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Minimum Income Guarantee

5. Mr. Huw Edwards (Monmouth): If he will make a statement about the take-up campaign for the minimum income guarantee for pensioners. [129324]

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The Minister of State, Department of Social Security (Mr. Jeff Rooker): We have announced details of the first Government take-up campaign to identify pensioners most likely to be entitled to the minimum income guarantee, and to encourage them to claim it. As the House knows, the campaign started on 30 May with intense activity on several fronts, including a fairly long television advertising campaign in three separate parts over the summer. Furthermore, the Government will be writing to 2 million identified pensioners who may have an entitlement, based on the information we already have. Pensioners can also claim without leaving their home by calling the new tele-claim centre's freephone service.

Mr. Edwards: Will my right hon. Friend join me in thanking Thora Hird for her contribution to the Government's take-up campaign for the minimum income guarantee? The guarantee will increase pensions in line with average earnings and those over 75 have already seen it increase their incomes by £16 a week. Will he assure me that the pensioners of this country need to be reminded that that this is an entitlement and not a gimmick, which is what the Conservative party has said, and that it would be abolished if there were ever a Tory Government again?

Mr. Rooker: My hon. Friend is right to pay tribute to those, such as Thora Hird, who have assisted the campaign. In addition, Nerys Hughes has contributed to a Welsh version of the campaign and Peter Sallis has helped as well. The campaigns are having an impact, as my hon. Friend has just said. There have been 133,000 responses to date but, as I told the Select Committee on Social Security last week, it is too early to estimate the net effect and say how many people have gained from the minimum income guarantee. We will not have a figure for that until the end of this month. So far, we have sent out 417,000 letters, which is not a bad achievement for this stage of the campaign.

Mr. John Wilkinson (Ruislip-Northwood): Should not the Government encourage people to make provision for their old age? How will the minimum income guarantee assist them to do that? Is it not the case that those on low incomes will see their savings set against the minimum income guarantee? The Government are therefore, instituting an active disincentive. Should they not be making quite sure that all those in retirement who have paid the stamp throughout their working lives get a decent state pension on which they can live?

Mr. Rooker: It beggars belief to imagine where the hon. Gentleman has been for the last few years. The guarantee applies to today's poorer pensioners who are in that position because of the legacy that we inherited, in which the gap between the most well-off and the poorest pensioners had gone from a ratio of 2.5:1 to 3.5:1 in the 18 years that he sat sucking up to the Government whom he supported.

Mr. Paul Flynn (Newport, West): Is it not true that today's pensioners have made provision for their old age by paying into the national insurance scheme for the last 50 years? The cost of the contributions that they paid in increased at the high rate of inflation, but the benefits that are paid out come to them at the lowest rate of inflation. We should restore the insurance principle.

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The Government are to be congratulated on the take-up scheme, which is much better than any that has gone before. However, would it not be fair if the poorest pensioners, who were promised that the take-up scheme would start more than 15 months ago, had back pay for that period? The Under-Secretary of State for Social Security, my hon. Friend the Member for City of York (Mr. Bayley), said that it would be perfectly possible to do that.

Mr. Rooker: As my hon. Friend knows, we can pay the benefit only from the day on which it is claimed, and everyone knows that it is available to be claimed. We have gone out in a proactive way--and not just in television and newspaper advertising--to trawl the Department's records and we have located 2 million pensioners to whom we shall write individually.

As my hon. Friend knows, today's poorer pensioners are in that position because, during their working lives, they were not able to contribute fully to the state earnings-related pension scheme, were not allowed to have an occupational pension scheme and were not among the group that would have been targeted by the pensions industry for the mis-selling of personal pensions. Today's poorer pensioners are there simply because the policy in the past was not sufficient to enable them to accrue a pension that would give them a decent standard of living. That is why we have a raft of other policies for tomorrow's pensioners, so that they do not find themselves in the same position as today's poorer pensioners.

Mrs. Jacqui Lait (Beckenham): The Minister has given us a raft of statistics about how many forms have been sent out, but will he tell us how many have been sent back and whether anyone has been paid under the minimum income guarantee since the campaign started? Does he agree with Help the Aged in Scotland that one of the reasons why pensioners are put off claiming the minimum income guarantee is that the benefits are so complex? Would it not be better for the Government to give pensioners a decent increase to the basic state pension, as we have already suggested?

Mr. Rooker: I may get done for repetition--and I bear it in mind that this is probably the last time that I shall appear at the Dispatch Box with you, Madam Speaker, in the Chair. I said that we have had 133,000 responses since 30 May and I also said, as I told the Select Committee last week, that it was too early to give the House a figure for how many people had been successful. We will not know that figure until later in the month.

