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Mr. Wigley: Will the Minister disaggregate that figure, and reveal the effect on those who depend purely on state pensions?
Mr. Heald: The lowest amount that could be received by a pensioner couple on income support, with no private or occupational pensions, is just over £100 per week, excluding the cost of renting their homes. The difference is substantial. The Government's achievement has been to encourage private provision and occupational pensions: as a result, pensioners have improved their position. Meanwhile, their savings have retained their value.
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[Interruption.] The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) makes his comments, but under Labour, pensioners' savings were ravaged by high inflation. The present Government have presided over the longest period of sustained low inflation since 1961.The Secretary of State for Wales (Mr. William Hague): And Labour pinched the bonus.
Had it not been for that long period of low inflation, pensioners' savings would be nowhere near as strong as they are today, and their investment income would not be coming through.
Pensioners in the private sector are more secure than they were because of the reforms in the Pensions Act 1995, and spending on health and care services has risen rapidly. The hon. Gentleman was wrong to say that living standards had fallen; he was wrong to say that average earnings had exceeded the income of pensioners; and he was wrong to say that nothing had been done about heating. I shall deal with each of those issues shortly.
Mr. Alex Carlile: Does the Minister agree that, in 1995, pensioners who are dependent on their state pensions are relatively far poorer than those who have the advantage of private pension provision, and that the difference is greater than it has ever been?
Mr. Heald: The hon. and learned Gentleman makes a trite point. It is obvious that pensioners who take out private occupational pensions--the Government have encouraged them to do so, and 5.6 million more are doing so --are in a better position than those who do not.
In Wales, as in the rest of the United Kingdom, pensioners' average incomes have risen at today's prices. In 1979, the figure was £95.60 per week; in 1993--I am quoting real figures--it was £138.60. That is the latest information that we have. Across the United Kingdom and in Wales, pensioners' average incomes have risen; and, if housing costs are taken into account, the position is even stronger. The increase is explained by index linking of the retirement pension, by the impact of income support and by the Government's policy of encouraging occupational and personal pension provision. Retirement pensions have maintained the value that they had in line with inflation, and constitute an essential building block in retirement income.
Sir Wyn Roberts (Conwy): Will my hon. Friend confirm that eight out of 10 pensioners have income from other sources--occupational pensions, savings or investments?
Mr. Heald: That is true. More than half the pensioners in Wales now receive occupational pensions, amounting on average to £74 per week. A substantial proportion--two thirds--now receive income from investment, averaging £37.40 per week. That improvement is the result of the Government's policies.
We should not forget that the approach of targeting help through income support means that the pensioners who are least able to make provision for themselves have a benefit that has been uprated ahead of inflation by £1.2 billion since 1988. As I have said, the lowest rate for a pensioner couple receiving income support is now more than £100 a week, and that couple's housing costs will also be met.
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Occupational and personal pension provision has dramatically increased the incomes of pensioners in the United Kingdom and Wales. There are 5.6 million individual personal pension holders in the United Kingdom. That has not happened as a result of coincidence; it has happened as a result of low inflation, which has made saving worth while. As I have said, we have experienced the longest period of sustained low inflation since 1961. The encouragement of occupational and personal pensions, and low taxes for individuals, have enabled people to choose how to spend their incomes and to take out such pensions.Mr. Martyn Jones (Clwyd, South-West): I thank the Minister for giving way at last. I just wanted to know whether he had any figures on the disposable income of pensioners in Wales and on the effect of VAT on fuel on that income.
Mr. Heald: It is right that the increases in relation to VAT on fuel were made across the board, but the effect on pensioners was mitigated by a substantial package of help, which was introduced, as the hon. Gentleman should know, in April 1994 for all pensioners, most disabled people and all people on income-related benefits. Fifteen million people benefit from that aid package. In 1994-95, the Government provided £420 million of extra help. That will rise to around £700 million extra during this financial year.
The Government are not in a position to dictate the charges that are made by various industries. Where possible, however, we try to influence the industry and, if necessary, increase or introduce grants to offset the costs. Value added tax is a broad-based tax: the supply of most goods and services is subject to VAT at the standard rate. This is the only sector where a lower rate applies. Standing charges are not part payment for supplies of domestic fuel and power--which would mean that they would be covered by the reduced rate--so they are taxed at 17.5 per cent.
