| Previous Section | Index | Home Page |
1.15 pm
The Minister of State, Department of Social Security (Mr. Jeff Rooker): I am glad that my hon. Friend the Member for Blaenau Gwent (Mr. Smith) secured this debate, and I congratulate him on raising the issue so early after the recess. I am also glad about what he said in his last sentence, because I, too, will be on the Government Benches when the Chancellor makes his Budget statement in due course, and many of the issues that my hon. Friend has mentioned are for my right hon. Friend to decide. Clearly, my hon. Friend will not expect me to make a Budget statement today. However, I will do my best to deal with some of the issues that he has raised.
I make no apology for taking as my theme one of the first points that my hon. Friend made. He was, I believe, paraphrasing Nye Bevan when he said that we should prioritise our attack on pensioner poverty. That is what the Government intend to do. We cannot have more than one priority. If we are to prioritise our attack on pensioner poverty, pensioners who are not in poverty will not be the priority. That is self-evident, but it has to be said.
My hon. Friend made some fair comparisons when he talked about the way in which things have developed in the past 20 years. Those are fair and appropriate points. Since 1979, pensioners' average incomes have grown, but the fact remains that inequality among pensioners has also grown. A significant number of people have been left outside the improvements in general living standards. It is because we are not prepared to leave things like that that we intend to prioritise the issue.
I shall try not to use too many statistics, because sometimes they get in the way of the argument. However, the incomes of the least-well-off 20 per cent. of single
pensioners have risen by only 28 per cent. since 1979, whereas there has been an increase of 80 per cent. for the richest 20 per cent. of pensioners. One can see that there has been a widening gap.
In the poverty report that we published three weeks ago, entitled "Opportunity for all--tackling poverty and social exclusion", we said that there had been a widening gap of inequality in society. That includes the gap between the poorer and the better-off pensioners, and the main reasons for that gap are the tremendous increase--162 per cent.--in the real value of occupational pensions and the rise of more than 100 per cent. in investment incomes.
As a result, the proportion of pensioners dependent on means-tested benefits fell from 57 per cent. in 1979 to 40 per cent. in 1996-97. I shall return to the issue of take-up later because, as my hon. Friend said, it is crucial.
At the moment, 28 per cent. of recently retired pensioners are means-tested in the widest sense, in that they are on state benefits. Talk of certain types of welfare reform and help with savings is much too late for those people. We need two separate policy initiatives, one for today's pensioners and one for tomorrow's pensioners. Many of the issues that my hon. Friend raised relate to today's pensioners, who need help now to enjoy a decent retirement. The Government have taken action in many areas, and will continue to do so.
I claim no special rights in this respect, but I was a Member of Parliament between 1974 and 1979, and I know that the link with earnings rather than prices lasted for only four years; it was a very short period. Indeed, when I was first elected, pensions were not even uprated annually. I believe that there was one period of two or three years in which pensions did not change.
We made it clear in our manifesto commitments that the basic pension would remain, would not be means-tested and would be raised in conformity with the rise in prices. I am not picking and choosing among our manifesto commitments, but I cannot pre-empt what my right hon. Friend the Chancellor will say in his statement about social security benefits next year, because that statement has not yet been prepared. However, my right hon. Friend is required to take into account a range of factors, including recent changes in the retail prices index.
Mr. Smith:
Pensions may be linked to prices in future. Is the Minister saying that the 75p increase for a single pensioner next spring will be adequate, taking into account the possible price rises by that time?
Mr. Rooker:
No; I am saying that there is press speculation, and everyone knows the level of the retail prices index. A statement will be made in due course, as normal. We are not required to make a statement until the second or third week of November. I do not know when that statement will be made, but it will be made at the appropriate time and in good time. At this time, I shall not debate whether that increase should be one figure or another.
There are now just under 11 million pensioners. Over the next 30 years, that figure will increase to almost 15 million, and there will be fewer people of working age. We must consider those long-term issues. We must also provide a help package to today's poorest pensioners.
