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Mr. Willetts: How many people are involved?
Mr. Darling: Sixty thousand people are now, on average, £20 a week better off than they would otherwise have been.
In fact, there are two principal reasons for the failure of some people to qualify. One is that they have too much income; the other is that they have too much in the bank. That is precisely the difficulty with which the pension credit is designed to deal. I believe that people should be encouraged to save for their retirement--that we should encourage thrift. The credit complements the changes we have made in both the state second pension and the funded sector of stakeholder pensions. People will now be rewarded rather than punished for their saving.
The hon. Gentleman criticised the winter fuel payment, saying that it was complicated. I do not think that there is anything complicated about a payment of £200 going into every pensioner household next week--and I am evidently not the only person to think that such one-off annual payments are a good idea. Some years ago, when he was in charge of the Christmas bonus, the shadow Chancellor--responding to similar criticism--said:
The hon. Gentleman attempted to tell people that pensioners would be better off under the Tories. It is, perhaps, a sign of his desperation that he should pray in aid Lady Castle: I do not think that she has reached the conclusion that she will ever vote Tory.
Let the hon. Gentleman reflect on this. He is proposing to take away from pensioners the winter fuel payment of £200, the free television licence--which is being sent out this week--and the Christmas bonus. All those amounts will be taken away from pensioners. The hon. Gentleman proposes that they should then be returned to pensioners, and expects pensioners to be grateful. Pensioners know to beware of Tories bearing gifts because all the evidence shows that the Tories will con them again, as they did for 18 years.
It is evident that unless the hon. Gentleman makes substantial additional public expenditure available, about 1.5 million people will lose out as result of ending these direct payments because they are tax free and benefit free
at the moment. [Interruption.] Let us remember that 1.5 million people do not receive either any state pension or the full state pension. If money were taken away from them and then given back, the hon. Gentleman would have to spend more money than he would have.I am entitled to have such proposals costed, and official figures show that the hon. Gentleman would have to spend £5 billion to restore and remove the benefit and tax penalty that would otherwise exist to ensure that the poorest pensioners--those 1.5 million people--did not lose out. Of course, the shadow Chancellor has told us that there is no new money, so the hon. Gentleman could not deliver that proposal. That comes on top of the Tory proposal to begin the privatisation of the basic state pension by encouraging the under-30s to opt out; and their plans, which they keep leaking to the Daily Express and others, to cut £6 billion from housing benefit would cost those on housing benefit about £25 a week on average. People do not believe the Tories because of their previous 18 years in government, and, given today's performance, they are unlikely to believe them at the next election.
Mrs. Jackie Lawrence (Preseli Pembrokeshire): To what extent does my right hon. Friend think the pension mis-selling scandal of the 1980s has contributed to pensioner poverty, and who does he think should apologise for that?
Mr. Darling: There is no doubt that the pension mis-selling that took place in the late 1980s--largely in response to the public advertising campaign that the Tory Government ran, which encouraged people to opt out--represented a huge knock to the pensions industry. When we were elected, we spent considerable time persuading pension companies to offer redress to people who had been wrongly sold pensions--but, of course, the difference between us and them is that we have a strategy. We have the state second pension--a reform that will benefit 18 million low earners--and we are introducing the stakeholder pension and taking other action because we want people to save. Of course, under the pension credit that I am announcing today, people will be better off as a result of their saving, no matter how much they save. That reform is long overdue.
Mr. Steve Webb (Northavon): I thank the Secretary of State for his courtesy with regard to the statement. I welcome his announcement of additional support for carers and disabled people. Can he confirm that, even after his proposals, most carers receiving invalid care allowance who reach state pension age will still have that benefit taken from them because of the continuation of the overlapping benefits rule?
I also welcome the additional, above-inflation pension rises--timed to coincide with the election. Can the Secretary of State confirm that they represent rises in real terms of less than £3 next April and barely £1 the year after? On the pension increase, when will we receive the Government Actuary's report that we have been promised, which the Vote Office has just told me is not currently available?
On the pension credit, can the Secretary of State confirm that it represents a new scheme to solve a problem that is largely of his own making, given that the people with £20 of private pension savings to whom he
referred would have been well clear of income support when the Government took office? It is only his policies that have dragged those people into the means test.Finally, on pension poverty, does the Secretary of State recall that his predecessor, the right hon. Member for Camberwell and Peckham (Ms Harman), said:
We were not prepared to stand by and allow that problem to continue growing . . .--[Official Report, 17 July 1998; Vol. 316, c. 714.]
Mr. Darling: Of course it is. The rate of mortality among elderly people is far too high, which is why we introduced the winter fuel payment. I noticed that the hon. Gentleman had nothing to say about that. From next week, starting with the poorest pensioners, every pensioner household will receive £200 a year precisely to deal with that problem so that pensioners do not have to worry about turning up the heat.
The hon. Gentleman complains that more pensioners are getting the minimum income guarantee. That is what he said: under the Government, more people are getting the minimum income guarantee. I make no apology for the fact that 2 million pensioners are now getting the minimum income guarantee, some of them getting £20 a week more than they would under the policy that he advocates.
On the subject of the policies that the Liberal Democrats advocate, why was it, if the hon. Gentleman is taking the stance that he is today, that, at the last election, the Liberal Democrats promised that the basic state pension would remain indexed to prices? I assume that the Liberal Democrats' policy in the manifesto was the same in each of the seats that they fought and that there were not the usual regional variations. They said that, in addition to ensuring that the basic state pension remained indexed to prices, there would be an additional top-up pension for pensioners with incomes below income support level. That sounds remarkably like the minimum income guarantee. I note that, on 31 August, as the hon. Gentleman shifted his policy yet again, he said that he wanted to increase the basic state pension by at least £5 a week--that sounds very familiar--yet now he says that that is not enough.
I suggest that the hon. Gentleman has a word with his party leader, who was on the radio yesterday with Jimmy Young. I do not know which one of them conducted the chat show, but they were certainly having a conversation. Mr. Young asked about pensions:
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