The Government's policy on pensions has brought the prospect of increased prosperity to millions. We have more employer occupational pension schemes and more people taking responsibility for their retirement income. We have built a solid foundation of funded pension provision that is the envy of the rest of Europe, and we have done that through providing more choice and opportunity. That will remain the Government's policy. It is not "deplorable"--the word in the motion. It does not marginalise pensioners; it places their welfare at the heart of Government thinking.
The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) raised the issue of health and care. We recognise the importance to older people of the care services provided by the national health service and by local authorities. We have been active in our reforms to ensure that the right services reach the right people at the right time. The patients charter has set exacting standards for the NHS in hospital and community services. That is shown in Wales by the rise in the workload of hospitals. The number of cases that are being dealt with by Welsh hospitals has increased dramatically year on year.
Mr. Ieuan Wyn Jones (Ynys Mo n): I hope that the Minister accepts that I am assisting him in this
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intervention to enable him to consider various matters, but does he not accept that, although there has been a substantial increase in the throughput of people dealt with in hospitals, there has also been a substantial increase in return visits by people because they have been sent home too early?Mr. Heald: I do not accept that argument. The figures for new out- patients are up by 5 per cent. year on year--from 601,827 to 635, 984. The figures on day cases are up from 204,398 to 238,696--an increase of 17 per cent. It is easy for the hon. Gentleman to make his point in the way that he does, but the statistics show a clear rise in the number of patients being treated.
The national health service is more focused than ever on providing primary health care. When I heard the hon. Member for Meirionnydd Nant Conwy criticising the arrangements in place for general practitioners and fundholding in particular, I thought that he was ignoring patients' interests. Patients now receive the sort of health checks that we all know about, and the sort of care that doctors provide as fundholders. That system is clearly providing new benefits. It puts GPs at the forefront of caring for their patients. It is nothing other than a direct benefit not only for pensioners, but for all patients.
As in the rest of the United Kingdom, people in Wales are living longer and staying healthier for longer. Thirty years ago, Her Majesty the Queen would send out a dozen telegrams a year to centenarians; this year I believe the figure is 3,000. That improvement in health care and in longevity is the result of the Government's health care policies and of the income that is being provided.
Likewise, if one considers community care, our policies mean that more people are receiving the care that they need in their own homes, in residential care or in nursing homes in their communities. Pensioners are now involved to a much greater extent in decisions about their own care, what they need and how it is delivered, and local community charters will further those improvements.
Mr. Llwyd: What would the Minister say if he had constituents, as I have in Bala and Dolgellau in my constituency, who cannot receive any assistance from a dentist within 50 or 60 miles? Is that delivery of primary health care? What will the Minister do to ensure that those people have treatment under the national health service?
Mr. Heald: As the hon. Gentleman will know, the family health services authorities in every part of the country can provide details of dentists who work on the national health service and I commend him to take that course. He seems to be suggesting another expensive pledge in what I describe as one of the most expensive wish lists that any country has had placed on it.
Often, there are misunderstandings in relation to the issue of charging for residential care. Local authorities are required to charge up to the full economic cost of residential care, depending on the individual's means. The charging rules are closely aligned with income support rules--both capital and income is taken into account by the local authority when assessing an individual's ability to pay. Capital includes property and savings; income includes most social security benefits, occupational pensions, trust income and earnings. If the individual owns a home, the social services department will generally take its value into account when it considers capital assets, but it must ignore its value if
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one of the following people is still living there: a husband, a wife, a partner, a relative aged 60 or more, a relative under the age of 60 if the individual supports them, and a relative who is incapacitated. Social services may also ignore the value of the property in other circumstances, such as if the person who has been caring for the individual still lives there.The Government's view has consistently been that people who can pay for residential care should be expected to do so, taking into account their ability to pay, but it is worth bearing in mind the rules that protect the position if someone remains in the home. It is only in circumstances where the home would otherwise be empty that it is taken into account in the calculation of residential care costs. Residential and nursing homes set charges that represent the individual's on-going accommodation, food and care needs, just as if they were living in their own homes. It was never intended that individuals should be released entirely from the cost of their accommodation and upkeep.
