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2.41 pm
Mr. Neil Turner (Wigan): I have some experience in this subject because of the previous job of my boss and because I have just had to do some work for my mother. I certainly do not recognise the picture painted by the hon. Member for Sutton and Cheam (Mr. Burstow). My mother had to move from her home in Carlisle to the Wigan area, to be nearer to me, and I did much of the work involved. I found plenty of choice of residential homes and I managed to get her into a good one. It was brand new and around half full.
Wigan does not have problems with bed blocking, because many of our old people are cared for at home by our excellent social services department. That may be the answer: we have an excellent Labour-run council, as confirmed by the comprehensive performance review performed by the independent district auditor. The Sutton and Cheam local authority, of course, is not as good.
I also did not recognise what the hon. Gentleman—or the hon. Member for Sutton Coldfield (Mr. Mitchell)—said about pension credit. I applied for the minimum income guarantee, as it then was, on behalf of my mother.
Mr. Webb: Why did she not do it?
Mr. Turner: She wanted me to do it because she has problems with her hearing. I was happy to do it and it took about 10 minutes. There were no byzantine forms to fill in and the only difficulty was trying to find out her national insurance number. The payment came through in about a fortnight and was backdated. The difficulties outlined by the hon. Member for Sutton and Cheam do not exist. The form-filling and other obstacles that he described do not happen for the majority of pensioners. They may arise in the Pension Service, but not for the person making the application.
Mr. Webb: I apologise if I sounded defensive when I asked why the hon. Gentleman's mother did not apply herself. My point was that she had the advantage of having an able and articulate son to deal with the system for her, because she did not feel able to deal with it herself. Had the money been added to the pension, the process would not have been necessary.
Mr. Turner: I shall deal with that point shortly. My experience is shared by hundreds of thousands of people. Most pensioners in my constituency find the system fairly easy, once they overcome the perception—promoted especially by the Liberal Democrats—that the scheme is difficult. It is not, and it puts people off when they are told that they have to fill in 40 pages of complicated forms.
My mother was notified a couple of weeks ago of how much she would receive from the pension credit, and it is significantly different from what she would have got had we followed the Liberal Democrats' proposals. According to the hon. Member for Sutton and Cheam, those over 75 would receive an extra £19 a week to add to the single person's pension of £77.45, so she would have received £96.45. She currently receives £102.50 under the pension credit. So according to the Liberal Democrats, my 90-odd year old mother should have her pension reduced by £6 a week. Others would benefit from their proposals. For example, Baroness Thatcher would get an extra £19 a week, and I am sure that she would find a good use for it. However, the Liberal Democrats will have great difficulty explaining to the people of Brent, East, let alone anyone else, why their proposal would mean that the poorest pensioners would lose more than £6, while those who are better off would gain £19 a week.
Pension credit is important in getting extra money to the very poorest. That is a socialist principle that I am happy to support. It is allied to the recognition that people who have small savings or a small pension should be rewarded for their thrift, not penalised, as in the past.
We must also face the problem mentioned by the hon. Member for Northavon (Mr. Webb), which is the difficulty that some people have in accessing various services for pensioners. That is why we have made huge changes to the way in which the Pension Service
operates. A fortnight ago, I held a forum for pensioners' groups in the Wigan constituency. Members of the Pension Service staff came along to answer questions and give details of the pension credit, including the relevant telephone numbers. I shall visit the town centre again soon with staff from the Pension Service to ensure that people understand the pension credit and how to apply for it.The whole point of setting up the Pension Service is so that it can play a much wider role. Far too often, pensioners are passed from one agency to another, from a local authority to the NHS and back again, or from one voluntary body or council department to another. It is a bureaucratic merry-go-round that can be debilitating for pensioners. The Pension Service is designed to be a one-stop shop to ensure that services for pensioners, be they public or voluntary, can be much more easily accessed. Pensioners can also obtain advice about the services to which they are entitled. People with difficulties hearing, such as my mother, seeing or understanding the forms will be able to contact the Pension Service and receive the help they need, perhaps including a home visit. It is important that the Pension Service be seen as part of an overall package with the pension credit to ensure that pensioners get their entitlements.
I applaud the Government's advances on pensions. We introduced the minimum income guarantee early to tackle pensioner poverty. We have also introduced the winter fuel allowance, free eye tests and free television licences. In real terms, £3 billion has been given to pensioners over and above what they would have received if the pension had been increased in line with inflation. The pension credit will mean an additional £2 billion from October.
I also welcome the introduction of the Pension Service to ensure that people can access services more readily and obtain the help that, all too often, they need. I welcome the help that the Government have given to future pensioners. We sorted out the problems with the state earnings-related pension, left by the previous Government. We also sorted out the problems with the financial services industry after the desperate mis-selling of private pensions, which left so many people high and dry with the loss of pounds and pounds a week. We have also introduced the state secondary pension, with the recognition that it gives to carers and the help it will give them in the future. Of course, we have also introduced stakeholder pensions. Despite what the hon. Member for Sutton Coldfield said, people are taking them up, as they allow those who would not otherwise have a pension to have access to a pension for their future.
