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Pension Credit

4. Mr. John McFall (Dumbarton): What plans he has to inform older people of the pension creditproposals. [150483]

The Minister of State, Department of Social Security (Mr. Jeff Rooker): We set out our proposals for how pension credit will work in the consultation paper published on 9 November. That has been made widely available and is free of charge. At the latest date, we had issued more than 4,000 papers. The website has been available since the date of publication.

Mr. McFall: Does my right hon. Friend agree that the shame and scandal of the pension industry is that, far from being rewarded to date, those on occupational pensions and those with savings have been penalised for their thrift and prudence? Does he agree also that the consultation document changes the pension landscape for the first time? Will he reassure the many millions of pensioners that something will now be done for those who had the foresight to save for their retirement? Will he ensure that once he has studied the consultation document proposals they will be made available to everyone so that everyone can claim what is his or her right?

Mr. Rooker: My hon. Friend is perfectly right. It does not pay to save in this country, and it never has since 1948. The pension credit will reverse that. For the first

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time, it will pay to save, and that message must go out. More than half the pensioner population--more than5 million people--will gain directly when pension credit is introduced. Our plan is to introduce it in 2003. There have been more than 400 responses to the consultation document. The closing date was only last week, and we have not analysed all the responses, but to the best of my knowledge not one submission has opposed the pension credit. We thought through the policy idea before we published the consultation document, and it has received universal approval.

The flowers on the Opposition Benches sometimes wilt--I know that you do not like us criticising them,Mr. Speaker--and their policies change every week. The pension credit system will be universally successful and will be seen to benefit more than half the pensioner population.

Mr. Paul Burstow (Sutton and Cheam): The Minister talks of the beneficiaries of the policy, but does he not accept that, as a consequence of the implementation of the pension credit, more than half of this country's pensioners will be forced on to means-tested benefits? That is a direct consequence of the Government's commitment to targeting, rather than investing in the universal basic state pension. Our policy is clear. Why do the Government not accept that their policy consigns pensioners to a future in which the basic state pension will wither away?

Mr. Rooker: If that is a signal that the Liberal Democrats oppose the pension credit, which will directly benefit 5.5 million pensioners, it is fine to have that on record. One cannot equate the language of the means test with the proposed pension credit. It is not a weekly means test; it is not an annual means test; it is not even a bi-annual means test. Pensioners will be examined on their circumstances at the age of 65, and again at the age of 75. If anything changes in the meantime, they will not have to report it. If they want to make an extra claim, that will be fine. Once they are over the age of 75, there will be no further examinations. To equate that with what has happened since the early 1930s and 1940s and the language of the means test, when over 50 per cent. of pensioners will benefit, is a travesty of the proposal.

Mr. David Willetts (Havant): Is the Minister aware that the Institute of Fiscal Studies said that the abolition of capital rules and the new pension credit could leave some pensioners "worse off"? Will he give the House and pensioners an assurance that no pensioner will lose out as a result of the changes in 2003?

Mr. Rooker: The thrust of the IFS's report supported the pension credit, which will make the biggest single contribution to pensioner incomes under any Government since the start of the welfare state. Of course, we made it plain in the consultation paper that the final shape is not clear; that was the reason for consulting. The plan is not that people will lose out. The fact is that in April the relaxation of the capital rules--which were frozen for years under the previous Government--will be of substantial benefit to 160,000 to 200,000 pensioners. Our

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plan is to abolish capital rules under pension credit. It is ludicrous to argue that that would disadvantage pensioners.

Mr. Willetts: It is appalling that the Minister cannot give a simple assurance to pensioners that the changes in 2003 guarantee that no pensioner will be worse off. There is no point in his talking about a change in the capital rules now; we want that simple assurance. If he cannot give it, pensioners will have been warned that his changes in 2003 could mean that some with modest savings will lose out.