In principle, it is right that people should look to their own resources before they look to the taxpayer to meet the cost of care. In that way, resources are targeted where they are most needed. The hon. Member for Meirionnydd Nant Conwy will know that there is a capital disregard in these cases, including the value of the home in certain circumstances such as those that I have outlined. The Government, however, keep those rules under constant review. He will also know that we have recently announced an important change to the way in which occupational pension income is dealt with when assessing the means of another member of the couple who goes into residential care. From next April, spouses remaining at home will have an automatic entitlement to half the occupational pension when their husband or wife enters residential care, recognising their continuing financial need. Of course, there is a discretion in the local authority up to that time to deal with it in that way. The Government's objective will always be to target help in the most effective way on the people who need it most. There has been much speculation in recent weeks. All I can say is that the matter is being reviewed. I have no announcement to make and no hints to drop. I suspect that if I had any hints, I would not be giving them to the hon. Member for Meirionnydd Nant Conwy-- [Interruption.] That was not meant in a churlish spirit. The issues should remain under review and that is what is happening.
The hon. Member for Meirionnydd Nant Conwy suggests increasing the retirement pension. His motion calls for large increases in state pensions- -immediate uprating to one third of average earnings followed by a restoration of the earnings link. I should like to commend the hon. Gentleman. At least he was open about it and revealed what his policies would be. I should also commend his decisiveness. At least he has plumped for a policy. The same cannot be said for others and it would be interesting to hear in due course how the matter is being resolved on the Labour Front Bench.
All serious commentators--including the World bank, the National Association of Pension Funds and the Institute of Fiscal Studies--have recognised that to increase the value of the state pension, which is paid regardless of income and goes to virtually all people over
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pension age in the United Kingdom and in Wales, is not a sensible use of taxpayers' money. It would cost more than £22 billion in 1996 to uprate the basic retirement pension to one third of average earnings. That is equivalent to 12p on standard rate income tax. Even at current rates, restoring the earnings link would cost £9.6 billion, or more than 6p on income tax.Such an increase would mean an extra £15 a week for the average national insurance payer. Even if the cost were divided between the employer and the employee, the employee would make an extra payment of more than £8 per week. It is worth bearing it in mind that figures on income and expenditure for the United Kingdom, including Wales, show that the group who are hardest pressed are those aged between 30 and 50 who have greater commitments. Increasing taxation levels on them in that way would be not only ruinous, but extremely unfair to people on modest incomes who have an expectation of tax levels at approximately the present level.
In Wales, the balance between pensioners and active members of the work force is slightly lower than in the United Kingdom as a whole, so if Wales were to become an independent country--as the hon. Gentleman believes it should--the costs would be even higher than the very high figures that I have already outlined. Such a policy would be bad for the people of Wales and bad for those on modest incomes who are paying taxes and national insurance and I do not believe that it is what pensioners want. It would also have the effect of undercutting occupational pension schemes and personal pension provision--one of the successes of the Government's policy. The issues put forward by the hon. Gentleman--and I shall go into them in a little more detail--are the policies of opposition; it is a wish list drawn up without regard to responsibility or cost. Has the hon. Gentleman really thought of the consequences of requiring people across the United Kingdom--and indeed in Wales--to pay an extra 12p on income tax or £15 on national insurance? Where would he find the money? He has not thought it through seriously. He is pandering to the interests of a group that has a wish list of its own, but that is not how a Government can approach the matter. The hon. Gentleman should rethink the matter and perhaps he will.
Looking at the other side of the coin, increasing employers' national insurance contributions by some £7 or £8 per week--which would divide the cost--would put an intolerable burden on business. It would damage those businesses in Wales which are having economic success and providing jobs for people who need them. Again, the hon. Gentleman should consider the matters before making wild promises which pander to a populist instinct and are not responsible policies.
By contrast, the Government have thought the issues through. We are not in the business of making promises we cannot keep. We are in the business of looking to the future and taking some of the decisions that are often hard to make. They are not the easy decisions that parties can make in opposition.
One of the Government's successes has been to defuse the demographic time bomb. Across the world, Japan, Germany, Italy and France all have debt to GDP ratios at the year 2030 that are almost disastrous. The percentage
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figure for Japan is 290 to 315 per cent. of GDP; for Germany, 95 to 105 per cent.; for Italy, 125 to 145 per cent.; and for France, 90 to 105 per cent. of GDP.It is instructive to read what the OECD said about Britain in its survey earlier this year:
"In the United Kingdom with the advantages of a good starting position and a public pension scheme that runs only a small deficit, net debt as a percentage of GDP falls to very low levels and by 2030 even turns into a small net asset position."