Most important in respect of the immediate future is the pension protection fund. It will guarantee that people whose company pension schemes have gone bust will get protection in the future.
I shall be happy to support the Government amendment and to oppose the motion.
2.50 pm
Mr. Nigel Waterson (Eastbourne): It is always a pleasure to follow the hon. Member for Wigan (Mr. Turner) in these debates. One thing to have emerged from the debate is that, whereas Sutton and Cheam is clearly a near hell hole for older people's services, Wigan
is a veritable garden of Eden. It is a place in which we should all aspire to grow old, under the hon. Gentleman's benign leadership.I am told that I should begin by declaring an interest, in that I have some private pension provision of my own. This is my first outing, if that is the right word, as the newly appointed official Opposition spokesperson on older people's issues. In modern jargon, my brief is crosscutting, and although there have not been many signs of joined-up government in the debate so far, I can promise joined-up opposition on these issues.
Lots of important issues have been covered in the debate. I cannot do them all justice, but I shall start with the issue of care homes, which is close to my heart. There are many good care homes in my constituency, and they make up a significant part of Eastbourne's local economy. However, a number of very good ones have closed recently, as a direct result of Government policy. The Government were told—by us, by the Liberal Democrats and by everyone outside the House who knows anything about care homes—that they were making a massive error with their legislation on the matter. However, they blundered on and insisted on their proposals and, as we have heard, the latest figures show that 13,400 care home places disappeared in the 15 months to April this year.
My hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) explained very graphically the particular problem in Birmingham. However, the problem is replicated up and down the country, with many good private care homes being forced to close. All too often, councils insist on paying themselves much more than they pay the private sector, even though the accommodation that they provide is relatively poor.
In collaboration with the Liberal Democrats, the Opposition attempted not that long ago to increase pensions significantly for older pensioners. We know that older pensioners are those most likely to be living in poverty. I am sorry to say that our attempt was defeated.
We have heard a great deal about funded pensions. My hon. Friend the Member for Sutton Coldfield reminded us that they are a great British success story, but they are seriously threatened by a combination of factors. My hon. Friend the Member for Havant (Mr. Willetts) has rightly likened the matter to the film called "The Perfect Storm". The stock market has fallen, and people now live longer—although that greater longevity is of course welcome. However, other matters are within the Government's control, such as the Chancellor's £5 billion annual raid on pension funds.
There has been an apparent lack of urgency when it comes to tackling the problems. Another Green Paper has been published, but the Government could and should do a lot more to increase and restore confidence in funded pensions. At least one fifth of company pension schemes have closed in the past 12 months. That is all the more worrying, as the Watson Wyatt survey on which that information is based predates the extra burdens likely to be placed on companies by the Government's pension protection scheme.
The Government's stated aim is to restore confidence in funded pensions, which is vital. A whole generation of young people cannot be persuaded that putting money into pensions is the smart thing to do, because they see stories about problems with pensions every time they open a newspaper.
The TUC, for example, has spoken about the erosion of the notion of shared responsibility, and has noted the decline of the mixed-economy approach to pension provision. The hon. Member for Wolverhampton, South-West (Rob Marris) outlined an even more dramatic problem that arises when companies go bust and take the pension fund down with them.
There is a great deal of work to be done. A policy of compulsion appears to be developing through the mists of Liberal Democrat thinking, but the Conservative party does not believe in compelling people to make particular pension provision. However, we believe that the forces of inertia should be harnessed, so that people have to opt out of that sort of provision for their futures.
That brings me neatly to the issue of pension credit. As I noted in an earlier intervention, we on the Select Committee on Work and Pensions were privileged to have the Secretary of State appear before us as a witness this morning. When I put it to him, he readily conceded that, even on the Government's projections, a million pensioners will not receive pension credit even though, on the face of it, they are entitled to it.
Two fundamental matters wholly undermine the Government's approach to the policy, and the crucial one is take-up. As with so many of these benefits, take-up is limited.
The Government have been very dismissive about criticisms of this flagship policy. Only recently, the Department criticised Mr. Mervyn Kohler, head of public affairs at Help the Aged, for his comments on the system. Clearly unbowed, he said:
- "I'm afraid I rather upset them. It seems ministers are very tender at the moment. But it is not my fault if they design a system which is so Byzantine that no one can understand it."
The Secretary of State was almost alarmingly upbeat about the other matter that I put to him—whether the system can cope. The Child Support Agency offers an example of what happens when an old formula combines with a new technology, and now we have a possibly even more potent combination—a new formula and an old technology. It remains to be seen whether the fiasco of the tax credits, which caused our mailbags to be so full in recent months, will be replicated.
Some of the claims in the Government's advertising campaign for pension credit are simply wrong and untrue. The central claim—that every pensioner will now enjoy a minimum income of £102.10—is simply untrue. The guaranteed income will be a mixture of existing pensions, savings income and, where necessary, a pension credit top-up. However, any savings will be assumed to generate a notional income of 10 per cent. a year. That is not bad; I wish that I could plug into that sort of return, rather than the more realistic 3 per cent.
It is no wonder that the Department for Work and Pensions told The Sunday Telegraph that the publicity surrounding the pension credit had been kept "deliberately low key".
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