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House of Commons

Monday 13 November 2000

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked--

UK/Australia Pensions

1. Mr. Robert Maclennan (Caithness, Sutherland and Easter Ross): If he will make a statement about the ending of the social security agreement between the United Kingdom and Australia and its effect on pensioners reaching pension age after 28 February 2001 who have spent periods of their working life in Australia. [136106]

The Minister of State, Department of Social Security (Mr. Jeff Rooker): People who are already receiving benefit with the help of the agreement with the Australian Government will not be affected when it terminates. We are aware that there are implications for people currently residing in the UK who had previously lived in Australia and are not yet retired. We are actively considering the full implications of the Australian Government's decision, and in particular what we can do to protect the position of those people.

Mr. Maclennan: More fundamentally, will not the Government end the discrimination whereby they index-link the British pensions of British pensioners living in the United States and European Union countries, but not those of pensioners living in the Commonwealth countries--Australia, Canada and New Zealand? Will the Government at least make arrangements to protect the thousands of United Kingdom pensioners who will retire after 28 February next year and who are unable to count their years in Australia towards their basic pension, and who do not have the opportunity to supplement their pension?

Mr. Rooker: We have no plans to change the present policy. I must make that clear, so that we do not give anybody false information. I have already said that we are looking actively at what we can do to protect those people who retire after the agreement finishes at the end of February. A perverse arrangement could come about whereby the UK Government could gain from the change. I do not see that that would be morally justified, so we want to do what we can to protect such people. However, there are a few myths that we must knock on the head. I must tell the right hon. Gentleman that there is no basic

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state pension in Australia: it is all means-tested. [Interruption.] It is not all means-tested in this country. If the Government did change their policy in respect of Australia, we would be paying to the Australian Treasury. The only people who would gain in Australia are those who are so well off that they do not get the age pension in Australia.

Mr. Andrew Mackinlay (Thurrock): What is the justification for the disparity in arrangements between Commonwealth countries, as compared with the United States? There is no logic in it. Is not there a need for a conference of social security Ministers of the key countries where ex-pats live? Is not liberty also involved? People want mobility in retirement, and the current arrangements are an impediment to that, particularly when abroad they can enjoy not necessarily the support of the taxpayer, but the love and succour of their families?

Mr. Rooker: I have already said that I am not prepared to defend the logic of the present situation. It is illogical. There is no consistent pattern. It does not matter whether a country is in the Commonwealth or outside it. We have arrangements with some Commonwealth countries and not with others. Indeed, there are differences among Caribbean countries. This is an historical issue and the situation has existed for years. It would cost some £300 million to change the policy for all concerned. We must also consider that as the European Union expands--pension upratings are, naturally, paid in the EU--the issue will not go away. I accept that.

Pensions Upratings

3. Mr. David Heath (Somerton and Frome): What assessment he has made of the relationship between the indices used to calculate annual pensions upratings and patterns of expenditure by pensioners. [136108]

The Minister of State, Department of Social Security (Mr. Jeff Rooker): Each year, when considering the uprating, consideration is given to a wide range of factors, including the retail prices index. We recently announced our intention to increase the basic state pension by more than prices, and indeed by more than earnings.

Mr. Heath: Will the Minister confirm that in two years the basic pension will be uprated on the basis of the same index as that which gave us the miserable 75p this year? Is it not odd that it contains elements that are not relevant to pensioners, and does not include items that are highly relevant, particularly to the poorer pensioner? Is it not time to stop messing about with indices, and to move instead to an independent review body? That is good enough for judges, generals and even for Members of Parliament. Should it not be good enough for pensioners?

Mr. Rooker: I did not hear a thank you in that, or any reference to the fact that the pension is to increase by 7.4 per cent. next April. I heard a reference to poorer pensioners, many of whom will get a £14 a week increase next April. That is the reality. I am more interested in making sure that we deliver what we promised next April than in discussing the hypothetical issues relating to two years hence.

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Mr. Denis MacShane (Rotherham): On patterns of expenditure, does my right hon. Friend agree that the old motto, "From each according to his means, to each according to his needs," is still a good one and might apply to pensions? Pensioners with means should accept some responsibility. Is my right hon. Friend aware that in my constituency there is concern about the application of the difference between personal and nursing care for the old in long-term care? Will he continue to keep this sensitive matter under review, as it causes deep concern to pensioners in Rotherham?

Mr. Rooker: I cannot give my hon. Friend a substantive answer, but I understand that the matter will be sorted out in forthcoming legislation, subject to the contents of the Queen's Speech.