It continues:
"The assumption of unchanged policy for spending and taxes may well not be realistic, policies might tend to be less restrictive with the evolution of debt being less favourable."
I believe that the OECD is talking about the prospect--unlikely though it may be--that an opposition party might form a Government and do some of the disastrous things that the hon. Gentleman is suggesting.
At the moment, countries across Europe are looking at the way in which we have made state pension provision affordable and encouraged private and occupational pension schemes. It would be typical of the Opposition and the hon. Gentleman's party at a time when we have got it right in terms of affordability to say, "Let us throw it all away." That is what it amounts to--throwing away the advantages we have and the position described by an independent commentator, the OECD.
Our policy is to target resources on those who cannot help themselves and allow those who can the flexibility and freedom to make their own choices.
Turning for a moment to the Labour party, I said that the same could not be said of the official Opposition--that they had nailed their colours to the mast when it came to pension policy. The Labour party continues to keep its options open--or, alternatively, it is floundering in a sea of confusion.
At its party conference in 1993, the Labour party was looking forward to the end of means-testing for pensioners. But by 1995, apparently without changing step, we see the right hon. Member for Sedgefield (Mr. Blair) embracing the Commission for Social Justice's proposal for a scheme which effectively means-tests every pensioner in the country at retirement age. Not, of course, that we can be sure what retirement age would be under Labour, as the Labour party has committed itself to a flexible decade of retirement without explaining what the age range would be and the way in which it would be centred. If it means what we think it means, it amounts to reducing the retirement age for most people to the age of 60, at huge cost to the country--£12 billion.
It is right that we should hear from the Opposition spokesman about exactly what is Opposition policy. After all, an alternative option is that proposed by the hon. Member for Birkenhead (Mr. Field), who suggests that there should be an end to all means-testing, and compulsory private pensions for all. We would like to hear tonight exactly what is Labour party policy on pensions because people outside the Chamber might not have a clear idea. We certainly do not.
The hon. Member for Meirionnydd Nant Conwy attacked NHS health care. We have studied activity levels in hospitals in Wales. Is he seriously suggesting that trust hospitals are not more efficient than their predecessors? Is he seriously suggesting that general practitioners are
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not doing more for their patients and giving them extra health checks than they did in the past? Is he seriously denying all the improvements that have been made since 1979?The hon. Gentleman also suggested that nothing has been done to meet the heating costs of pensioners, but a whole range of policies have been introduced. For example, only last year the home energy efficiency scheme more than doubled its expenditure from £35 million a year to £100 million a year, which has benefited 600,000 households. When the hon. Gentleman talks to pensioners in his constituency about insulation, surely he tells them about the Government scheme which would give them help.
Mr. Llwyd: They say it is rubbish.
Mr. Heald: The hon. Gentleman may say it is rubbish, but 600,000 householders have benefited from that scheme because the Government have provided help. The cold weather payment scheme has also been improved, which has helped pensioners, as does the package of help concerning VAT on fuel.
The hon. Member also raised the issue of law and order. He ignored the fact that the Government have increased the number of police officers by 16,000. He also ignored the measures that we introduced in the Criminal Justice and Public Order Act 1994, for example, increased penalties and further measures on DNA testing, to make it more difficult for criminals to get away with it. They will help in the battle against law and order. [Hon. Members:-- "Law and order?"] I meant the battle against crime. Those measures will also help to ensure better law and order.
It is no coincidence that in each of the past two years we have seen a 5 per cent. fall in crime levels--the first time for 40 years.
Mr. Llwyd: A fall in reported crime.
Mr. Heald: That is not true. There has been a reduction in vehicle crime. Is the hon. Gentleman seriously suggesting that people do not report the theft of their motor cars? If they do not, they do not get their insurance money. Of course they report such crime.
There have been no changes to the methods of reporting crime in the past two years, yet criminal activity has fallen for the first time in 40 years, and at a faster rate than ever recorded. It is time the hon. Gentleman gave a little credit to the Government for that. The hon. Gentleman raised a number of other issues, but I do not want to trespass on the good will of the House by dealing with each of them. My hon. Friend the Under-Secretary of State for Wales who will be winding-up will no doubt wish to deal with some of the outstanding issues.
