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Mrs. Claire Curtis-Thomas (Crosby): What the hon. Gentleman is saying is at odds with my own experience. Thousands of pensioners in my community are accessing the Pension Service, and I have repeatedly been told that it is as easy as picking up a phone—the work is done for claimants, and they get returns within days. If that is not the hon. Gentleman's experience in his area, may I suggest that he ask some questions, as that service is available in many other parts of the country?
Mr. Burstow: The Minister may be able to deal with that puzzle in a minute, because the Government's own figures are based on the assumption that they will fail to get 1 million pensioners into the pension credit. It is for the Government to explain why there is such a difference between what the hon. Lady has been led to believe is happening on the ground and the Government's expectations. Our experience of the system leads us to believe that it will require regular reviews, which means that in reality it will be complicated.
Mr. Nigel Waterson (Eastbourne): May I bolster the point that the hon. Gentleman is making by pointing out that as recently as this morning the Secretary of State himself gave evidence to the Select Committee on Work and Pensions? He accepted my figure when I suggested that 1 million pensioners entitled to the pension credit would not be claiming it, and he expressed a blithe confidence that, despite all the problems with tax credits and the Child Support Agency computer problems, things would be done seamlessly and efficiently when the day dawned in October.
Mr. Burstow: The hon. Gentleman has made a useful point in demonstrating the Minister's acceptance of the figure that I have given. I hope that when Ministers respond to our debate they will do more to allay the concern of many Members about the way in which the pension credit system will operate.
Kevin Brennan (Cardiff, West): Is the hon. Gentleman arguing that, by next year, 2.8 million pensioner households will be better off as a result of the introduction of the state pension credit—a measure introduced by the Government which his party opposed? Is that what he is saying?
Mr. Burstow: What I am saying is that I am more ambitious than this Government. I do not believe that 1 million households should be left in poverty, but the Government seem to be complacent about that and prepared to accept it. They are complacent about the
situation even in 2006, as they expect 800,000 of our pensioner households to continue to live in pensioner poverty.
Miss Begg: Will the hon. Gentleman give way?
Mr. Burstow: I have been generous in giving way and I have given way to the hon. Lady, so I wish to make some progress.
That poverty is made worse by huge council tax increases. The most recent Government figures show that the poorest 20 per cent. of pensioners pay almost four times as much of their income, even after benefits, on council tax as the top 20 per cent. Council tax has a disproportionate impact on the poorest.
Brian Cotter (Weston-super-Mare): I support what my hon. Friend is saying about council tax. In May, I presented a petition on behalf of 5,000 residents in Weston-super-Mare who were concerned about the existing rates. We are now talking about next year, when there will be a further whammy. Does the hon. Gentleman agree that people are very concerned about fairness and ability to pay?
Mr. Burstow: My hon. Friend is right to underscore something that many outside the House feel—council tax has now become the unfairest tax in Britain. It really does hit hardest the poorest and most vulnerable. That is why during the Budget process in this place, we argued that there should be a £100 across-the-board cut in this year's council tax as a way of beginning to alleviate and ameliorate the impact of council tax rises. It is also why the Liberal Democrats still believe that what we need is a fair income tax-based solution to raising local taxes. The Government say in their amendment simply that they are reviewing council tax. Six years after coming into office, they are still reviewing. While they do so, pensioners are getting poorer.
Our motion also addresses the concern felt by many pensioners about the loss of their pension books and the introduction of what the Government confusingly call direct payments. We now have direct payments in the Department of Health and the Department for Work and Pensions. They are totally different and confusing on the ground. Payments into banks, building societies and post office card accounts may make sense for some people, but the option of keeping the pension book should not be discarded so casually. The Government are introducing the post office card account, but it is difficult to apply for. People have to go through six separate stages to make an application, and the account is difficult to use in practice. For example, my hon. Friend the Member for Twickenham (Dr. Cable) found back in July that only one in 10 post office card account applications had been processed. Let us hope that the Government have been able to speed that up.
Even now, it is not clear what happens to pensioners who have an account who fall ill suddenly and have not made any prior arrangements allowing someone else to use their personal identification number. Indeed, if someone else uses their PIN, they will lose their eligibility for a card account.
Mr. John Bercow (Buckingham): Will the hon. Gentleman give way?
Mr. Burstow: I am afraid that I shall not give way at this point.
The same point applies to those who are relying on a number of different carers. We are still waiting for the Government to spell out the details of their exception scheme. If pensioners feel that the pension book suits their needs, they should be allowed to keep it.
