House of Commons Hansard Debates for 17 Jan 2000 (pt 14)

Mr. Coaker: If there is such a problem with means-tested benefits, why is it that in my surgeries claims by pensioners for means-tested benefits such as housing benefit or council tax benefit are not affected? There is an attitudinal problem, but debates in which we continue to talk about stigma and income support will not help.

Mr. Leigh: I cannot accept that. I am not making the facts up: they come from the Government's document. Those applying for means-tested benefits are often younger people, many of whom are out to get every benefit they can. There is nothing wrong in that, if they are entitled to the benefits. However, those younger people are very different from the older people who were brought up in a fine tradition and who are proud to be pensioners. They feel that they have paid their debt to society, worked all their lives and looked forward to retiring. They feel that it is a judgment against themselves to have to apply for means-tested benefits and they do not want to do so. I am not making the situation worse by talking about it, because we have to be honest and address it. There is something wrong with our social security system.

On the other hand, our pensioners are generally doing very well. The statistics come pouring in, but they show that the richest pensioners have become some 80 per cent. better off over the past two decades. Even the poorest pensioners, thanks to means-tested benefits, are a third better off. In material terms, pensioners may be better off, but whether they are happy about how that has been achieved is another question.

Mr. Webb: I am grateful to the hon. Gentleman for his introductory remarks. Does he accept that the statistics are misleading, because they do not follow an individual pensioner over time? Over time, individual pensioners see their incomes maintained or falling, as inflation erodes the real value of their income, but the averages include the fact that the poorest old pensioners have died and the newly retired ones have whopping great occupational pensions. The averages shoot up, but any given pensioner is seeing not 30 per cent. rises but steady real-terms falls.

Mr. Leigh: The hon. Gentleman makes a fair point. We should be very cautious about accepting the many statistics that are given to us. The statistic that I have just cited has appeared in many briefing notes over the years and is a good little quotation to bring up in defence of the Government of the day, but it may not accurately reflect the experience of an individual pensioner.

Mr. Bercow: Do not poor take-up rates underline the need for Governments to do everything in their power

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to minimise unavoidable pensioner costs? Would not one effective way in which to do that be for the Government to work to the maximum to change fundamentally that charter for amoral pilfering otherwise known as the common agricultural policy?

Mr. Leigh: I shall not go down that route, Mr. Deputy Speaker, as I know that you would take me to task. However, my hon. Friend is right to say that our country has a tradition of fair and uncorrupt Government.

The Liberal Democrats may be right to say that it is an insult to pay pensioners an April increase of only 75p for the year, when the economy is supposed to be doing well. Perhaps we could afford £1, although I do not want to go too far. As the Minister said, pensions have not always increased in line with inflation: sometimes they have risen by more, sometimes they have not moved at all. No hard and fast rule states that the 75p increment cannot be changed.

The case can be argued in terms of what can be done immediately to help pensioners, and what can be done in the long term. Our room for manoeuvre for helping existing pensioners may be limited, but the long-term prospects are much more exciting and interesting because the future allows more room for manoeuvre.

The previous Government succeeded in changing people's attitudes. Philip Booth, in Economic Affairs, said:

"The OECD looked at long-term budget deficits and national debt figures for various countries, on the assumption that their state social-insurance schemes remain intact. The estimates were based on the assumption of 1995 policies continuing. By 2030, Germany was projected to have a budget deficit of 9 per cent. of GDP and a debt:GDP ratio of over 100 per cent. Figures for France were similar. Italy was projected to have a budget deficit of 30 per cent. and a debt:GDP ratio of 120 per cent. The UK had a projected budget surplus and a projected debt:GDP ratio of below 10 per cent."

One of the Conservative Government's greatest achievements was to increase dramatically the resources put into private pensions and occupational pensions. I want that sort of response to continue.

I am talking about the long term, and what I propose will not have any direct benefit for today's pensioners. However, I hope that the next Conservative Government will build on the work of this Labour Government, who are trying to create a basic pension system that raises people above means-tested benefits. The Government argue that that is what the stakeholder pension and the second pension will do, but there are more creative ways to give people a choice about where their money should be invested.

People's money should be invested in their own personal funds. People should be allowed to retain those funds in the public sector. They should have the right to insist on that. Alternatively, they could go into a mutual friendly society, or into a private insurance scheme. The result would be a personally funded system, which the Government could not attack as they have attacked the SERPS principle. However, I accept that that is a long-term solution and that it does not help the immediate problem.

Earlier, I talked about the workhouse. I have often noted that Labour Members of Parliament explain their calling by referring to a novel--"The Ragged Trousered Philanthropists", by Robert Tressell--that moved them in

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their youth. I read the book last year, as in the House it is important to know one's enemy. It is a very good book, and I commend it, although there are some boring passages about socialist ideology. If Robert Tressell were alive today, I am sure that Alastair Campbell would give him a quick telephone call to say that he had never written the novel.

