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Pensioner Incomes
6. Mr. John MacDougall (Central Fife) (Lab): What assessment he has made of the effect of Government policy on the incomes of (a) the poorest pensioners and (b) all pensioners. [153175]
The Secretary of State for Work and Pensions (Mr. Andrew Smith): As a result of Government measures since 1997, including the introduction of pension credit, pensioner households are now, on average, £24 a week better off in real terms. The poorest third of pensioner
households are £30 a week better off. I have today placed in the Library the latest figures for take-up of pension credit at a national and constituency level. They show that 2.18 million households, and 2.62 million individuals, are now in receipt of pension credit.
Mr. MacDougall : I thank the Secretary of State for that response. Does he agree that, after many years of missed opportunities to redress the imbalance in terms of pensioners and their requirements, the introduction of the pension credit scheme is very welcome? For example, in my constituency of Central Fife, 3,091 pensioner households benefit on average by £39.36 a week, and I am sure that they appreciate that. The policy must be very welcome.
Mr. Smith: I thank my hon. Friend for his welcome for the progress that we are making on pension credit in his constituency and throughout the country. Much hard work is going in not only on the telephone lines, but on the 302,000 home visits that the Pension Service has made across the country. That reflects great credit on all the staff who are working to make a success of this important policy of countering pensioner poverty and rewarding pensioners with modest savings.
Mr. Steve Webb (Northavon) (LD): The Secretary of State knows that on average the oldest pensioners tend to be the poorest pensioners. He also knows that his Department's statistics show that older pensioners are the least likely to claim his pension credit. The Government are right to target the winter fuel payment by giving extra money to older pensioners, and they are right to target free TV licences by giving them only to older pensioners. Why will he not be right again by targeting the basic state pension in the same way?
Mr. Smith: The hon. Gentleman acknowledges that a lot more is right with our policies than is wrong. I remember his conceding in a previous exchange that if we were to follow his advice it would mean giving less to poorer, younger pensioners in order to give more to better-off, older pensioners. It makes sense to combine universal entitlements with help especially targeted at the poorest in the pensions system. Thanks to those policies, we have helped 1.6 million pensioners out of absolute poverty and 400,000 pensioners out of relative poverty. We shall keep driving those policies forward to make a success of the war against poverty.
Mr. Stephen Hepburn (Jarrow) (Lab): Can the Secretary of State explain why only half of the 5 million pensioners who are eligible for pension credit claim it? What is he going to do about that?
Mr. Smith: We are, of course, only part of the way through the campaign period to ensure maximum take-up of pension credit. We said that we would write to every pensioner household in the country by June. I am confident that we will achieve that target, and I hope that we will write to every pensioner household before then. I have already referred to the extensive outreach work, which includes more than 300,000 home visits, and there is also TV advertising, press advertising and word of mouth among pensioners, which is increasingly
important. Pensioners commend the friendliness and responsiveness of the service, which is a point borne out by independent research.Returning to older pensioners, as we try—as we must—to drive take-up higher, it is all the more important to work intensively in collaboration with social services and others to identify those older and frail pensioners who are least likely to claim and ensure that they do so.
Mr. Patrick McLoughlin (West Derbyshire) (Con): Since 1997, has the number of pensioners on means-tested benefits gone up or down?
Mr. Smith: Conservative Members keep dragging out the question of means-tested benefits. I am proud that so many more pensioners benefit from the pension credit than gained from the minimum income arrangements under the previous Government. Let us remember that poorer pensioners are getting substantially more than they were in 1997. The £30 more a week enables this Government to make progress in combating pensioner poverty that could only have been dreamt about when the Conservative party froze the real value of the pension year in, year out. The Conservative Government increased it only when they introduced VAT on fuel, which placed so many pensioners in poverty.
Richard Burden (Birmingham, Northfield) (Lab): May I add my welcome for the pension credit's impact on both poorer pensioners and those with small occupational pensions? Does the Secretary of State agree that pensions policies must mesh with our policies on occupational pensions if we are to get them right? Although the pensions Bill will certainly help, may I again draw his attention to the important point made by my hon. Friend the Member for Cardiff, West (Kevin Brennan) about the need to tackle those pensioners who have lost through the failure of occupational pensions, which include not only ASW but firms such as Kalamazoo in my constituency?
Mr. Smith: I acknowledge my hon. Friend's important points about his constituents at Kalamazoo and the success of pension credit. The imminent pensions Bill—we are that much closer to it now my right hon. Friend the Member for Birkenhead (Mr. Field) has spoken—will set up a pension protection fund, which will ensure that in future a pensions promise made will be a pensions promise honoured.