We initiated this debate because those are the issues and concerns that are on our constituents' minds. They are on the minds of those who are lobbying Members of this House today. On the ground, people are seeing care homes closing, and confronting the difficulties of finding a good care home for their loved ones. People are forking out a fortune to pay for what they believed was free health care and struggling to make ends meet while coping with a meagre pension and huge council tax rises. This Government have had six years to start to deal with those issues. As a result of their failure, thousands—indeed, millions—of pensioners in this country still feel insecure and feel that this Government are not giving them a fair deal.
1.14 pm
The Minister for Pensions (Malcolm Wicks): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
- "welcomes that from 2004–05 Government will be spending £9.2 billion extra per year in real terms on pensioners compared with the 1997 system; notes this is £5.7 billion more than if the basic state pension had been linked to earnings; recognises that the poorest third of pensioners will be £1,600 a year better off in real terms compared with the 1997 system; applauds Government action for older people on health and social care, fuel poverty, transport and lifelong learning; approves of action to stabilise the care home sector by increasing resources available to councils to increase care home fees where required; supports the Government's commitment to increase resources available for social services by on average six per cent. a year in real terms over the next three years, the expansion of intensive home care support, and the largest ever sustained increase in funding for the NHS; welcomes the real terms increase of 25 per cent. in grant to local authorities since 1997, and the review of the balance of funding between central and local government; further welcomes the successful introduction of universal banking services, giving Post Office access through a number of current accounts, basic bank accounts and the Post Office card account; congratulates Government on its intention to bring in Pension Credit from October; notes eligible households stand to gain on average £400 a year; and applauds the actions of the Government which result in over 1 million people being ready to receive Pension Credit who will gain more money than they had before."
The hon. Member for Sutton and Cheam (Mr. Burstow) raised many such questions, and many of them have huge resource implications. In debating these matters, however, we must avoid two dangers. The first is an excessive negativism and pessimism about the ageing of our population. Let me turn to the words of a former tutor of mine, Professor Richard Titmuss of the London School of Economics:
- "Viewed historically, it is difficult to understand why the gradual emergence in Britain of a more balanced age structure should be regarded as a 'problem of ageing'".
In looking at the demography of ageing, we need to address two trends. First, there are many ways in which we can paint a statistical picture of the general ageing of our population. Back in 1901, a few years before Lloyd George introduced the old-age pension at the generous rate of five shillings, the 65-plus population represented some 5 per cent. of the overall population. Those aged 65 and over now represent approximately 16 per cent. By the middle of this century, 2051, that level will rise to 24 per cent. However, there is another trend that we need to understand—the ageing of the elderly population itself and the rise in the number of people in their 70s and 80s. Back in 1901, only 61,000 people were over 85, but the figure is now 1.1 million and it will be 3 million by 2051. The ageing of the population has major implications for pensions issues and the ageing of the elderly population has particular implications for the social and health care issues that the hon. Gentleman raised.
To give another bit of broad context, we also need to recognise the life cycle of the typical 21st century Briton. The Briton of the 21st century may well spend 20 or even 25 years in education and training, preparing for economic activity. That hugely contrasts with the situation of their grandparents and great grandparents, who would have left school at 14. Of course, although when people retire—we all hope that they will be able to retire later if they wish to do so—they may currently face retirements lasting 20 years, as the century progresses, they may last 25, 30 or more years.
I mention those facts because, in terms of such demography, we need to ask serious questions, as we are doing, about how we will afford education for a long period at the start of people's lives and decent retirements at the end. Although we often have separate debates about those issues, they are linked in terms of resources and life cycles.
We should also avoid generalisations about "the old". We all fall into that trap, and I shall probably do so today. However, when we consider groups of elderly people—some now talk about ageing starting at 50, which I can hardly believe—we are clearly talking, in the light of the fact that some people are now surviving as centenarians, about different cohorts of people with different needs, and about different financial and social circumstances. Such cohorts have different interests and may not agree with each other about the allocation of resources, and we should recognise that.
While much of our debate is perfectly properly about the rights of elderly people to decent health and social care, and decent retirement pensions, let us also remember and pay tribute to the fact that this generation takes very seriously not only its rights, but its duties and responsibilities. It takes its responsibilities seriously in terms of volunteering. Many of our volunteer army are the younger old, who are often
looking after the older old. Many are carers of spouses with dementia or children with serious conditions. We need to recognise the responsibilities taken on by the old, as well as their rights, and obviously we need to combat age discrimination.
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