The hon. Member for Meirionnydd Nant Conwy put forward a whole range of propositions as though they were fact, but the truth is that not one of them has stood up to close examination. The standard of living of pensioners is not falling; it is rising. The average earnings of individuals in society are being outpaced by increases in pensions. He should accept that the Government have a deep commitment to the well-being of pensioners. That commitment is a realistic one, unlike the Opposition's wish list.
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When we took office in 1979, we inherited a society in which pensioner interests were marginalised. Under Labour, pensioner incomes went up by a little more than 5 per cent., but they have gone up by 51 per cent. under the Conservative Government. It was a society in which impoverishment and dependency was a reality for the pensioner. That was deplorable. That is not the case now. With the provision of personal and occupational pensions, the retirement pension has been protected as the foundation of retirement income. Inflation has been brought under control and it no longer robs pensioners of their savings. We have targeted income on the least well-off pensioners, and offered all pensioners more choice. I believe that the Government's case is strong when they argue that pensioners have been protected by them and given new opportunities through freedom and choice.8.34 pm
Mr. Alex Carlile (Montgomery): I congratulate the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) and his colleagues on giving us the opportunity to debate pensioners in Wales.
The Minister began his speech by complaining that the hon. Gentleman had certainly not let the facts get in the way of a good speech. I must say that the Minister has failed to let a good speech get in the way of the facts about what is happening to a significant percentage of pensioners in Wales.
The Minister treated us to an exegesis on the advantages of private pension schemes. I wholeheartedly agree that those advantages exist, and I even share his aspiration that in due course every pensioner should have a guaranteed and portable pension scheme with a private element included in it, but he cannot escape from the reality--the truth that we see, or at least Opposition Members see, every weekday and every weekend in Wales: that many Welsh pensioners, especially those in rural areas, live in real poverty. They do not have private pension schemes, and perhaps they are the historical remnant of people who will rely on the state pension.
I suggest to the Minister, however, that if they are an historical remnant, they will remain so for a long time to come, and the Government must pay proper attention to that. Many pensioners fall into the poverty trap that has been created by the income support limits in particular. For many old people, who have greater needs than younger people for heat, clothing and transport provided by others, the poverty trap can sometimes be a death trap.
Mr. Heald: The hon. and learned Gentleman sees before him a motion that calls for huge increases in public expenditure. Does he support it?
Mr. Carlile: I am sure that the Minister will have taken the trouble to study the Liberal Democrat policy document entitled "The Age of Opportunity". I do not propose to weary the House by reading from it now, and I will hand the Minister the copy that I have in my hand. It deals with what is now called the "third age". We do not agree with everything in the motion, but it is certainly our view that the Government are failing to address the needs of the group I have just mentioned.
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It is worth recalling the words of Lloyd- George in his celebrated speech on the 1908 Budget. He said:"How we treat our old people is the crucial test of our national quality. A nation that lacks gratitude to those who have honestly worked for her in the past whilst they had the strength to do so, does not deserve a future, for she has lost her sense of justice and her instinct of mercy."
It behoves us to treat those words, albeit in the somewhat florid language of the turn of the century, as having some resonance in the public mind. They certainly have resonance in the minds of pensioners who complain to us constantly about their lot.
I invite the Government in particular to pay greater attention to the problems faced by pensioners who live alone. The percentage of elderly people living alone, many of whom are women because of the differing mortality rates of men and women, has risen from 35 per cent. in 1971 to 45 per cent. in 1991, when I believe it was last measured. I am sure that the whole House would commend the fact that that figure is evidence of more pensioners retaining their independence in their very old age and staying in their own homes. That is to be encouraged.
Indeed, I suggest to the Government that it is very good value for public money to keep pensioners in their own homes, because it is cheaper to provide domiciliary help for pensioners than to keep them in public or private sector care homes. More important, it enables pensioners such as my elderly mother, and no doubt the elderly mothers of a number of other hon. Members, to retain what they value most: their independence--sometimes their fierce independence. State pension dependency, which is high in Wales, especially in rural Wales, is a threat to such independence. The Minister cited the figure of one third of pensioners in Wales being dependent on the state pension, but in rural areas such as my constituency and that of the hon. Member for Meirionnydd Nant Conwy the figure is more like 40 per cent.
