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9.6 pm

Mr. Mark Simmonds (Boston and Skegness): I represent a constituency that contains many less affluent pensioners in urban and, in particular, rural areas. I did not appreciate the comment of the hon. Member for Hendon (Mr. Dismore) that most Conservative Members represent people with large share portfolios. That is absolute nonsense.

I warmly welcome any proposals that attempt to eradicate pensioner poverty. I have no objection to ending the current iniquitous paradox of the minimum income guarantee system that penalises thrift and saving. Indeed, I should like to see a system that encourages people to put money aside and rewards financial responsibility. I strongly believe in the independence of the individual and a reduction in the reliance on the state, enabling and facilitating people to make choices and take responsibility for their own life.

The current system, which requires ever-larger numbers of pensioners to claim moneys through means-testing, is considered, not just by hon. Members on this side of the House, but by the very pensioners whom it affects, to be demeaning and degrading. It carries a stigma for many pensioners. Many are frightened by the process. That is borne out by the figures that were discussed earlier. There is a tremendous variance, but if between a third and a fifth of those who are entitled to claim minimum income guarantee fail to do so, there must be something wrong with the system.

As always with the Government, there is a great divergence between rhetoric and action. As my hon. Friend the Member for South-West Bedfordshire (Andrew Selous), said, both the Prime Minister and the Chancellor have said that they wish to reduce means-testing for pensioners, if not eradicate it altogether. However, not only does the Bill fail to reduce means-testing or to make an attempt to reduce it, it vastly increases the propensity to means-test.

Between 1979 and 1995, the proportion of pensioners on means-testing fell significantly, from 57 per cent. to 38 per cent. Since 1997, it has increased significantly. According to the House of Commons Library, up to 60 per cent. of pensioners will be means-tested by 2003.

The two component parts of the pensions credit—the guarantee credit and the savings credit—extend the reliance on the state into the future, which will further act as a disincentive for pensioners to save.

It is my view that the endless and pervasive intrusion into and manipulation of people's lives by the state is a deliberate attempt by the Government further to weaken the individual's responsibility and enhance reliance on a centrally controlled state. Pensioners, like so many other responsible groups in our country, want to be self-reliant and to be treated with dignity. Extensive means-testing does not fit comfortably with that ambition.

The uniform criticism of the Bill, among everyone except Labour Members, is of its overriding complexity, which will deter claimants and lower take-up rates. I was astonished when the Secretary of State dismissed as nonsense the fact that there is a causal link between complexity and take-up rates. That is staggering, especially when one bears it in mind that the National Association of Citizens Advice Bureaux has said:

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If the House is to attempt to help those on low incomes, we must surely be honest and look at why people who are entitled to claim benefits—whether the minimum income guarantee or the new credit—are not doing so. Just as the critical test of a successful tax is collectability, for benefits the measure of success must be simplicity and therefore take-up. The Government must take responsibility for increasing the complexity and exacerbating the problem via the contents of the Bill

I have four specific points that I want the Minister to address. First, I understand that the guaranteed credit will subsume the premium paid to carers and severely disabled people. Will she take this opportunity to make it clear that these very hard-working and vulnerable people will not be made worse off?

Secondly, in the Bill it is proposed to set up a pensions service, and I believe that there will be only 26 offices. To my mind, that will eradicate the personal contact that has been mentioned, with home visits allowed only in exceptional circumstances. I see the Minister shaking her head, and I hope that she will be able to tell me that I am wrong. Many people who currently have contact with pensions professionals believe that they will not be able to do so under the proposals.

Thirdly, the Bill contains a change in the analysis to a five-yearly rather than a weekly assessment. That may not eradicate bureaucracy but may make it easier for people to abuse the system. What safeguards and structures will be put in place to ensure that abuse of the kind that happened with individual learning accounts cannot take place?

Fourthly, what will the pension credit do to close the savings gap?

The Government's pensions strategy is at best confused. To be more blunt, it is in a mess, from the perfidious and pernicious tax on people's pension funds to the shambles of the stakeholder pensions and the Government's opposition to annuity reform. The Bill further complicates an already over-complex area and increases means-testing for the section of society that least wants it. The solution surely lies in increasing the basic state pension for the specific targets of harder-up pensioners.

