House of Commons
Tuesday 23 April 1996
The House met at half-past Two o'clock
PRAYERS
[Madam Speaker in the Chair]
Oral Answers to Questions
SOCIAL SECURITY
Habitual Residence Test
1. Mr. Pike: To ask the Secretary of State for Social Security how many outstanding appeals there are under the habitual residence test; and if he will make a statement. [24669]
The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans): Statistics on appeals are collected by the Independent Tribunal Service which does not record the reason for the appeal.
Mr. Pike: Does the Minister agree with the view of the National Association of Citizens Advice Bureaux that, because there is no straightforward definition of the habitual residence test, many cases have to go to the adjudication officer and are ultimately revised? Is that not an absolute waste of money and time, and does the Minister agree that it prevents people who are entitled to benefit from getting it as speedily as they should? Should not there be an urgent review to remedy that?
Mr. Evans: It is not a waste of time: it is an important measure to save public money and to prevent the kind of abuse that happened when Spanish holidaymakers were claiming income support in England. The habitual residence test is well founded in European law and we are entitled to introduce it to protect the British taxpayer. Nobody has come up with a better alternative suggestion, and I can only conclude from the hon. Gentleman's words that his party proposes to abolish this necessary protection for the British taxpayer.
Mr. John Marshall: Does my hon. Friend accept that most people believe that ending benefit tourism is a great bonus for the taxpayer? Is it because of a desire to help benefit tourists that the Labour party proposes to get rid of child benefit for those who are over the age of 16?
Mr. Evans: My hon. Friend speaks on St. George's day for England, as ever. The second part of his question contains a most interesting challenge, and we wait to see what Labour Front-Bench spokesmen can possibly give by way of an explanation.
Mr. Bradley: May I press the Minister a little further on the figures that are contained in the excellent report by
the National Association of Citizens Advice Bureaux? Is he aware that well over 5,000 British nationals have been left without financial support because of the habitual residence test--a test that the Government said was meant to root out only benefit tourism? Is it not clear that the test is not rooting out those who do not genuinely deserve such benefits, but that only British nationals who are returning home are being hit by the policy? Will he again review the test to ensure that such British nationals receive income support and other benefits to which they are genuinely entitled?
Mr. Evans: All aspects of policy are always under review, but this policy appears to be working. Between August 1994 and February 1996, 91,424 British nationals passed the test and 9,191 failed it; 13,392 European economic area nationals passed it while 13,487 in that category failed it. The system protects British interests, and nobody has yet produced an alternative that is acceptable in European law.
State Pension
2. Mrs. Lait: To ask the Secretary of State for Social Security what is the cost of the state pension (a) at present and (b) in 1979 in real terms. [24670]
The Secretary of State for Social Security (Mr. Peter Lilley): Since 1978-79, expenditure on state pensions has increased in real terms by about a third--from £22.6 billion to £30.1 billion in 1995-96.
Mrs. Lait: Does my right hon. Friend agree that if the earnings link was restored that figure would be increased by about £8 billion a year, which is equivalent to some 5p on the basic rate of income tax or to an increase in VAT to 22.5 per cent? Is it not a cruel hoax on pensioners to suggest that that earnings link could be restored, as was promised by the Labour candidate in Hastings and Rye?
Mr. Lilley: My hon. Friend makes a good point. It will be interesting to see whether Labour Front-Bench spokesmen repudiate the promises that have been made by Labour candidates in Hastings and Rye and elsewhere which would cost the British taxpayer the equivalent of several pence on the basic rate of tax. Until they repudiate that policy it will hang round their necks like an albatross.
Mr. Sheerman: What does it say about poverty in our country when, in 1979, the state pension was 23 per cent. of average earnings and is now 17 per cent? That represents something chilling for elderly people in our country.
Mr. Lilley: The hon. Member seems to think that pensioners should and do rely solely on the basic pension. I am happy to say that an increasing proportion have additional resources on top of that. As a result, pensioners' incomes as a whole have risen more rapidly than those of the population as a whole. We have made extra provision for those at the bottom: we have provided £1.2 billion a year extra through income-related benefits for people who, by misfortune, do not have any resources of their own on top of basic pension. Our record stands in good comparison with anything that the last Labour Government achieved.