The Minister's eloquent and entirely justifiable paean of praise for the private sector and what it can provide to those who have bought private pensions from insurance companies will resonate among pensioners with a dull thud. Indeed, even where, for example, farmers or small business people in rural areas have participated in private pension schemes, the contribution made by the schemes has been very small and may have made the difference only between ensuring that the pensioner had some extra support from the state and had no extra support from the state. It can often be the very thing that draws them into the poverty trap.
The problem is worse in Wales, where the percentage of people of pensionable age is higher. About 20 per cent. of the Welsh population are of pensionable age--almost 2 per cent. more than in England. In some areas, such as the constituency of the right hon. Member for Conwy (Sir W. Roberts)--I notice that he is present--the statistics suggest that 28 to 30 per cent. of the population are of pensionable age, so the problem is heightened in Wales.
Another group is often forgotten by the Government: those who care--very often unpaid--for the very elderly. Research suggests that there are 340,000 unpaid carers in this country, of whom 80,000 work for more than 20 hours without receiving a penny.
The Government have, to their credit, supported a private Member's Bill that provides for the recognition of carers. That is all very well, but we should like to hear
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when they will come up with the money to give carers true recognition, which in principle they have accepted. They should do more than pay lip service to carers. Carers give very good value for money because they often save the Government having to spend money on keeping elderly people in care homes.The 1991 census showed that social conditions are often lower in Wales. Pensioners are more likely to have unsatisfactory housing in Wales than in England. That creates special problems. It is a shocking fact that, in 1995, almost 3 per cent. of pensioners in Wales have no inside lavatory. That is not acceptable. Almost a quarter of pensioners have no form of controllable heating that can be set to their needs.
I say to Ministers, especially the Under-Secretary--the hon. Member for Clwyd, North-West (Mr. Richards), who will reply to the debate--that the way in which renovation schemes have operated in Wales, particularly in the past three or four years, has led to a great shortage of money to meet need where it is greatest. Are the Government satisfied with the way in which grants for home renovations have constantly run out? In my constituency, the waiting list is, I think, eight years. Will the Government do something to help pensioners who, for example, do not even have an inside lavatory?
Old age, after all, should surely be a time for freedom, enjoyment, relaxation and reflection, which those of us who are fortunate enough to meet elderly people during our work as Members of Parliament have passed to us--usually to our great profit. It saddens me that the stock in trade of many conversations with elderly people who have much wisdom to contribute to our discussions starts with complaints about having to survive--about living on the breadline. We owe our pensioners more than that.
One area in which pensioners have faced particular difficulty, despite many benign and hard-working local authorities in Wales, is community care. I spoke about that recently in a debate in the House on 2 March and I shall not repeat what I said. There is a £71 million shortfall in the funding of community care in Wales and it has been drawn to the attention of Ministers time and again. It would be nice if we were to hear a helpful reaction for a change.
The experience of, for example, Gwynedd county council--which was praised by the Audit Commission for its community care--is that to provide an acceptable standard, it must overspend. It has been faced with an overspend of more than £1.2 million. The lesson that one draws from that is that it seems that the Government quite rightly want excellent community care, but are not prepared to pay for it. It seems that they are speaking with a forked tongue on that issue. The cost of care in care homes has already been raised. Some pensioners who leave hospital are being sold to the lowest bidder. They are either being sent to the cheapest care home that can be found, if they are well enough, or to the cheapest nursing home, if they are ill enough.
Although there are some excellent private sector care and nursing homes in Wales, there are also some awful examples. The system of inspection, scrutiny and accreditation is not good enough. People are suffering as a result, yet they are the people for whom we should have the most respect: the elderly.
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There is the whole question of the way in which capital is removed from elderly people. Although the Minister gave us some slightly labyrinthine hints of a review--no doubt as part of thebread-and-circus politics which will start on 28 November and entertain us until we have a general election--the situation at the moment is unacceptable.
Is it really right that a pensioner should have to spend all their hard- earned, hard-saved capital down to £8,000? Would not it be fairer if the Government took a different view of that issue and recognised that those savings have played an important part in our national wealth and the sustaining of the economy? Should not the Government take the view that it would be better to raise the cap significantly than to abolish inheritance tax, just to grab a few middle-class votes at the general election? I can assure the Minister that the elderly people of this country, especially those honest, decent, respectable people who have modest capital, but not huge capital, would appreciate such a change of policy.