Mr. Peter Lilley (Hitchin and Harpenden): Does the right hon. Gentleman recall using the lowest possible index to increase state pensions last year and the highest possible index to raise duty on petrol last year? Does he further recall saying that any concessions on fuel tax would mean no more money for pensioners? Can he now explain to us at what point the Chancellor of the Exchequer decided to do a double U-turn?

Mr. Rooker: We considered many issues in relation to the uprating that we announced. We did not use an index.

State Pension

4. Mr. David Amess (Southend, West): What recent representations he has received on the level of the state pension. [136109]

The Secretary of State for Social Security (Mr. Alistair Darling): Many pensioners have welcomed the increase in pensions and the winter fuel payment of £200, which is being paid from today.

Mr. Amess: Although, according to my mother, any increase in the basic state pension is welcome, will the right hon. Gentleman explain why, under this rotten Government, the number of pensioners living in poverty has increased by 400,000? Does he regard the basic state pension as adequate at the moment? If it is only adequate now, will he explain why the Government, supported by the Liberals, have sustained the basic state pension at an inadequate level when the Chancellor of the Exchequer does nothing but boast about all the money he has?

Mr. Darling: Somebody kindly gave me a copy of the Conservative party briefing for this Question Time. I see that the hon. Member for Southend, West (Mr. Amess) has opted for suggested question No. 4. To be fair to him, I must say that he added one original observation, about his mother.

First, he is right that a growing number of pensioners were living in poverty. The 400,000 figure to which he referred relates to the period immediately prior to the introduction of the minimum income guarantee, which he and his party oppose. As a result of the policies that we are implementing, Britain's poorest pensioners will be getting nearly £20 more a week from next April, through the increased minimum income guarantee. That demonstrates that we now have a Government who are

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helping not only all pensioners, including the hon. Gentleman's mother, but the poorest pensioners in the country, who, thanks to the Government, are some £20 a week better off. We have done more for pensioners in five years than the Tory Government did during 18 years in office. At the previous election, the hon. Gentleman ran away from Basildon; I think that he will run away again at the next election.

Mr. Gerald Kaufman (Manchester, Gorton): Has my right hon. Friend received representations from the mother of the hon. Member for Southend, West (Mr. Amess) or anybody else about the fact that the Conservative party's fraudulent one-year pensions increase offer will be paid for by stealing £2 billion from pensioners every year and by abolishing the winter fuel payment, the free television licence and the Christmas bonus? Were there any representations about the fact that, although the Liberal Democrats called the 75p increase an insult, it was precisely their policy for this year?

Mr. Darling: My right hon. Friend is right. The Conservatives' commitment to pay pensioners £10 more a week, about which we can read in today's edition of The Daily Telegraph, is a complete fraud. What the report does not say is that they are proposing to remove the £200 winter fuel payment, free television licences for over-75s and, indeed, the Christmas bonus--a payment that the shadow Chancellor previously called a much-appreciated addition for older people.

On top of that, the Conservatives ignore the fact that about 500,000 pensioners have no entitlement to the basic state pension and would lose all their £200 winter fuel payment. One million people have only a reduced entitlement to pensions and would also be worse off. Of course, 1 million men aged between 60 and 64 would get absolutely nothing.

We can see clearly that if people vote for the Conservatives at the next election, it will cost them £200 a household. I think that they will see that the Tories are once again trying to con them into believing that they can do more for pensioners, when the truth is that they could not, as they would not have the additional money to spend. People will remember that, in this Parliament, the Government are doing more for pensioners than the Tories ever did during the 18 years that they were in office.

Mr. Steve Webb (Northavon): The Secretary of State likes to be known as the pensioners' champion. Last winter, he oversaw the highest level of excess winter deaths among pensioners for nearly a quarter of a century. Is he content that he has taken sufficient steps between last winter and the one that we are about to enter to prevent tens of thousands more unnecessary winter deaths among pensioners?

Mr. Darling: As I told the hon. Gentleman last week when he asked the same question, we introduced the winter fuel payment because we recognised that too many pensioners were dying, in many instances because they could not afford to heat and eat adequately. That is why we have increased pensioners' incomes through the minimum income guarantee, which I think the hon. Gentleman is against. He was when I last asked him about it. Perhaps this week Liberal policy is slightly different. The MIG will mean that incomes will increase for the

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poorest pensioners by nearly £20 a week. In addition, from today every pensioner household will receive a payment of £200 to be used towards winter fuel payments. That is much more than the Liberals ever promised to deliver.

I think that the hon. Gentleman will accept that we are taking action to deal with a serious problem and one that should have no place in a civilised society. However, that is the legacy of 18 years of Tory Government.

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