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State Pension

4. Mr. David Amess (Southend, West): What recent representations he has received on the level of the state retirement pension. [443]

The Minister for Pensions (Mr. Ian McCartney): We are providing significant extra help for all pensioners, including a £200 winter fuel payment and a minimum income guarantee of more than £92 a week for single pensioners and £140 a week for couples. This year, we have increased the basic state pension by £5 a week for single people and £8 a week for couples. From April 2002, there will be further increases of £3 a week for single people and £4.80 for couples. In total, we are spending £4.4 billion more on pensioners in 2001-02 alone as a result of the changes that we have introduced. That is nearly £3 billion more than if we had restored the earnings link.

Mr. Amess: I welcome the Minister to his new role. Does he recall the Labour leader saying during the general election campaign that one of his biggest regrets was the insulting 75p increase that he gave to our pensioners? Why have the Government still got it in for our pensioners? Will the Minister comment on the official House of Commons Library figures that tell us that there are 500,000 more senior citizens living in poverty since this rotten Government came to power in 1997?

Mr. McCartney: The hon. Gentleman's shouting does not improve the quality of his response to my answer. The truth is that he has some brass neck. The Tory Government doubled means testing and left us a legacy not just of people in poverty, but of a generation of older people in poverty. This Government have tackled poverty in old age. This Government have put in extra spending of £2 billion on the poorest third of pensioners, which is five times more than the earnings link would ever have given them. This Government have introduced the winter

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fuel payment, free TV licences and the minimum income guarantee, all of which Conservative Members opposed and still oppose. That is why a lot of them were pensioned off at the election and we were put back into power.

Mr. Bill O'Brien (Normanton): I welcome my right hon. Friend to his new post. Will he take note of the response that I have received from pensioners who welcome the state retirement pension increase? However, will he also consider the concerns over increased costs for telephones, water and sewerage and carefully monitor energy costs to ensure that pensioners get full value for the £200 winter fuel allowance and receive all that they are entitled to?

Mr. McCartney: The Government will introduce a new pension service whose purpose will be to ensure, quickly and effectively, that pensioners get all the benefits to which they are entitled. That is also true of our work with local government, and we are considering "Better Government for Older People" to achieve improvements in services for older people. In particular, when local government services are being designed, the needs of older people must be taken into account. With those links, in terms of income increases and improvements in services, this Government have become the first in living memory to put pensioners on the right side--we are the pensioners' advocate and the pensioners' ambassador.

Dr. Julian Lewis (New Forest, East): I warmly congratulate the Minister on his new appointment. Will he give the House an absolute guarantee that the Government will never again give pensioners a miserly 75p increase in their basic state pension?

Mr. McCartney: I thank the hon. Gentleman for his kind remarks, and I hope that the ride is not as bumpy as some of his hon. Friends would like to make it for me. We will always do the right thing by pensioners, which is why we will introduce a pension credit Bill during this parliamentary Session. We have put other measures in place to ensure that no pensioner in Britain has to live in poverty, as they did under the Tories.

Employment Trends (North-West)

5. Mr. Andrew Miller (Ellesmere Port and Neston): If he will make a statement on employment trends in the north-west in the last five years. [444]

The Minister for Work (Mr. Nicholas Brown): In the past five years, employment in the north-west has grown by 187,000, and 73 per cent. of all those of working age are now in employment, compared with 69.2 per cent. five years ago.

Mr. Miller: I welcome my right hon. Friend to his new post. May I bring to his attention a success story involving the Cheshire Oaks, Coliseum and Blue Planet complex in my constituency, where partnership between his Department, local government and the private sector has resulted in real jobs for people from some of the areas of highest unemployment in my community? I was pleased to see the Employment Service taking a lead, working

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with me to help to prepare young people from those areas for work. I commend that policy to my right hon. Friend as a model for other people to consider.

Mr. Brown: I am grateful for my hon. Friend's comments. The proactive approach underpins the Government's roll-out of Jobcentre Plus. We intend to work as proactively as we can with people who are out of work in order to get them into work and to enhance their incomes.