The hon. Lady was a member of the Government who introduced income support, so it would be much better if she did not denigrate it. We are using modern technology in the system so that we do not have to send 40-page forms for pensioners to fill in, and a two or three-page form can be produced electronically and filled in over the telephone, so people do not have to go to the benefit office. We are trying to do that proactively; that is the difference between us and the Conservatives, who ignored pensioners.

Mr. John Cryer (Hornchurch): I accept what my right hon. Friend says about the minimum income guarantee. Is he aware that if the prices link alone had been in place

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since 1948, the state pension would now be worth only £27 a week? Are we prepared to see the state pension, the basic building block of pensioner incomes, wither on the vine? Or will he rescue it by restoring the earnings link? On that subject, will my right hon. Friend remind the House who cut the earnings link in 1981? Was it the Tories, and if so, does not their pathetic posturing on pensioner poverty start to ring a bit hollow?

Mr. Rooker: My hon. Friend is right. Hon. Members on both sides of the House accept that had the basic state retirement pension been linked to prices since its introduction, it would be nothing like as much it is today--indeed, it would be far less. If we used the pensioner prices index, the increase would be less, so we do not do that. We must look at the average of total pensioner incomes. Taking the basic state retirement pension in isolation is not a true and fair reflection of pensioner incomes, so we must look at things in the round. That is why a previous Labour Government introduced the state earnings-related pension scheme, which has allowed people on average earnings who have worked for 20-odd years since its introduction without a break in service to retire today with a pension income double the basic state pension. That is the legacy of the previous Labour Government.


6. Miss Anne McIntosh (Vale of York): What recent representations he has received on the level of the state pension; and if he will make a statement. [129325]

The Secretary of State for Social Security (Mr. Alistair Darling): I receive many letters in relation to the state pension.

Miss McIntosh: Does the Secretary of State regret the fact that he did not raise the state pension more when it was recently increased? That insulted pensioners, as the cost of petrol was increased more than the amount given to pensioners, thus saving his Department £90 million this year alone. Is he not embarrassed that the Conservative party is setting the agenda on pensions, and that pensioners realise that they will be better off under the next Conservative Government than they are under this Labour Government?

Mr. Darling: If anyone should be embarrassed, it should be the hon. Lady. She may not even have read her own party's manifesto, and may not recall that her party, in common with all the other principal parties in this country, stood on the commitment to increase the basic state pension in line with prices. The difference between us and the Tories is that we are doing more than that, spending some £6.5 billion more on supporting pensioner incomes than they propose to do. We are making sure that nearly half of that goes to the poorest third of pensioners, because we wanted to deal with the problem of pensioner poverty that has arisen in the past 20 years. An increase across the board would not have helped the poorest pensioners. We are reforming and strengthening SERPS, especially for those with low earnings. Frankly, when it comes to pensions, fairness and

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doing the right thing for the pensioners of today and tomorrow, the Conservatives have nothing whatsoever to say.

Mr. Frank Roy (Motherwell and Wishaw): I thank my right hon. Friend for what he has just said. I am delighted to hear that our party will continue to speak up on behalf of poor pensioners, which is why the minimum income guarantee is welcome in my constituency, as is the winter fuel allowance, which is certainly not regarded as a gimmick. That money is most welcome when it comes through to pensioners in December. If any Member does not want pensioners in his or her constituency to get their so-called gimmick, the pensioners in my constituency certainly need it. Will my right hon. Friend confirm that the winter fuel allowance of £150 will be paid before Christmas this year, as that is, of course, the time when pensioners most need the money?

Mr. Darling: Yes, this year the payment will be made in December again. My hon. Friend is right, and pensioners in Motherwell, and elsewhere, will remember that the legacy of the Conservative Government was to double VAT on fuel. The winter fuel of payment of £150, which Conservative Members intend to scrap, is of great help, especially to those on low incomes.

I remind the House that no matter what the Conservatives say about their pensions policy, they should remember what the shadow Chancellor--who, it seems, is now in charge of all policy matters in the Conservative party--said about Conservative pensions policy:

There is no new money.

Mr. Owen Paterson (North Shropshire): In a rural area such as mine, public transport does not run everywhere and the car is essential. Will the Minister answer a simple question that is frequently put to me by my pensioners? Why was the price of petrol put up on the basis of an inflation rate of 3.3 per cent., while their pension was put up on the basis of an inflation rate of 1.1 per cent.?

Mr. Darling: If there is no public transport in the hon. Gentleman's constituency, I wonder whether he has explained to people that the Conservative party's policy of bus deregulation in the 1980s was largely responsible for damaging the public transport infrastructure.

As for the indexation of pensions, the increase has been based on the September retail prices index for many years--under the Government whom he supported as well as under ours. I hope that he will take the opportunity to tell the pensioners in his constituency that all the Tory party pensions policy will do is take away money that they are receiving at the moment and give it back to them, and that the maximum that they can expect is 42p before they start paying tax, and before 2 million of them start to lose benefit.

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