Mr. Rooker: The hon. Gentleman is talking about the figure that is below the capital rule at present. We have made it abundantly clear that 5.5 million pensioners will benefit from the change and get direct extra cash. Unlike the previous Government, we will for the first time ever reward pensioners with small occupational pensions and people who continue to receive modest earnings after their retirement. The credit is not exclusive to those who receive pensions. It is not intended that the abolition of capital rules will disadvantage pensioners who, in ordinary terms, have tuppence ha'penny in the bank. I have already said that.

Winter Fuel Allowance

5. Mr. David Winnick (Walsall, North): What the cost is of the winter fuel allowance paid in the winter of2000-01. [150484]

The Minister of State, Department of Social Security (Mr. Jeff Rooker): We have made about 11 million winter fuel payments so far this winter, at an estimated cost of £1.7 billion. At our best estimate, 16,000 of those payments were made in my hon. Friend's constituency.

Mr. Winnick: That is money well spent, bearing in mind the climate at the moment. Has my right hon. Friend found any pensioners in his constituency or elsewhere who have described that sum of money as "a gimmick"--the description used by Conservative Front Benchers on numerous occasions? Why was there no such help before the Labour party came to office in 1997?

Mr. Rooker: It was basically because the other lot did not care--not to put too fine a point on it. That is the truth. The winter fuel payment of £200 per household has proved extremely popular. It is double last year's payment and how it could ever be described as a gimmick, I do not know.

Mr. Ian Bruce (South Dorset): A number of my constituents have contacted me, having listened to Ministers saying that all pensioner households would receive the winter fuel payment, but having subsequently discovered that because they did not turn 60 or 65 by the middle of September, they would lose out--as did those who were in nursing homes. Will the Minister be more careful in presenting such policies? Does he agree that if the payment were a top-up of weekly benefits, all would benefit from it?

Mr. Rooker: That is another change of policy. I understand why some people argue as the hon. Gentleman

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does. As for all benefits, there are eligibility criteria, one of which is the date. We had to fix a date, which, I recall, was in September. That was fixed so that we could guarantee that the majority of payments were paid before Christmas. If the date had been set any later, we would not have been able to achieve that. We delivered on that commitment. For pensioners who were eligible on the relevant date--that is the factor--those payments were made before Christmas. The only payments that are still being made are to those who must claim. In general, those are men between the ages of 60 and 65, as the hon. Gentleman well knows.

Mr. Ronnie Campbell (Blyth Valley): Has my right hon. Friend any plans to abolish the winter fuel allowance? I ask because in my constituency, "Focus", the leaflet from the Liberals, stated that they are the only ones who would retain it.

Mr. Rooker: I expect that for every Liberal "Focus" in one constituency pledging one policy aspect, we can find another one in another constituency promising the exact opposite. The only thing that the two major parties have in common is suffering from the fact that the Liberals do not have a consistent policy. The Labour Government invented the winter fuel payment, and we have increased it year on year. We are committed to keeping it, as the Prime Minister said recently.

Mr. Archy Kirkwood (Roxburgh and Berwickshire): The winter fuel payment is safe in our hands. The winter fuel allowance for households in which there is someone over the age of 60 has provided invaluable assistance given the disastrous snow storms that we have had in south-east Scotland. The allowance will make a valuable contribution to households suffering from the effects of the inclement weather. Will the Minister confirm that severe weather payments, which are also available through the social fund to people who are on means-tested benefits, will be triggered? They are a valuable addition to households in south-east Scotland and other parts of the United Kingdom that have suffered severe weather. Will the right hon. Gentleman assure us that departmental officials will do all that they can to get those payments made, and that regions such as south-east Scotland will receive severe weather payments in the immediate aftermath of the storms?

Mr. Rooker: Yes. For those on means-tested benefits, cold weather payments of--I think--£8.50 a week, which are quite separate from winter fuel payments, have been triggered since the onset of winter. So far, we have made more than 3 million payments at a cost of £28 million. The vast majority have, by definition, been in the north of the country, particularly Scotland. They are triggered and paid as the conditions are met.

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