Mr. Graham Brady (Altrincham and Sale, West): I welcome the Minister to his brief, and I hope to shadow him for a little longer at least. The Opposition have been warning for a long time that the Government have failed with the new deal because, for far too many people, it is a revolving door that takes them back on to benefits and into long-term dependency. Now that the TUC has also warned that participants in the new deal are being churned through unwaged new deal options, will the right hon. Gentleman take urgent steps to re-focus the scheme on getting people into real, sustained jobs?

Mr. Brown: I thank the hon. Gentleman for welcoming me to my post, and I note his ambitions for retaining his. I am afraid that I cannot help him with that, as I have little influence over who the new leader of the Conservative party will be. The hon. Gentleman's attitude towards the work of the Employment Service and the proactive approach of the new deal is fundamentally wrong. It is right that the Government should intervene to help those who are out of work into employment, and to work with employers to ensure that the jobs into which we help people can be sustained and provide enduring employment opportunities so that people can be enriched and their standard of living improved, which is what it is all about.

Pension Credit

6. Mr. Peter Pike (Burnley): What consultation he will have on the proposed pension credit. [445]

The Secretary of State for Work and Pensions (Mr. Alistair Darling): More than 400 responses were received to the pension credit consultation paper. As indicated in the Gracious Speech, we intend to introduce legislation in this Session of Parliament.

Mr. Pike: I thank my right hon. Friend for that answer. Does he recognise that, although most pensioners feel that the Government have done an excellent job in the past four years--compared with the previous 18 years under the Tories--pensioners who have small savings or a second pension sometimes end up worse off than those on the minimum income guarantee? Will he assure those people that that is exactly the problem that the Government intend to address with the pension credit, and that the consultation process will ensure that we get it right before we introduce the credit in 2003?

Mr. Darling: My hon. Friend is right. There cannot have been a candidate in the recent general election campaign who did not meet a pensioner who had modest savings or a modest occupational pension and who asked, "What's in it for me?" The answer is the pension credit.

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We believe that if pensioners have modest savings in the bank, they should not be penalised for that. We also believe that if someone has a small occupational pension, that should be added to rather than resulting in money being taken away.

The pension credit will do two things. First, it will provide a basic guarantee of £100 a week. My hon. Friend may be interested to know that, as a result of the recent take-up campaign, more than 100,000 people have now gained extra money through the minimum income guarantee. Secondly--critically--the pension credit will ensure that people receive something for their savings, and that their years of thrift and sacrifice are rewarded rather than their being penalised under the present system.

Mrs. Jacqui Lait (Beckenham): I, too, congratulate the Secretary of State on his new responsibilities.

Can the right hon. Gentleman give us some idea of his estimate of the number of people who are eligible for pension credit? What solution does he propose to the difficulty relating to the interaction of housing benefit, council tax benefit and pension credit?

Mr. Darling: I thank the hon. Lady for her congratulations. Our cup is overflowing today, and we shall make the most of it. I do not suppose that it will last, although we look forward to congratulating one or two Conservative Members in a few months' time, depending on what happens after the leadership campaign.

The pension credit consultation paper made it clear that we expect just over 5 million pensioners to gain from the proposals. That gives some indication of the large number of retired people who have modest savings, and a small occupational pension, and who I believe lost out for years when they ought to have received a reward for their thrift.

As the hon. Lady will know, the Government are determined to change the interaction of housing benefit not just with pension credit but with other aspects of the tax system. We are improving the administration of housing benefit, but we also want to introduce more fundamental structural changes to it. That will take time: the housing benefit system is extremely complex, and the changes that are needed are far-reaching. Pension credit, however, is an extremely important first step, because it means that for the first time it will pay to save. All those who have been in a quandary about whether they should save for their retirement will now know that, if they qualify for the credit, they will be better off for every pound that they save. We are also making changes to the tax system to help pensioners who pay tax.

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