| Previous Section | Index | Home Page |
Mr. Patrick Hall: Will my hon. Friend comment on the situation facing those pensioners whose income is not far above income support rates and who have a small occupational pension? I am sure that my hon. Friend, like me, will have met such people; they are not the wealthy pensioners to whom he has referred. How should their concerns be addressed in the long term? Of course, they sometimes do not have a long time.
Mr. Coaker: My hon. Friend makes a reasonable point, although I thought that I had addressed the fact that there is a middle group of pensioners for whom we need to consider such issues as capital allowances. We need to consider those matters because small occupational pensions take people just above income support, thus excluding them from entitlement to benefit. However, if we raise the point at which an occupational pension allows people to claim an income support top-up, another group of people will fall into that category. Nevertheless, the point is too low at present and the Government should consider the matter.
I am confident that the Government will consider capital allowances and occupational pensions as part of their reform package. The fundamental thrust of my remarks is that, if the choice is whether or not a Labour Government should direct resources to the poorest pensioners--even if that means difficult decisions--it is right to give those resources. I do not support a flat-rate increase for every pensioner irrespective of wealth, property or income; I support ensuring that those at the bottom, who are desperately poor, have resources poured towards them so that we make a real difference to the poverty in which they have lived for years. As a Labour Government, remaining true to Labour principles, we can make a real difference to them.
Other points relate to the radical nature of social security reform in its wider context. The Government Actuary's report is not a document that I usually read on Sunday nights, although I did so yesterday evening, which says a lot about me. The report is interesting; it describes many of the Government's reforms. For example:
The document notes that maternity benefit for self-employed women will be increased by 15 per cent.
Under the uprating order, child benefit will be uprated from £14.40 to £15 for the first child, with an uprating of £10 for second and subsequent children. Is it not a sign of a radical Government, who are determined to do something for children, that the main benefit to support families, which is paid to mothers, has increased by 36 per cent. since we took power? That is a huge increase for families with children.
As my right hon. Friend the Secretary of State pointed out, if we add that increase to all the other changes and reforms that the Government are making, they show that the Government are ensuring that child poverty is attacked and that they are doing their utmost to eradicate it.
It must be desperately disheartening for us all when we see children living in poverty and lacking the opportunities that we would want for all children. The child benefit reforms and the child care tax reforms will be made in April 2001. The sure start schemes and a variety of other things make an important statement about the way that we intend to attack child poverty and rid our society of that stigma.
The hon. Member for Vale of York said that the new deal--another part of our welfare reform programme--was a failure. I do not think that it is a failure at all. I am proud to say that it is one of the most fundamental and radical reforms that any Government have made: to declare that, instead of abandoning people on the dole and forgetting all about them, we shall attack the problems that they face and engage with some of the people who have the most difficult problems, to bring them back into the work force.
If we want people to be brought out of poverty, we must get people back into work, and tucked away in the document by the Government Actuary's Department are reforms to the national insurance scheme and the lower earnings limit to try to make work pay. If those reforms are placed alongside some of the other measures--such as the new 10p starting rate of income tax--they show that the Government are making real efforts to align the national insurance rates and national insurance thresholds with the rates at which people start to pay income tax. That is real radical reform--real change--to ensure that work pays and that the people who, for so long, have been socially excluded are brought back into the workplace.
I remind my right hon. Friend the Minister of State--as did the hon. Member for Vale of York and others--that the issue of SERPS remains. I hope that the Government will make an announcement on it in the near future, although I noted the contents of paragraph 7 on page 4 of the report by the Government Actuary's Department, which I was reading on Sunday night.
I shall finish with a couple of other points. The first concerns the Conservative party position, which is incredible; I am sure that local Conservatives in my constituency and elsewhere are not aware that the official Conservative position on the basic state pension is exactly the same as ours. Indeed, the hon. Member for Vale of York is not even aware of the official position of the Conservative Front-Bench team. I am pleased that the Conservative position on the uprating of the basic state pension is exactly the same as the Labour Government's position. I hope that the fact is widely reported.
Secondly, I refer to page 8 of the report by the Government Actuary's Department, to show how complex these issues are. It is all very well for people to say, "We will attack social security spending and reduce it." I appreciate that the document deals with national insurance benefit payments, but the vast majority of national insurance benefit payments and the vast majority of social security payments are to do with pensions; and anyone who talks about reducing social security spending is, by implication, attacking social security spending on pensioners and on pensions. It makes a good soundbite,
but the reality is that the vast majority of social security spending is spent on pensioners, and the bar graph on page 8 of the report shows that, although it sounds good as a piece of rhetoric, it is a ridiculous thing to say, given the economics of benefit payments and welfare reform.
Mr. Archy Kirkwood (Roxburgh and Berwickshire):
I am pleased to follow the hon. Member for Gedling (Mr. Coaker); I know him well. He has made a good speech and his commitment on this subject is not in question. He spoke passionately about the need for the Government--in fact, all of us--to try to do better for people beyond retirement age who are on a low income; I support him in that. However, he faces a dilemma when he meets pension groups, and I understand and sympathise with him. They do not necessarily disagree with the need to target resources but pensioners tell me that they have paid national insurances contributions all their lives and that they were given an undertaking that they would be looked after. I do not wish to make a party political point--whom they blame is a matter for them--but they believe that the state undertaking has been broken. That is the nub of their argument.
It is all very well for the hon. Gentleman to be passionate about attacking the problems faced by those on low incomes, but the only discernable direction in which the Government are going is towards more means-testing of benefits. Means-tested benefits certainly include an aspect of targeting, but the hon. Gentleman knows enough about the subject to understand that all sorts of disadvantages--some covert and some blindingly obvious--are attached to a policy that is rooted in means-testing. In the long term, they are a massive disincentive to saving. If the hon. Gentleman is anything like me, he will have been made aware of that problem in the meetings that he has had with pensioners. Such benefits also have a negative effect on work incentives, they create poverty traps and, worst of all, take-up and eligibility are massive problems.
The hon. Gentleman is right to be passionate about helping those who need help most. However, if the Government use the one-club strategy of means-tested benefits, they will come across real difficulties that, sooner or later, will have to be addressed. Nevertheless, I concede that he made a powerful contribution to the debate.
"Entitlement to Maternity Allowance has been extended to include employed pregnant women who earn between the maternity threshold . . . and the lower earnings limit."
They were previously excluded from claiming the allowance.
"to bring their benefit in line with employed women."
Such changes are being made throughout the social security system; they seem small, but they affect the quality of life for many people. They show what the Government have been doing.
| Next Section
| Index | Home Page |