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10.14 am
Mr. Eddie O'Hara (Knowsley, South): I, too, congratulate the hon. Member for Sutton and Cheam (Mr. Burstow) on securing this debate and providing hon. Members with an opportunity to draw attention to various matters of concern. We must be aware of the context in which this debate is taking place, and I join my hon. Friend the Member for Normanton (Mr. O'Brien) in congratulating the Government on doing more than any Government in recent history, and certainly more than the previous Government, to alleviate pensioner poverty. It is telling that there is not a single Conservative Back Bencher present for this debate.
I shall save time by not dwelling on the benefits that the Government have introduced, some of which have already been mentioned: the reduction of value-added tax on fuel, the universal winter fuel payments, the minimum income guarantee, tax allowances which take another 200,000 pensioners out of taxation--on top of the two thirds who already pay no tax--free eye tests, moves towards more and universal concessionary travel and many others which my hon. Friend the Minister will perhaps mention. Let us not forget that the Government have already made enormous advances in alleviating pensioner poverty, but I want to draw attention to some remaining concerns, make some appeals and perhaps offer advice to the Government as to how they might target future action further to alleviate pensioner poverty.
One concern is that the gap will continue to widen between pensioners and the rest of the population. It has already been pointed out that although the minimum income guarantee will now rise in line with earnings, for which we are grateful, the basic state pension will continue to be linked to inflation.
I am concerned to ensure that future pensioners should be allowed what I call, although it is not my own term, active ageing. That means being allowed to enjoy health and mobility and, indeed, in their pre-retirement years, employment which allows them to make provision for their old age. My hon. Friend the Member for Normanton mentioned access to information and entertainment in connection with the television licence.
The minimum income guarantee is welcome, but there are well-known concerns about it. It causes much confusion among older people, many of whom think that it is the same as the state pension, when of course it is not. More than 1 million pensioners do not get the minimum income guarantee--700,000 of them because, as the hon. Member for Sutton and Cheam said, they do not claim the income support to which they are entitled. A further 600,000 do not receive it because they have savings in excess of £3,000.
In that connection, I remind my hon. Friend the Minister of an answer he gave on 13 April to a question from my right hon. Friend the Member for Birkenhead (Mr. Field). My right hon. Friend asked how much it would cost to buy an annuity now which would give an income equal to the state pension
Age Concern conducted a survey of pensioners and health. There is certainly a perception among pensioners that there is discrimination on grounds of age in some parts of the national health service. Ill health is expensive and contributes to poverty.
My hon. Friend the Member for Normanton said much that needed to be said on the question of mobility and about the need to provide the transport for which increased concessionary travel will be available. I remind the Minister that many old people have large cars because of their disability--for example, they may need to transport a wheelchair--but they cannot claim the new concession on vehicle excise duty. Also, if they have large cars, they suffer from the increase in the price of petrol above the rate of inflation every year. There may be ways in which pensioners can be helped with that problem.
With regard to employment, I mentioned that if people lose their jobs in the years leading up to old age, they lose the opportunity to prepare for old age. The Government must intervene actively where necessary to help older people into employment. It is pleasing that the new deal is now taking account of people over 50.
I shall deal briefly with other concerns. Some older people will be taxed at 20 per cent., even though they fall within the 10 per cent. tax band, because the tax on savings will not be reduced. In addition, the Minister will be aware of the long, hard campaign that I and others have waged on the issue of reclaiming tax credit on dividends.
The abolition of the widows bereavement allowance particularly affects older widows. The abolition of tax relief on new home income plans reduces the opportunity for some older people to realise capital tied up in their houses to increase income.
I have an early-day motion on the Order Paper today drawing attention to the fiasco of the 1986 decision to reduce to 50 per cent. widows' and widowers' entitlement to inherit SERPS. That decision was not publicised by the Department, so between 1986 and 1999 pensioners have been planning for the future on the basis of wrong information. I appeal to the Government to sort out that mess as quickly as possible.
The overall picture shows some darts well aimed by the Government. Much help has been given to all pensioners, and much more immediate help to the most needy, but more needs to be done in future Budgets. Millions of
responsible, deserving pensioners are penalised by an array of relatively small losses as a result of recent taxation measures.
