them towards the pensioners who are least well off. We have done precisely that within the past month with increases in the income support premiums for older pensioners and disabled pensioners on income support which has brought up to £3.50 a week of additional help to about 2.5 million pensioners.
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