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4.28 pm
Mrs. Jacqui Lait (Beckenham): It is a great pleasure to take part in this debate and to hear the Minister of State lauding the achievements of the Conservative Government over 18 years, as many pensioners now retire on considerably more than the basic state pension. On the other hand, it is a shame that we had to listen to a typical Liberal motion. Many of us who have fought the Liberals in many elections will recognise the technique. The measure sounds supportive and costs a huge amount. As we discovered during the debate, their minds were changed halfway through the formation of their policy and they have ducked all the decisions.
The motion does not say what Liberal Democrat policy is, although the hon. Member for Northavon (Mr. Webb) tried hard to explain it. It smacks of the luxury of perpetual opposition, as do so many of their promises. They promised extra police officers and to double child benefit. They would take child support back to the courts--that would be £800 million. As we discovered this afternoon, they would use up the national insurance fund surplus. That would have a direct effect on the retail prices index.
All those measures would add significantly--
Mr. Corbyn:
Will the hon. Lady give way?
Mrs. Lait:
If the hon. Gentleman will allow me to complete what I was saying on this fairly substandard Liberal motion, I shall be delighted to give way.
Those combined changes would add a huge amount to public spending, which I am sure that the hon. Member for Truro and St. Austell (Mr. Taylor) will be keen to rein back when he does his sums for his Budget statement.
Mr. Corbyn:
Before the hon. Lady completes her litany of past mistakes, will she explain why, in 1980, the Conservative Government broke the link with earnings? Ever since, the pension has been deteriorating as a proportion of earnings. The whole pensioner community
Mrs. Lait:
Interestingly, we have heard the Minister explain why the Government are not restoring that link. Although the hon. Member for Islington, North (Mr. Corbyn) probably believes that everyone in Islington retires on only the basic state pension, as a result of our changes two thirds of all pensioners now retire on considerably more than that.
We have heard from the Government this afternoon great appreciation of everything that has been done in the past 18 years. The Minister expressed an intention to continue many of the things that we introduced. I should think that it is a great comfort to many pensioners that the Government have not yet tinkered with many of them. However, just last week--it was very opportune-- I received, from a constituent who has given me permission to use his name, a critique of the 75p by which the state pension is being increased. Mr. Frederick Pemberton, who lives in Beckenham, had written earlier complaining about it and then produced a critique of the reply that he received from the Department. He starts:
Mr. Pemberton's letter reflects the comments that I have heard from many pensioners. It would be wise for everyone to recognise that even affluent areas such as Bromley contain pockets of real deprivation and that pensioners, as reflected in that letter, feel badly let down.
Mr. John Cryer (Hornchurch):
Does this mean that the hon. Lady wants to take away the free eye tests that the Government have given pensioners?
Mrs. Lait:
I was merely pointing out that it has a marginal effect on any pensioner's income.
The minimum income guarantee, from which we hope that many pensioners can benefit--including the 600,000 who currently do not--is an extension of means testing, with all the problems that go with that. It is only for people on income support. Pensioners with any savings
do not qualify. [Interruption.] If that is not correct, I would be more than happy for the Minister to let me know.
Mr. Rooker:
I will correct what the hon. Lady said, because people listen to what we say in this place. She said that if a pensioner has any savings, he does not qualify. That is not true. There are capital limits of £3,000 and £8,000, and I have said that we shall address those figures--by implication, raising them--before the end of this Parliament.
Mrs. Lait:
I am delighted to learn that people with savings of £3,000 and £8,000 will benefit from the minimum income guarantee. However, 600,000 people do not claim the benefit for reasons that the much vaunted research has produced, but which many of us have known for many years. All the Government have done is waste money on research that has told us what we already know. People find the process of claiming for means-testing off-putting and they do not like the stigma attached to it. We have been aware of that, as have the Government, for many years. However, the right hon. Gentleman tells us that the Government will carry out yet more research to find out how they can best sell the minimum income guarantee. It will cost several millions more pounds to try to ensure that those 600,000 people benefit from it.
As I understand it, the recommendations in the report that was published on 13 December said that the most sensible, and probably the cheapest, way of ensuring that everyone knows about the minimum income guarantee is to write confidentially to all those who may be eligible for it. If it will cost several million pounds for the 600,000 pensioners who do not claim, it would be interesting to examine the administrative costs of the scheme.
We fundamentally object to the minimum income guarantee because it is a disincentive to save. Like the Under-Secretary of State for Social Security, the hon. Member for City of York (Mr. Bayley), I spent a large part of last year on the Committee considering the Welfare Reform and Pensions Act 1999, which introduced the stakeholder pension. Tomorrow, we shall start to consider the Child Support, Pensions and Social Security Bill, which will introduce the state second pension.
As I understand it, both pensions will be worth what people can already claim under the minimum income guarantee and housing and council tax benefits. If that is so, I will be dissatisfied. Who on a tight budget and with a small income will put money into either the stakeholder pension or the state second pension? Why bother? If people have to manage on a tight budget and the kids need shoes, who will put money into a pension? I have yet to receive an answer to that question from the Government, but it must be dealt with. There is no reason for people in such circumstances to buy into either of those pensions.
Mr. Campbell-Savours:
Can I trigger the hon. Lady's memory? Does she recall the great debates of the 1970s when Labour pioneered the state earnings-related pension scheme? That was 30 years ago, and the whole country looked forward to substantial pensions well into the future and past the millennium. However, does she remember what happened in the 1980s when I sat on the Opposition Benches and we watched SERPS being progressively
Mrs. Lait:
The hon. Gentleman must recognise that SERPS has been made affordable, as have private occupational pensions. They are just as important because more and more people wish to save outwith the Government's provision. They realise that, if they have a private pension over which they have control, they are not at the whim--dare I say it--of politicians. I support them entirely. It is infinitely better to be in control of one's own money.
Kali Mountford (Colne Valley):
Can the hon. Lady cast her mind back as far as last week and answer the question that was put to the hon. Member for Havant (Mr. Willetts)? If it is not possible for people to contribute to the state second pension or the stakeholder pension, how can people with earnings of less than £9,500 a year possibly afford a private pension scheme?
Mrs. Lait:
The hon. Lady has entirely missed the point. The state second pension and the stakeholder pension are not sufficiently attractive to encourage people to save. That is because of the package of benefits that they would otherwise receive. However, I have been generous with my time. To allow many other hon. Members to speak, I hope that I shall be allowed to draw my remarks to a relatively speedy conclusion.
The Minister of State referred to the problems that pensioners are having as a result of NIRS2 computer failings. I am reassured that those failings will be cleared up at some time during the coming year, as the Benefits Agency hopes. As my hon. Friend the Member for Havant (Mr. Willetts) has said, that is a year late already.
"This so-called Promised Land.
Mr. Pemberton continues:
Five per cent. VAT on fuel. This VAT cut is not specifically for pensioners, but for all households.
Twenty million pounds to improve cataract service. Fifty million pounds to boost cardiac care. Again the two services are for all the country.
Concessionary bus passes. As I live in one of the London boroughs I receive a free bus pass. This scheme has been in existence for at least 12 years.
The home energy efficiency scheme and locks and bolts. This applies to 150,000 pensioners. That works out at 0.13 per cent. of pensioners in the country. As a home owner, I do not qualify."
"Ten pounds for the free eyesight test. As pensioners only purchase spectacles once in five years, this generous grant works out at 4p a week.
He went on to say that his and his wife's income will increase by 1.1 per cent. plus the winter fuel payment, which makes a total of £3.40 a week.
Free television licences. Thousands of homes in the country have a pensioner over the age of 75 living with them. They are the ones who will also benefit from the free licence."
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