My hon. Friend referred to the minimum income guarantee. No pensioner in any hon. Member's constituency, whether or not he or she is listening to this debate, should have a total weekly income of less than £75 a week, provided that they have no more than £3,000 in savings. However, we know from estimates that there are several hundred thousand pensioners who receive less than £75 a week, and we can correct that situation.
There are difficulties in the take-up of benefits. We have done more to solve those problems than previous Governments and have recently published research onthat subject so that we can introduce a specific Government-led campaign to reach those pensioners. Ministers cannot simply say that the minimum income guarantee exists so no pensioner should be receiving less than £75 a week, without introducing an active, positive campaign to seek out every one of those poor pensioners, and that is what we intend to do. The basic figure for the minimum income guarantee is £75 a week, and the figure will be higher for older pensioners and those who are disabled. About 1.5 million pensioners have already benefited. Single pensioners have gained £160 a year in real terms.
The Chancellor has made it clear that the guarantee will be increased in line with earnings. That is important for today's pensioners, but it has consequences for our plans for stakeholder pensions and the state second pension, which we must tackle in due course. We are prioritising our attack on the poverty of today's pensioners. The guarantee means that pensioners over 80 will be more than £400 a year better off after two years of increases. No one can argue that we are not taking action.
We have just published a large programme of research into why some pensioners do not claim benefits. I regret, as do the Government, that we cannot run the campaign this autumn. It must take place early next year. It is not possible for the Benefits Agency to carry out that work before Christmas. We are preparing for that campaign and we shall ensure that it is effective. We must focus on building links with partner organisations, including those in the voluntary sector and local authorities. Pensioners who are identified as being potentially entitled to benefit will be issued with a specifically tailored leaflet that will provide information. There is no leaflet and no application form relating to the minimum income guarantee. The relevant application form is that for income support, which is 40 pages long.
It is not necessary for pensioners to visit a benefits office to claim the minimum income guarantee. If they do not want to go to the office, the information can be taken over the telephone or during a home visit. I encourage hon. Members to make that abundantly clear to pensioners in their constituency who argue that they do not want to go to the social. We shall explore ways to work on a permanent basis with our partners in local government to offer pensioners services relating to benefit entitlement.
My hon. Friend referred to the capital limits for the guarantee as a disincentive for saving, including saving for long-term care. We recognise that those limits can appear to be--and are--unfair to those who have saved. The present capital limits, which have been frozen for a considerable time, have been a disincentive and send the wrong message to the people who will be the next generation of pensioners. The message is that it does not pay to save, which is the exact opposite of the message that the Government seek to send out. We are therefore
considering the rules on capital. They are not straightforward because there are different rules for different benefits. We shall make an announcement on that as soon as possible. I regret that I cannot give a date for that.
Our package for pensioners is not only for those who are the least well off. As my hon. Friend acknowledged in an earlier meeting, the £100 winter fuel payment will go to all pensioner households and is not means-tested. People do not need to apply for that payment, which will be paid to 10 million pensioners in 7 million households before Christmas. That is a substantial increase on last year's payment. Pensioners are not a homogenous group and one cannot treat them as such, but, by and large, that payment should mean that people should not be afraid to keep warm this winter.
My hon. Friend mentioned SERPS. Many people retiring today, who have been fortunate enough to have 20 years' work, will receive SERPS. SERPS is not to be sniffed at, despite the previous Government's attack on the system in 1986. The average male retiring today will receive £49.44 a week from SERPS, and women will receive between £22 and £24. That is a tribute to the planning of the previous Labour Government. Unfortunately, it is not possible to turn back the clock and reverse what happened in 1986. We are grappling with the major problem of the mis-selling of pensions and the changes to SERPS for widows, which the previous Government deliberately hid for over a decade. We must get to grips with that within the next three weeks because of the Welfare Reform and Pensions Bill, which is being considered in the other place. That legislation may entail the expenditure of billions of pounds.
| Next Section
| Index | Home Page |