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Mrs. Lait: I am very pleased to have the average figure. We knew that the letters were still going out. However, more significantly, only 10 per cent. of people are replying at present. As anyone in marketing knows, 10 per cent. is a jolly good return. I congratulate the Government on attracting replies from 10 per cent. of people; a marketing company would consider 1 per cent. a very good return. However, 10 per cent. is still scandalously low, and I hope that more people will be able to claim that to which they are entitled.

People are losing out in other ways as well. We heard that a million people are still waiting for winter fuel payments. The Under-Secretary of State for Social Security, the hon. Member for Wallasey (Angela Eagle), said:

Perhaps we could be updated on that as well, because we understand that a million people are still waiting.

It is worth stating that the length of time taken to deal with the problem has increased. However, the then Pensions Minister, the Financial Secretary to the Treasury, the hon. Member for East Ham (Mr. Timms), predicted that, by the end of the year,

The Minister of State said that 2,300 new cases a month were emerging. I should be most grateful to him if he would confirm that figure because those cases are in addition to the 100,000 people who are still waiting.

Mr. Rooker: There was an argument about whether the system is stable. I shall not refer to my folder, but I

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said that being stable does not mean working at 100 per cent. accuracy. The system is not 100 per cent. accurate at present. About 650,000 people become pensioners each year--50,000 plus a month--but 2,300 are not dealt with accurately. I saw that figure this morning. However, that does not mean that they do not get their pensions. Some pensions are calculated on the basis of what the figure may be and involve an overpayment or an underpayment.

Mrs. Lait: I am grateful to the right hon. Gentleman. I accept that the word "stable" does not mean 100 per cent. accuracy, but I take that to mean that, of the new pensioners who can claim SERPS payments, approximately 2,300 a month are new cases. It is useful to have that information on the record. Taking into account all such matters--NIRS2, MIG and the winter fuel payment--it is interesting that 2.5 million people are awaiting the pleasure of the older person's champion, otherwise known as the Secretary of State. To add insult to injury, it now appears, from coverage in Pensions Week, that the reorganisation at the Department of Social Security has led to a shortage of pensions advisers, so much so that the Department has asked the National Association of Pension Funds to do its work for it.

We, and all other hon. Members, await with interest the Chancellor's statement on Wednesday, although I assume that information on the pensioners credit will be given on Thursday. We hope that the consultation document will be published on Wednesday, so that we have time to study it before Thursday's statement and can provide a relatively reasoned response, which we may otherwise not be able to give. I congratulate the Government on the fact that, unusually for them, they have so far failed to leak what is in that document or, indeed, to spin it.

Precise details about the pensioners credit are scarce, but I cannot understand how a pensioners credit and the transitional arrangements could be introduced without some sort of means test. Thousands of pensioners may have to fill in tax forms, as opposed to income support forms, but that still constitutes a means test.

Mr. Michael Jabez Foster (Hastings and Rye): Does the hon. Lady regard herself as being subject to a means test when she completes her tax return?

Mrs. Lait: The pensioners credit has a great similarity to the working families tax credit and, as the hon. Gentleman will know, the tax credit is merely income support provided by another Department, and the pensioners credit will, in effect, be the same--hence a means test will be involved.

We shall make our own judgment of the Government's proposals when they are produced on Wednesday and Thursday, and so will the pensioners of the United Kingdom. To date, they and we are unimpressed by the Government's treatment of them.

5.19 pm

Mr. Eddie O'Hara (Knowsley, South): Our debate so far has been combative. As the chairman of the all-party group on ageing and older people, I shall refrain from making party-political points. Clearly, other hon. Members in the Chamber will make enough of them.

I pay tribute to the great deal that the Government have already done for pensioners. I recognise that the £6.5 billion allocated to pensioners in benefits and in kind

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during this Parliament is considerably more than the cost of uprating pensions in line with earnings. In view of my constituency's demography, the majority of pensioners there will benefit from the Government's policy of targeting the poorest pensioners.

I am pleased by the increase in the threshold for payments of the minimum income guarantee and the pension credit for pensioners with second pensions and modest savings. Those measures go some way towards addressing my concerns, which I have expressed on several occasions in the Chamber, about those pensioners who are just above the income support and minimum income guarantee thresholds, of whom there are many in my constituency. They are typical blue-collar workers with a small occupational pension from, for example, Plessey or British Insulated Calendar Cables.

On the other hand, I want to discuss several areas in which the Government have not yet quite got their approach right and to urge them to do so in future. My right hon. Friend the Minister commented on the state earnings-related pension scheme, and I do not envy the Government their problem with SERPS. It was not of their devising, although they have the unenviable task of having to sort it out. I hope that my right hon. Friend was right to say that the onus of proof will lie with the Government. I have previously expressed to him my concerns about the fact that any system of remedying the mess that is based on justification is designed to be inequitable and perhaps to disfavour those in most need. We shall see.

The 75p uprating of pensions in line with inflation last year will be discussed extensively in this debate. It was entirely logical to those in the Treasury who crunch numbers in the abstract, but it was psychologically crazy to anyone who knows and cares about real pensioners. On previous occasions, I referred to the prism--it might be a distorting mirror--through which pensioners will continue to view the Government's pensions policy. That is sad, in view of the fact that their policy contains many generous provisions.

The argument about whether pensions should be uprated in line with earnings is complex. The Government maintain that that would be unsustainable in the medium to long term, and that the concept is outmoded because, for many pensioners, the state pension is not the main element of their retirement income. I understand the Government's concern that an increase across the board would put pension payments into the pockets of those who least need them. They are better targeted at those who need them most, but it is surely not beyond the wit of the Treasury to find a means to claw back some money from those who do not need it.

I disagree with the suggestion of the hon. Member for Beckenham (Mrs. Lait) that clawing back through the tax system or the allowances system involves means-testing. It does not involve means-testing, as I understand it. Everyone who pays tax has to have an assessment, but those who pay large amounts in tax commonly have different reasons for being sensitive to means-testing than do those many pensioners who simply find it demeaning.

Mrs. Lait: The pensioners' credit is for people who have a small occupational pension and who do not already pay tax. Many of them will have to fill in some type of form--whether a tax or an income support form.

Mr. O'Hara: I do not agree with the hon. Lady that that equates to means-testing. I was referring to those

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people whom the Government rightly do not want to receive pension benefits that are better targeted elsewhere. Such people do not fill in their tax return; they have an accountant to do it for them.

Pensioners regard the pension to which they have contributed not as a benefit or a handout but as an entitlement for which they have paid through their contributions. We are advised that there is a surplus in the national insurance fund that could provide an increase in line with earnings--at least in the medium term. However, in the absence of the Government Actuary's report, it is difficult to make a judgment on that matter, although I note the Minister's reasons for the delay in publishing the report.

Surely there is room for some policy improvement--on increasing pensions in line with earnings rather than with prices. The minimum income guarantee is the Government's own estimate of the minimum decent income for a pensioner. In the medium term, could we not at least move towards that as the acceptable amount for the basic pension? At the least, could we not have a discretionary increase in excess of inflation? I look forward to hearing good news on that in the autumn statement, although I realise that the Minister cannot be drawn on that at present.

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