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Mr. Winnick: My right hon. Friend mentioned winter fuel payments. Did he notice that, at Question Time, Opposition Front Benchers gave absolutely no commitment that they would continue such non-means- tested benefits? Was that not interesting? Should we not warn the electorate that, if the Tories were to win the next general election, winter fuel payments would almost certainly go?
Mr. Darling: As I understand it, Conservative policy is to oppose winter fuel payments, and, were they to get back to power, to remove them. However, it may be that the right hon. Member for Kensington and Chelsea (Mr. Portillo) has already delivered a lecture to the hon. Member for Havant (Mr. Willetts) and told him that he will have to change his policy on that issue, too. We shall have to wait; perhaps the hon. Gentleman's speech will be more interesting than it otherwise might have been.
I should like to deal with two aspects of the uprating order. The first is pensions--which is a matter of particular interest to hon. Members--and the second is the payments that we make for children.
Mr. John Bercow (Buckingham):
Will the right hon. Gentleman give way?
Mr. Darling:
I shall certainly give way in a moment.
I should like to return to a theme that we touched on a few moments ago, at Question Time--the problem that we inherited. The problem can be put quite simply: whereas pensioner incomes as a whole increased by about 64 per cent.--mainly because of occupational pensions that have been building up in the past few years, and the state earnings-related pension scheme, which is only just beginning to mature--the gap between the better-off pensioners and the poorest pensioners has widened. The figures show that the income of the bottom fifth of pensioner couples increased by only one third, whereas the income of the top fifth increased by almost 80 per cent.
The Government therefore believe that the right thing to do is to target most of the £5 billion extra on those pensioners who lost out. That is not all that we are doing, but that is what we wanted to do. The poorest 1 million single pensioners and the 1 million pensioner couples who
have not kept up need to be supported. That is why we are targeting help on those people, as well as helping all pensioners across the board.
Miss Anne McIntosh (Vale of York):
Will the right hon. Gentleman give way?
Mr. Darling:
May I give way first to the hon. Member for Buckingham (Mr. Bercow), and then to the hon. Lady?
Mr. Bercow:
My hon. Friend may intervene first.
Mr. Darling:
Despite the hon. Gentleman's uncharacteristic courtesy, I shall give way to him first.
Mr. Bercow:
I am sorry; I was merely displaying my natural chivalry, which I should hope would command the assent of the House as a whole.
Will the right hon. Gentleman tell me why the Government are not prepared to apply the same principle to their payment of benefits as they apply to the payment of commercial debts? Given that the late-payment legislation requires businesses to pay interest on delayed commercial debts, why are the Government not prepared today to undertake that if, through their own incompetence they have caused misery and suffering to thousands of people by denying them their benefits, when those benefits eventually materialise, those individuals will receive interest on top of them?
Mr. Darling:
People are receiving benefits. However, if the hon. Gentleman is referring to the national insurance recording system, just before he goes on about incompetence, he should remember who--in 1996--signed the contract for that system. If my memory serves me well, in 1996, the Secretary of State for Social Security was the right hon. Member for Hitchin and Harpenden (Mr. Lilley), who, sadly, is no longer with us.
Mr. Darling:
The right hon. Gentleman is not with us physically in the Chamber, but I am sure that he is with us somewhere.
Miss McIntosh:
I thank the right hon. Gentleman and my hon. Friend the Member for Buckingham (Mr. Bercow) for the chivalry shown on both sides of the House. Nevertheless, I should like to make a more mundane point, on which I have tried to press the right hon. Gentleman on several occasions. Will he take the opportunity of today's debate to dispense with the rule that annuities must be taken out at age 75? A groundswell of opinion, which I cannot believe is unique to the Vale of York, is in favour of dispensing with the rule. Will he satisfy our constituents and the House by stating today that he will lift the rule?
Mr. Darling:
No. The hon. Lady will know that the Inland Revenue and Department of Social Security have been looking at annuities to see whether the system should be changed but, as my right hon. Friend the Minister of State, Department of Social Security has said, if there are
Let me set out what we are doing. I said that we wanted to help all pensioners, particularly the poorest. We knew this year's RPI increase would be low, which is why we increased winter fuel payments--so that each pensioner household would receive £100, a fivefold increase. For the first time last year, it was paid before Christmas. We hope that that will happen again this year. We are paying winter fuel payments to all households with someone over the age of 60. I shall announce the arrangements for doing that soon.
Later this year, those aged over 75 will get free television licences; the oldest pensioners tend to be among the poorest. On top of that, we have restored free eye tests, reduced VAT on fuel and provided help for pensioners that was not there in the past, taking 200,000 pensioners out of income tax altogether, so that nearly two thirds of pensioners pay no tax. The 10p starting rate of tax helps pensioners as well.
Clearly, our priority must be to ensure that those who have lost out over the past 20 years receive help. Although the winter fuel payments and free television licences disproportionately help pensioners on the lowest incomes, that is not enough.
The House will be aware that the basic pension, although the foundation of the pension system, has never been enough on its own. That is why, in the 1960s, the graduated pension scheme was introduced and, in 1978, SERPS was introduced, but even those measures did not do enough to help pensioners who were earning low incomes throughout their lives. That is one of the reasons why we are making changes to SERPS, so that the state second pension greatly increases the amount of money that goes to someone on low lifetime earnings.
To deal with pensioners who lost out, we introduced the minimum income guarantee, which sets a decent base for pensioner incomes. It is targeting our resources where they are most needed, making the worst off better off. For single pensioners, the pension is £78: an £8 increase since 1998-99. For couples, it is £121.95: a £12.60 increase since 1998-99. For the oldest--those over 80--it is £86 and £131. Those measures are a substantial help for pensioners who have lost out over the years. As has been made abundantly clear, not just today, but on previous occasions, the Conservative party is against the minimum income guarantee and will get rid of it. A total of 1.5 million pensioners would lose out as a result.
I know that some hon. Members advocate increasing the pension by the earnings link, but when we consider that restoring the link would cost about £18 billion by about 2020 and that the poorest pensioners would not see a single penny of that benefit, we realise that there are far better ways in which to deal with the immediate problem for far too many pensioners: they do not have enough money to live on. We introduced the minimum income guarantee to help them.
Mr. Patrick Hall (Bedford):
On the point about the poorest pensioners not benefiting from an increase in the
Mr. Darling:
The minimum income guarantee has the effect of ensuring that the poorest pensioners get more help. If we increased pensions across the board, the top fifth of pensioners, whose incomes have increased by some 80 per cent., would not appreciate or notice the difference. If we had not introduced the minimum income guarantee, those at the bottom would have lost out. I make no apology for the fact that the £5 billion that we are spending in this Parliament is concentrated on those pensioners who have lost out--the poorest pensioners, who are living in poverty. They are the sort of people who voted for our Government to help them out of the difficulties that the Tories had got them into. That is the right thing to do.
Mr. Vernon Coaker (Gedling):
Is not the problem with this debate that it takes place in a context where everyone sees pensioners as a homogenous group of poor pensioners, whereas the reality is that there are rich pensioners, middle-income pensioners and poor pensioners? Are not the Government targeting help at those who need it, rather than spreading it across a range of pensioners, many of whom do not need help?
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