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Pensioner Incomes
4. Dr. Twinn: To ask the Secretary of State for Social Security what has been the change in real terms in the income of the average pensioner since 1979; and if he will make a statement. [14354]
Mr. Heald: Between 1979 and 1993, the average incomes of pensioners increased by 51 per cent. in real terms.
Dr. Twinn: Does the Minister agree that the rise in pensioners' incomes is a tribute to those who manage the private pension funds, and that the funds are managed in the best interests of pensioners? Does he share my concern that if these funds were to be diverted, perhaps to Government-controlled funds, they would be shifted to lower return projects--maybe projects of a political nature--that would cut pensioners' incomes? Is this not the policy of the Labour party?
Mr. Heald: Since 1980 the private pension funds in this country have had a real rate of return of more than 10 per cent. over inflation. The same is not true of state-run schemes, such as that in Singapore where the return is only 2 per cent. A pensioner in this country, who contributes the same amount as a pensioner in Singapore, will have four times the pension when he retires. That is why the Government are committed to the private sector schemes and why our achievement is so immense in this area.
Mr. Chris Smith: Why does the Minister simply talk about average pensioner incomes--as he always does? Does he not realise what has happened to those pensioners below the average, especially those who receive nothing but the state pension or income support? Has he seen the Institute for Fiscal Studies report that shows that income inequality for pensioners rose dramatically after 1979, and that the richest 10 per cent. of pensioners have five and a half times as much income as the poorest 10 per cent.? Is it not time to stop being complacent and to do
something to help the millions of pensioners who are below the average, and who are falling further behind under this Government?
Mr. Heald: As usual, the hon. Gentleman has carping complaints to make about the Government's performance. All pensioners have benefited under this Government. That is why the real rate of pensioners' income has increased substantially, even in the bottom quintile. The hon. Gentleman should look at the proposals that he is making--what is described as thinking the unthinkable. Hon. Members should look at the cost that the Labour party would impose on British industry and on pensioners, particularly with the stakeholder proposals. The hon. Gentleman should not get away with this, and he should not write letters to The Times withdrawing his ideas two months after he has had them.
Invalidity Benefits
5. Mr. Harry Greenway: To ask the Secretary of State for Social Security how many claimants are currently receiving invalidity benefits; at what cost to the Exchequer; what was (a) the number and (b) the costs in real terms (i) 10 years ago and (ii) 20 years ago; and if he will make a statement. [14355]
The Minister for Social Security and Disabled People (Mr. Alistair Burt): As at November 1995, just under 1.7 million claimants were receiving incapacity benefits at the short-term--higher--and the long-term rates, compared with invalidity benefit recipients of 450,000 in 1975-76 and just under 850,000 in 1985-86. The estimated annual cost to the Exchequer, as at last November, is £7.7 billion. At current prices, this cost was £1.9 billion 20 years ago, and was £3.7 billion 10 years ago.
Mr. Greenway: I congratulate my hon. Friend on introducing the Social Security (Incapacity for Work) Act 1994 which ensures that benefits go to those who are too unfit to work. Will he confirm that this measure, along with all the other measures introduced by the Secretary of State, has been opposed by the Labour party? Does not thinking the unthinkable mean spending the unaffordable?
Mr. Burt: Yes, it is very easy to express a wish, in general terms, to control public expenditure, but to actually take the steps to do so is rather hard--a clear difference between the quality of the Government and the noise of the empty Opposition.
Mr. Foulkes: I shall suggest something to the Minister that may receive all-party support--the suggestion by Pensioners' Voice and other such organisations that the Government might organise a campaign to encourage the take-up of benefits to which people are entitled. Will the Minister give serious consideration to introducing such a national campaign, as suggested by Pensioners' Voice, Age Concern and a large number of other voluntary organisations?
Mr. Burt: Nine pounds out of every £10 of benefit is already taken up. Extensive take-up campaigns are run by welfare organisations and others and at the end of the day only the smallest benefits are not taken up. We cannot
force people to take up benefit. The hon. Gentleman's concern for pensioners and the elderly would be rather more genuine had he protested more seriously about the inadequacies of the cold weather payment scheme when his party was last in Government and the damage that inflation caused them in the past.
Ms Lynne: Is the Minister aware that many people are denied incapacity benefit because the medical test is not strictly adhered to? In some cases, instead of being asked to pick up a kettle or saucepan of 1.7 litres, people are being asked to pick up an overcoat, and instead of picking up a tray, they are being asked to pick up a box of tissues. They have lost benefit and only won it back on appeal. Will the Minister look at the matter urgently?