I ask the Under-Secretary of State for Wales, the hon. Member for Clwyd, North-West, to explain why there is discrimination against local authority care homes in terms of the way in which residents are charged. It goes like this. If one goes into one of Powys county council's very good care homes, one is charged significantly more for care than if one goes into the average private sector home situated in the part of Powys that I represent. I realise that this is because the charges are made on a real-cost basis. However, many of the private care homes--not all of them--provide a lower standard of service, there are fewer staff, there are fewer experienced staff, there are fewer shifts--
Mr. Richards indicated dissent .
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Jonathan Evans) indicated dissent .
The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans) indicated dissent .
Mr. Carlile: I see two, perhaps two and a half Ministers on the Treasury Bench. What a lot of Ministers there are on the Treasury Bench at the moment shaking their heads. I issue an invitation for them to come to Montgomeryshire and to have a look. They should come and make the comparison. I see the Under-Secretary of State for Trade and Industry, the hon. Member for Brecon and Radnor (Mr. Evans), shaking his head. He may have criticisms of the county care homes in his constituency, but those criticisms would not apply in mine. The fact is that people who go into county care homes are having to pay £30 or £40 a week more for being residents there and there can be only one reason for that. What could that reason be? The only reason can be that the Government want the county care homes to go into the private sector or into a trust arrangement that they can regard as the private sector, thus taking yet more of that important community function away from elected representatives. That view has been expressed to me by social workers and by councillors of no political persuasion--independent councillors, some of great experience. It has been expressed to me by councillors of political persuasion too and it is a widely held view. The Government should not run away from the reality of it.
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The opportunity to debate policy on pensioners in Wales is welcome. I fear, however, that at the end of the debate, we shall not have made much progress in persuading the Government that pensioners deserve a better deal. I predict that pensioners will become a much more vocal force in this country than they are already. I predict that they will become a much more political force in this country than they are already. I predict that the Government will reap a sorry reward as a result.8.52 pm
Sir Wyn Roberts (Conwy): I am probably one of the best qualified to speak in this debate as I am a Welsh pensioner and I have been so since July this year. I have not been refused treatment by anybody in the national health service as yet and I am still working, as so many pensioners do in Wales and elsewhere. Perhaps that is just as well, as we are growing in numbers, as various hon. Members have said in this debate. We are aware of the danger of becoming an excessive burden on the working people of this country--the demographic time bomb to which my hon. Friend the Under-Secretary of State for Social Security, the hon. Member for Hertfordshire, North (Mr. Heald), referred.
I am glad that we have passed the Pensions Act 1995, which will equalise the state pension at age 65 for men and women, not in my time perhaps, but from 2010. That is a serious point. I am told that if the state pension ages were not changed, there would be just 2.2 working people per pensioner by 2030 compared with 3.3 now. The total number of pensioners will have risen from 10.5 million to 15.5 million. Those who have said that pensioners will become increasingly a political force are, I am sure, quite right, not just because I have just joined them.
Those figures are, of course, based on current projections; I am not sure that we have solved the problem completely. Projections can change, economic conditions can change and other factors, including the political situation, may change. All that may make it difficult for us to sustain our elderly people as we would wish. I was, however, delighted to hear my hon. Friend the Minister describe the situation that confronts this country in terms of the debt to gross domestic product ratio and to hear him say how much better the prospects are for the United Kingdom than for many other countries. I am also glad that we had last year's assurance from my right hon. Friend the Secretary of State for Social Security that the basic pension is there and rock solid, and that we have no intention of removing it now or in the foreseeable future.
Although more than eight in 10 pensioners now have income from other sources--an occupational pension, savings or investment--the state pension is still important for many people, as the hon. and learned Member for Montgomery (Mr. Carlile) stressed. The figures, of course, may be rather different in Wales. The answer is to target improvements in pensions and that too is very much part of Government policy, as is their commitment to protect the value of the pension against price rises.
During my 25 years in this House, I have known times when pensioners have really been up in arms and when the pensioners' voice was to be heard loud and clear. Those times were invariably the times of high inflation under the previous Labour Government, when pensioners saw the value of their savings being eroded. My only disappointment this evening is to have to record that Plaid
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