Pensioner Incomes
3. Mr. Butler: To ask the Secretary of State for Social Security what percentage of the bottom tenth of incomes was accounted for by pensioners in 1979; and what is the equivalent figure for the latest year for which figures are available. [24671]
The Parliamentary Under-Secretary of State for Social Security (Mr. Oliver Heald): In 1979, pensioners represented 31 per cent. of the bottom 10th of the income distribution, after housing costs. By 1992-93, that figure had fallen to 8 per cent.
Mr. Butler: That shows that not just in absolute, but in relative terms, under this Government, the treatment of pensioners has been far better than under the preceding Government and far better than pensioners could hope for under any succeeding Labour Government, were such a disaster to hit the elderly population again. When my hon. Friend and I come to draw our pensions, will they be funded substantially by private pension funds, which exist in Britain, but not elsewhere in Europe? Can he put a figure on that?
Mr. Heald: I am grateful to my hon. Friend for making those points. The Government's policy is to maintain the basic state pension's value, to encourage the private sector and to target help on people most in need. The amount targeted has already increased by £1.2 billion since 1988. The number of pensioners with occupational pensions is up from 43 per cent. in 1979 to 66 per cent. among the recently retired, with an average £75 per week for that occupational pensioner. My hon. Friend can do the mathematics himself, but, on such a rate of increase, the Conservative Government have given pensioners a better future than they would have had under Labour.
Mr. Frank Field: Which poor people have stepped into the shoes of pensioners who have left the lowest decile?
Mr. Heald: There are those who say that a pot is half full and those who say that it is half empty. These days, the hon. Gentleman is obviously putting himself in the latter category. That is rather a change of heart--he used to be a bit more optimistic. During the 1980s, pensioners have improved their position. Their average incomes are up by 50 per cent. That is an answer in itself. The pensioners have done better under the Conservatives.
Mr. Waterson: Does my hon. Friend agree with me that one of the greatest contributions that a Government can make to pensioners' real incomes is to keep prices low? Will he remind me at what point in recent years inflation reached a level of over 27 per cent?
Mr. Heald: I am happy to remind my hon. Friend that the last Labour Government put this country in that parlous position, robbing pensioners of their savings through high inflation. The Government have had the longest period of sustained inflation--[Interruption.] Sorry, low inflation--for 50 years. Opposition Members may laugh, but it would be the longest period of sustained inflation if they ever had a chance to run the country.
Ms Lynne: Is the Minister aware that approximately one third of eligible pensioners are not claiming
income-related benefit to which they are entitled and that, of those, 114,000 are in the north-west? Will he join Age Concern and other pension organisations in an awareness campaign so that pensioners take up their rights?
Mr. Heald: I am grateful to the hon. Lady. This morning, I met Age Concern and was able to discuss that issue, among others. The Government are spending about £25 million on giving information about benefits. They are providing information to 80,000 outlets about the benefits that are available to people. Obviously, it is important that the information on the new benefit payment cards is clear and helpful to pensioners. We discussed that. Taken together, the measures represent a substantial commitment to telling pensioners what benefits are available to them. The Government are committed to that.
Mr. Wicks: Is not the Minister deliberately ignoring the facts about the poorest people in Britain? Is it not true that in Tory Britain poverty now wears a young face, often a child's face? There are 3 million families with children--[Interruption.] I shall repeat; there are 3 million families with children in the bottom tenth of income distribution. Would the Minister care to bring up a child on income support levels? Why have the Government deliberately created mass child poverty?
Mr. Heald: The hon. Gentleman puts his argument at the most exaggerated level possible, but that is typical of the Labour party. Only the other day the shadow Chancellor explained his ideas about child benefit for 16-year-olds and said that 80 per cent. of the children of unskilled parents leave school at 16. That information is 20 years old. Under the Conservatives, 50 per cent. or more of those children go on to further education. That just shows that the Labour party does not get its facts right. On poverty, under Labour--[Interruption.]
Madam Speaker: Order. The hon. Gentleman must be responsible for Government policy.
Mr. Heald: I was asked about poverty and the hon. Gentleman said that there was poverty in Britain. It is worth making the point that there is a difference between income support levels and absolute poverty. One of the points that is made constantly by Opposition spokesmen, as it was a moment ago, is that poverty can be measured against income support levels. That is ludicrous because it would mean that every time we increased income support, we increased poverty.
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