Mr. Burt: The medical test is kept under strict scrutiny. There is a monitoring system to make sure that it is applied consistently. To date, Ministers have received no complaints such as the one that the hon. Lady has offered the House today. I am happy to receive a letter from her, but it is a matter of great concern to us that the medical test is applied consistently and well. I am pleased that the hon. Lady now appreciates the need for change in the medical test and perhaps she will be more supportive of the scheme in future.
Child Support Agency
6. Sir Mark Lennox-Boyd: To ask the Secretary of State for Social Security how many cases the Child Support Agency has refused to consider because they were already the subject of a court order. [14356]
The Parliamentary Under-Secretary of State for Social Security (Mr. Andrew Mitchell): Parents with a court order for child maintenance cannot come to the Child Support Agency for an assessment unless the parent with care is in receipt of a relevant benefit. They can, however, ask the court for a variation in the court order if they believe that maintenance under the existing order is inadequate. There is no business need for the agency to record how many child maintenance applications it receives and which it cannot consider for that reason.
Sir Mark Lennox-Boyd: Will my hon. Friend consider the plight of many women, such as my constituent Mrs. Dennett, who may enjoy the so-called benefit of a court order in favour of their children and cannot be helped by the CSA, but whose former husbands have paid no money for 10 years or more under that court order? They are thereby effectively denied justice by the system. Is it not ironic that a system that was invented to help such women in reality denies them justice?
Mr. Mitchell: My hon. Friend has raised with great diligence the case of his constituent, Mrs. Dennett, and I have looked carefully at it. Her court order precedes the establishment of the Child Support Agency, so she is unable to take advantage of it. Her difficulties demonstrate clearly why the House was right to introduce the Child Support Agency. I am afraid that she will have to return to the court to seek a variation as she is able to do under the system.
Mr. Llwyd: Can the Minister assist me? My constituent put in an appeal to the CSA appeal tribunal three months ago. After going through the details, he was advised to withdraw the appeal. The chairman replied that he would not allow the appeal to be withdrawn despite a month's notice having being given. What is the authority under law for that proposition and where is it based in common sense?
Mr. Mitchell: If the hon. Gentleman will write to me about the case, I shall certainly seek to assist him. There has been a significant improvement in the performance of the appeal system. Some 60 per cent. of appeals are now cleared within 13 weeks, but if he will write to me about the specific details that he raises, I shall ensure that he receives a proper answer.
Occupational Private Pensions
7. Mr. Dunn: To ask the Secretary of State for Social Security how many retired persons were in receipt of occupational private pensions in (a) 1979 and (b) 1995. [14357]
Mr. Heald: In 1979, 43 per cent. of pensioners were in receipt of an occupational pension. By 1993, the figure had increased to 62 per cent.
Mr. Dunn: While I welcome the significant increase in the number of those who enjoy occupational pensions, does my hon. Friend agree that those who receive occupational pensions and those who hope to enjoy them in future will be frightened out of their wits by the prospect of their pension funds--some £600 billion--being run for and by Government with the aid of the trade unions, which is Labour party policy?
Mr. Heald: If a Government forced individuals into a state second-tier scheme which had a stakeholder corporation involving the trade unions, they would kill the private sector that produces a rate of return far higher than that of state schemes. The contributions would have to be higher, as they are in Singapore and Australia. In Singapore, the contributions are double those in Britain and in Australia they are 12 per cent. In fact, it would be more take than stake.
Mr. Denham: To return to the real world, does the Minister recall the £1 million Government advertising campaign in 1988 that encouraged people to leave occupational pensions and the state earnings-related pension scheme? Will he admit that more than 1 million people who left their employers' schemes are now having to have their pensions reviewed at enormous cost? Does he admit that more than 3 million low earners left the state earnings-related pension scheme for personal pensions and that many of them will be worse off as a result? Will he admit that the difference between his side and ours is not about the benefit of funded pensions, but that the Conservatives waste people's hard earned savings and Labour will not?
Mr. Heald: One needs only to listen to the hon. Gentleman to realise that he prefers the state to the private sector. I certainly have no regrets that large numbers of
people now have personal pensions that will help them in retirement. That will mean more security for them than they had before.
Mr. Spring: Can my hon. Friend tell me how much money is tied up and invested in the United Kingdom funded private pensions? Can he confirm that the significant total is greater than for all the other European Union countries put together?
Mr. Heald: Yes. The European Community countries other than the United Kingdom have £480 billion invested between them. This country has £600 billion.
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