Mr. Quentin Davies (Grantham and Stamford):
The hon. Member for Sutton and Cheam (Mr. Burstow) is to be warmly congratulated by the House on having seized the initiative and secured the debate on such a timely issue, which is of immediate concern to millions of our fellow citizens.
We have had an extremely interesting debate. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) produced numerous facts and figures. It was useful for our debate to be informed by precise information and by the personal cases of the hon. Gentleman's constituents. It is a fundamental task of this place properly to reflect our constituents' view of the world. The hon. Gentleman made an excellent speech.
We heard some extremely interesting remarks from the hon. Members for Normanton (Mr. O'Brien) and for Knowsley, South (Mr. O'Hara). There were the ritual genuflections to their own Front Bench, a few nasty things said about the Tories and a few quotes from the latest Millbank tower handout, but the broad thrust of their contributions was a damning critique of the Government's actions or inaction in respect of older and retired people: inaction in the case of concessionary television licences, buses--a matter that the hon. Member for Normanton was right to raise--and age discrimination in various cases cited by the hon. Member for Knowsley, South.
I was particularly struck by what the hon. Gentleman said about age discrimination in the job market and in the national health service. I introduced a private Member's Bill on that subject in the previous Parliament. The Labour party made a number of commitments before the last election. During parliamentary questions last November, the Prime Minister made a commitment to me to legislate on the matter, but, so far, nothing has been done. The indictment of the Government's inaction is well deserved.
The hon. Members for Normanton and for Knowsley, South were even more critical of the Government's failure to restore the earnings link, which was the thrust of the Labour party's propaganda in opposition, and of the Government's great extension of means-testing.
There was a good joke this morning from the hon. Member for Sutton and Cheam. I am sure that it was a deliberate joke; it was certainly very amusing. The hon. Gentleman asked whether the Treasury had consulted the Department of Social Security about the Budget. I have been in my present job for only a few months, but that is
long enough to realise that the Treasury does not consult the Department of Social Security about anything--the Treasury gives orders to the Department.
Policy on matters such as pensions and welfare is made entirely in the Treasury. The Benefits Agency hands out the money in the country, and the only role of the Minister of State and his ministerial colleagues is to defend the indefensible in the House and elsewhere. That is an unenviable role and some of us might consider it unedifying as well, but that is the role in which they have allowed themselves to be cast. Let us have no doubt about who is calling the shots on policy.
There is profound concern among retired people and those approaching retirement for all the reasons that have emerged during the debate. People are wondering what is going on. The answer is that the Government are engaged in making colossal fools of older and retired people. Before the last election and for many years previously, all the propaganda suggested that Labour would restore the earnings link. I had that thrown at me at public meetings and on the doorstep during the election campaign. Millions of people voted for the Labour party in that expectation and the Government have defaulted on it.
The Labour party has always shared with us scepticism about means testing. During my time in the House, I have heard eloquent and persuasive speeches from Labour Members about the unfairness of means testing and the damage that it does to a sense of social responsibility and to the incentive to save. Perhaps the Government had a secret agenda, but no one was prepared for what has happened. There has been the most colossal extension of means testing since the 1930s. The worst aspect has been the extension of that to pensioners.
Most extraordinarily, the Chancellor declared as recently as 1993 at the Labour party conference:
"in 15 years' time, assuming that the basic pension is raised in line with prices, the minimum income guarantee is raised in line with earnings"
and so on. The answer was that it would cost
"£15,000 in 1999 earnings terms, or £19,000 in 1999 prices"
to purchase an annuity now which would provide
"an income equivalent to the difference between the basic State pension and the Minimum Income Guarantee".--[Official Report, 15 April 1999; Vol. 329, c. 151.]
I remind my hon. Friend that 600,000 pensioners are not entitled to the MIG because they have savings in excess of only £3,000. I ask the Government to bear that in mind.
"I want the next Labour Government to achieve what in 50 years of the Welfare State has never been achieved. The end of the means test for our elderly people".
In fact, as I said, he has brought about the most colossal increase in means testing for elderly people since the 1930s, of which the Government should be thoroughly ashamed.
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