9.14 pm

David Cairns (Greenock and Inverclyde): I shall endeavour to be brief. I welcome the Bill, and I believe that in my constituency, which is in the top third in the United Kingdom in terms of pensioner numbers, it will be welcomed for the reasons outlined by many of my hon. Friends, such as the sheer sense of iniquity that people have felt about saving all their lives and losing out under the current arrangements, which has been the perception. Those complaints are always accompanied by detailed descriptions of pensioners who live three doors down who have smoked and drank all their lives, but who seem to be better off than our constituents. However, our constituents will welcome the Bill, and so they should.

Much of this evening's debate, which I should like to respond to briefly, has focused on the role and nature of means-testing. I accept the Government's argument that the type of means-testing outlined in the Bill is

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quantitatively different to the means-testing that has gone before, as well as qualitatively different, given that it will not involve a weekly means test, but an assessment every five years or so.

I agree entirely with my hon. Friends the Members for Hendon (Mr. Dismore) and for Aberdeen, South (Miss Begg) that extending means-testing to the extent that proposed in the Bill will dilute the stigma—if a stigma can be diluted—so that it becomes less of an onerous burden on people. However, it has become abundantly clear during the debate that, far from abolishing means-testing, the Conservative party would maintain it and increase the stigma of the means test.

I make no apology for reintroducing our 68-year-old poor friend, who was mentioned by my hon. Friend the Member for Stalybridge and Hyde (James Purnell) and by the Secretary of State himself. Such people are not entirely invented; they exist in all our constituencies. Confronted with the reasoned amendment that suggests that people over the age of 75 should be given extra help, we have repeatedly asked what we should say to our 68-year-old poor pensioner. The answer is that he or she would be means-tested, so the poorer people who need the extra help would be means-tested. How on earth would that remove the stigma of means-testing? How would that progress beyond a time when reliance on means-testing was seen as a bad thing, when the very poorest people were told that they would have to put up with means-testing?

Under the new scheme, those who are not poor, but who are by no means rich, will be brought into a system that is akin to one that the Borrie report, on which the hon. Member for Northavon (Mr. Webb) was an esteemed specialist adviser, referred to as the partial affluence test. I never liked that expression; it would not kid anybody about what is involved in reality, but the proposal is qualitatively different to the old means-testing, which involved rooting around people's houses looking for valuables to offset any income that they might have received.

I want to focus my remaining remarks on the pension service. Uptake is not just an issue used to scaremonger; it is a genuine concern, and Labour Members are as concerned about it as anyone else. It is important that the system has adequate take-up, and the key to that must be a pro active pension service, which goes out of its way to ensure that people get what they are entitled to. It has to allow people to interact with it in a broad range of ways by telephone, on the internet and by post. We know that the telephone is the Government's preferred route because they tell us that pensioners prefer it. I accept that, but I agree with my hon. Friend the Member for Hendon, who said that if a freephone number were used, so much the better. The number of silver surfers on the internet will grow in years to come. Although I appreciate that there will not be a network of local offices, the opportunity to interact face to face is important. I would welcome the Minister's reassurance that face-to-face interviews will still be allowed to play a part.

The pension service must act as a gateway, allowing people to get quicker housing benefit assessments. As we know from the operation of the working families credit, particularly in the new Jobcentre Plus scheme, things all wander along absolutely marvellously until they hit the

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brick wall of housing benefit assessments, when people are not any further forward. Although I welcome what has happened, such things have to be improved in future.

There was some confusion about the role of the call centres. There will be 26 call centres throughout the country, and it has been said that confusion might arise in understanding cockneys and geordies, so there is a good argument for locating all the call centres in Scotland because everyone understands a Scottish accent. I had hoped that Mr. Speaker would be in the Chair when I made that comment. In my constituency, there are two excellent call centres—those of One to One and the Royal Bank of Scotland—which shows that people are used to interacting with call centres and to the professional service that they receive from them, and there is no reason why they cannot work in the public sector as well.

I welcome the Bill. It makes an important contribution to those people who feel aggrieved. I hope that we reject the reasoned amendment and stick with the Government's proposals.

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