The hon. Member for Islington, North (Mr. Corbyn) is in his place. He has read the novel, and approves of it. One character is called Jack Linden, formerly a fine worker but now old and unable to work. He is thrown out of employment and has no money, so he has to ask the local community for help. The book says that on a Wednesday the secretary of the Organized Benevolence Society called at the House, and on the Friday

"Jack received a letter from him to the effect that the case had been duly considered by the committee, who had come to the conclusion that as it was a 'chronic' case they were unable to deal with it, and advised him to apply to the Board of Guardians. This was what Linden had hitherto shrunk from doing"--

he was a pensioner of 67--

"but the situation was desperate. They owed five weeks' rent, and to crown their misfortune his eyesight had become so bad that even if there had been any prospect of obtaining work it was very doubtful if he could have managed to do it. So Linden, feeling utterly crushed and degraded, swallowed all that remained of his pride and went like a beaten dog to see the relieving officer, who took him before the Board, who did not think it a suitable case for out-relief, and after some preliminaries it was arranged that Linden and his wife were to go into the workhouse, and Mary"--

their daughter--

"was to be allowed three shillings a week to help her to support herself and the two children. As for Linden's sons, the Guardians intimated their intention of compelling them to contribute towards the cost of their parents' maintenance."

Those appalling conditions existed in this country at the beginning of the last century. I am not, of course, arguing that the Government are forcing anybody into a workhouse. We live in a prosperous society, in which people are helped through means-tested benefits. But many pensioners feel that they are being forced into a workhouse--they have paid their way all their life, yet when they retire at the age of 65, they find that they have to go cap in hand, just like Jack Linden, to ask for a means-tested benefit. That is simply not fair or right.

5.36 pm

Ms Oona King (Bethnal Green and Bow): I am pleased to have the opportunity to speak in the debate, because I represent a constituency where the gap between the needs of pensioners, and the support that they receive, is one of the widest. If any Opposition Member doubts the effects of 18 years of Tory slash and burn on our public services, I invite them to come with me to visit Bethnal Green, Whitechapel, Wapping, Bow or Stepney. Pensioners in those areas--which were, incidentally, bombed in the second world war--spend much of their time in my constituency surgeries telling me of the gap between their needs and the support that they receive.

Deprivation in Tower Hamlets is not confined to young families living in damp, overcrowded flats, with no one in work and little prospect of employment. In fact, I would say that social exclusion is felt most acutely by my elderly and vulnerable constituents who spent their whole lives

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working, looking forward to retiring with comfort and dignity. Of course, they do not have the opportunity, as younger constituents do, to benefit from the Government's new deal for the unemployed, although they benefit from many of the new measures that the Government have introduced, to which I shall come.

It remains the case, however, that many pensioners have no chance of enjoying a retirement in the comfort and dignity that they hoped for. We must be honest and recognise that, for many, retirement continues to be a daily struggle to make ends meet. There is certainly little left over at the end of each week to enjoy the things that many of us in the working population take for granted. I will never forget an elderly constituent who came to one of my first constituency surgeries and said, "I must speak with you, because my rent has gone up from £29.50 a week to £29.70." My maths is not great at the best of the times; however, it was obvious that this man had queued for four hours to tell me that his rent had gone up by 20p a week. Most of us in the Chamber might drop a 20p piece on the floor and continue walking--we certainly would not queue for four hours to speak to our Member of Parliament about losing that amount. So I hope that this debate will take into account the reality of many pensioners' lives.

We must also recognise that many pensioners sit at home in fear. They are afraid not just to go out because of crime, but to stay in their own homes because of crime, so often linked to drugs. They are afraid of becoming ill or disabled and of needing long-term care that they cannot afford.

The Government have taken essential and well- publicised steps to address the needs of pensioners through many measures. Those include the £100 increase in winter fuel allowance, the restoration of free eye tests, the introduction of free television licences for the over-75s, increased funding for the health service and for local authorities' social services departments and, most importantly, the introduction of the minimum income guarantee for pensioners.

I was going to discuss my concerns about the increased investment that we want over the next two years in the health service but, in the light of the Prime Minister's welcome commitment to increase health spending year on year until the proportion of our gross domestic product spent on health is in line with the proportions in other western countries, I will confine myself to the amount of money that pensioners have to live on.

I wholeheartedly welcome the introduction of the minimum income guarantee, which fulfils our manifesto commitment to help the poorest pensioners. I particularly welcome the commitment made by my right hon. Friend the Chancellor of the Exchequer to ensure that the guarantee will rise in line with earnings, rather than inflation. Many hon. Members meet pensioners who do not realise that they are entitled to an income support top-up to bring them up to the amount of the minimum income guarantee. I pay tribute to Tower Hamlets Age Concern and other organisations that raise awareness of the guarantee and help to guide my constituents through the benefits maze to ensure that they receive their entitlements. I hope that all hon. Members will remind pensioners who come to see them that the minimum income guarantee can be claimed in writing or by

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telephone. Complicated application forms often put pensioners off making claims, and I am certain that the Government's improvements will help.

Other pensioners, particularly the oldest, who remember the means tests of the 1930s, are often put off claiming minimum income guarantee because a stigma is attached to income support. I was pleased to hear my right hon. Friend the Minister assure the House last week that the forthcoming Government-sponsored take-up campaign would include a partial rebranding of the guarantee to try to remove some of that stigma.

The challenge before us is to introduce measures that ensure that all pensioners share in the growing prosperity of the nation. However, despite the Government's best efforts, it is true, both in perception and in reality, that many pensioners are not sharing that prosperity. That is why I should like an increase greater than inflation in the basic state pension. Because of the panoply of measures that I have mentioned, it would be untrue to imply that the Government are giving pensioners only 75p extra, but it would be equally untrue to say that the country could not afford to pay pensioners more in basic state pension. The abolition of the link between basic state pension and average earnings and the later entrenchment of that decision were among the meanest and most disgraceful acts of the Thatcher and Major Governments. Restoring and backdating the link would carry an astronomical financial cost, which I shall turn to shortly.