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Kali Mountford (Colne Valley): I congratulate the Government on making such an effort to ensure that money goes to the poorest pensioners and not necessarily to all pensioners. Is it not the case that the new winter fuel payment, which was not available under any previous Government, helps that group the most, because it is not deducted from the minimum income guarantee?
Mr. Darling: My hon. Friend is right. The winter fuel payment is extremely popular and provided a great deal of help not only to pensioners on low incomes but to all pensioners. It is perhaps a measure of its popularity that when we announced that we would extend it to households with members who were over 60, we received thousands of calls every week asking about it. It is very useful; it comes in a lump sum before Christmas and thus helps pensioners to pay the sometimes substantial bills that they incur at that time of year. The winter fuel payment benefits all pensioners, but perhaps it has greater value for those on low incomes.
Mr. Gordon Prentice (Pendle): Before my right hon. Friend leaves that point--
Mr. Darling: I was not going to leave it; it is such a good point that I might stay with it a little longer. However, I shall give way to my hon. Friend.
Mr. Prentice: It worries me that so many pensioners do not benefit from the minimum income guarantee. It would be a simple matter to include a few pages of large type in the pension book. Every pensioner has a pension book, and including those pages would encourage people to claim what was theirs.
Mr. Darling: My hon. Friend will realise later this week that the Government have made several proposals that draw attention to the minimum income guarantee. I do not share his optimism about everyone reading their pension books from cover to cover, and many pensioners receive payments by other means than an order book. We must ensure that they, too, know about the minimum income guarantee.
The Government are determined to do more to lift many more pensioners out of the low income bracket. That is why I shall launch a consultation document on the way in which we can best develop a new pensioners credit for the next Parliament. It will take account of and help those pensioners who have not only modest savings, but modest occupational pensions.
For the poorest pensioners, the scope of the minimum income guarantee will be extended; the pensioners credit on which we launch a consultation document will show how we are helping pensioners who have modest occupational pensions.
We are helping all pensioner households--some 10 million pensioners--through this year's winter fuel payment increase to £150. We should also remember that we cut VAT on fuel whereas the Tories doubled it. We have reintroduced the free eye tests that the Conservatives
ended when they were in government. From November, free television licences will be available for pensioners who are over 75. That group comprises some of the poorest pensioners.We are spending an additional £6.5 billion on new help for pensioners during the Parliament.
Mr. David Ruffley (Bury St. Edmunds): Will the right hon. Gentleman confirm that the pensioners credit will not be scored as negative income tax in future Red Books?
Mr. Darling: Why does not the hon. Gentleman wait until he reads the consultation document on the pensioner credit? I would have thought that he would be more interested in its proposals for helping pensioners. Most pensioners will want to know about that. Perhaps the hon. Gentleman's question shows the Conservative party's disregard for the welfare of pensioners in this country.
The Budget drives forward our reforms--
Mr. William Ross (East Londonderry): Will the right hon. Gentleman give way?
Mr. Darling: I am conscious of the 10-minute rule, and that it is not fair to Back Benchers if I speak indefinitely, but I shall give way for the last time.
Mr. Ross: I am curious about the way in which the right hon. Gentleman arrived at the figure of £6,000 savings. Has he simply applied indexation to take account of the inflation rate or earnings since 1988?
Mr. Darling: We simply doubled the figure. Time and again, I have stood at the Dispatch Box and rightly been asked by hon. Members--even Conservative Members, who did nothing about it in their last 12 years of government--to increase capital limits. I wanted to ensure that they were increased significantly. I believed that doubling the figure would make a useful start. The system is relatively easy to understand. The figure starts at £6,000, and goes all the way up to £12,000. I think most pensioners will welcome that, and I am glad to be Secretary of State at the time of its introduction. The pensioners credit will take the policy one step further.
As I was saying, this is a Budget that drives forward our reforms to make the welfare state fit for the 21st century. By controlling expenditure, we are able to do more for the people whom we want to help, including pensioners and families with children. We are helping people into work; we are making work pay; we are eradicating child poverty; we are making pension reforms for the future. We are a reforming Government, and this is a reforming Budget. It is building a strong economy, and we are building strong public services. This is a Budget for all our people.
5 pm
Mr. David Willetts (Havant): Let me deal first with the figures relating to public spending, which must be at the heart of the Budget judgment and the statement that we heard last week. It is also at the heart of new Labour's
claims on social security spending. I remind the Secretary of State that in 1996 the Prime Minister, in order to get elected, said:
- Our priorities should be to re-order public spending so that we're spending less on welfare and more on areas like education.
The reality--if we use the Chancellor's preferred, although admittedly now notorious, method involving cumulative increases from the 1998-99 cash base--is as follows. Social security spending is up by £32.4 billion, way ahead of education spending, which is up by £19.7 billion, and even ahead of health spending, which is up by £26.8 billion. Far from saving money on social security in order to put more into education and health, the Government are putting more into social security than they are putting into either education or health.
Mr. Darling: As the hon. Gentleman wants to make something of this point, may I ask him a question? Does he not accept that most of the increases to which he refers are discretionary--that we are spending more on pensions and on families with children? That is good spending; what we cut was the bad spending on high unemployment and economic waste.
Mr. Willetts: The Secretary of State is quite right. The biggest single item in the Budget measures comprises increases in means-tested benefits--benefits which, according to any normal person's reading of the Prime Minister's reference to welfare, are exactly what he was talking about. One cannot pledge to spend less on welfare and then claim credit for putting more into means-tested benefits.
The Government have no coherent agenda for saving money on social security. To be honest, I do not think that they even have a coherent agenda for spending money on social security. That certainly seems to be the view of two previous Social Security Ministers, both of whom have helpfully contributed their views on the Secretary of State and his strategy only today. In a book published today, the right hon. Member for Birkenhead (Mr. Field) says:
- New Labour came to power committed to transform welfare. That revolutionary intent has fractured.
- Welfare changes, masquerading as reform, have undermined the principle of work, mocked the idea of saving, and weighted public policy against people who tell the truth.
Mr. Frank Field (Birkenhead): Does not the weakness of the hon. Gentleman's attack lie in the fact that his Government implemented the very same strategy?
Mr. Willetts: I shall turn shortly to the figures relating to means-tested benefits, which the right hon. Gentleman has a long and distinguished record of criticising.
The right hon. Gentleman is well known as a critic of the Government's approach to welfare reform. What is perhaps more striking is what the former Secretary of State, the right hon. Member for Camberwell and Peckham (Ms Harman), said today. She said:
- There are too many departmental fingers in the pie, but no clear lead, no effective co-ordination and culture clashes between different departments. It can't go on like this. Government policy on the family is incoherent and ineffective.
Let us discuss pensions, to which the Secretary of State referred. The absence of a clear strategy is obvious as soon as we put together the different policy announcements and statements that he has made to the House in the past year. Less than six months ago, his reluctant hon. Friends were whipped through the Lobby to means-test disabled people with modest occupational pensions. How did he justify that policy? He did so on this ground:
- The first thing that our reforms will achieve is to do more for people who need help most.--[Official Report, 3 November 1999; Vol. 337, c. 306.]
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