Pension Credit
7. John Barrett (Edinburgh, West) (LD): How many pensioner households in Scotland are in receipt of pension credit. [153176]
The Minister for Pensions (Malcolm Wicks): I am pleased to report that so far, as at 31 January, there were 229,000 households in Scotland, comprising approximately 271,000 individuals, receiving pension credit. We have today published the latest monthly pension credit progress report, including numbers of recipient households in each parliamentary constituency in Great Britain. The hon. Gentleman will
be interested to learn that more than 2,000 households now receive pension credit in his constituency, 73 per cent. of which are financial gainers as a result.
John Barrett : Still only some 50 per cent. of those who are entitled to pension credit have taken it up. What consideration has been given to whether the application process puts people off applying for the pension credit? One constituent wrote to me saying that after answering the questions on the form they felt stripped of all dignity and decided not to bother in the end. What can be done to ensure that those who need and deserve the credit can get through the application system?
Malcolm Wicks: I am sorry about the tone that the hon. Gentleman has adopted. It would have been foolish to try to write to 7 million or more pensioner households across Britain in one week or one month. That is why we have a phased take-up programme. In that way, we can answer the phone calls—we answer 96 per cent. within 30 seconds—and anyone who applies up to October this year will have any credit entitlement backdated to October last year. I am pleased to note that one of the hon. Gentleman's colleagues, the hon. Member for Gordon (Malcolm Bruce), said:
- "I am delighted to see Aberdeenshire pensioners gaining significantly by the introduction of the new Pension Credit."
Mr. Bill Tynan (Hamilton, South) (Lab): The 3,000-plus pensioner households in Hamilton, South are obviously delighted with the average payment of £45 that they are getting through pension credit. Phasing in was vital, and should continue, but does my hon. Friend accept that overpayment because of miscalculation could be a problem in some instances? Will he consider such problems sympathetically, if they occur?
Malcolm Wicks: I am happy to talk to my hon. Friend about any particular problems in his constituency. I doubt that overpayment would occur in many circumstances. While some people bandy around the words "means test", let us remember that under the previous Government there was a weekly means test. Pension credit is a million miles away from that, because we do not seek information about people's finances once a credit has been made.
8. Mr. Alistair Carmichael (Orkney and Shetland) (LD): What steps he is taking to encourage pension credit take-up. [153177]
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): We are currently in the main phase of our marketing campaign for pension credit and have carried out TV and press advertising as well as writing directly to pensioner households. We are working in partnership with organisations such as Help the Aged, Age Concern and the National Association of Citizens Advice Bureaux at a national and local level to ensure that as many pensioners as possible take up their entitlement.
Mr. Carmichael : I thank the Minister for that answer. However, in my constituency, fewer people receive
money through the pension credit than under the minimum income guarantee. As for the letter-writing campaign, is the Minister aware that some 72,000 pensioners entitled to pension credit will die before the Government get round to telling them about it? Those figures are from the Library. How bad do things have to be before the Government admit that their scheme is failing?
Maria Eagle: I am surprised to hear the tone of the hon. Gentleman's remarks, given that he has assisted us greatly in his constituency with enabling his constituents to claim. I take issue with his first point: my figures indicate that the number of people claiming pension credit in his constituency has increased by 25 per cent. over the number claiming the minimum income guarantee. Perhaps I could sit down with the hon. Gentleman outside the Chamber to try to work out how he has received that impression. I do not think that what he said is correct. He has a large rural constituency and that poses particular problems in ensuring that everybody gets their entitlements. However, he and others have helped us to increase the number of people claiming. For example, the Women's Royal Voluntary Service in Shetland contacted us about one lady. As a result of a home visit, she ended up with an extra £124 a week, in attendance allowance and pension credit. That has got to be worth the effort that he and our local staff are putting in.
Helen Jackson (Sheffield, Hillsborough) (Lab): Has my hon. Friend had time to look at the research produced by the Fawcett Society last week, which shows that one in four single women pensioners are still living in poverty? What steps will she take to use the pension credit system to address that problem? It stems partly from the broken working periods that make up most women's working lives, meaning that they enter the pensioner stage at a huge disadvantage to men.
Maria Eagle: I acknowledge that issue, but I can tell my hon. Friend that pension credit is a way of targeting money at those at the poorest end. Almost 60 per cent. of the extra £2 billion spend on pension credit each year goes to the poorest third of pensioners, most of whom are women. She should do what I am urging others to do: get pensioners to claim. I know that there are 4,310 households in her constituency now claiming pension credit, with an average weekly award of £37.68, which is well worth it for those individuals.
Mr. Paul Goodman (Wycombe) (Con): The Government want at least 3 million pensioner households to take up pension credit by 2006, but on the Government's figures, even if that target is reached, 1.4 million of the poorest pensioners will not be taking up the pension credit. Is it not therefore evident that the Government's obsession with means-testing will leave almost 1.5 million of our most vulnerable pensioners with nothing at all from the pension credit?
Maria Eagle: I do not accept that. The hon. Gentleman mistakes a target for a ceiling. We want everyone who is entitled to pension credit to take up their entitlement, and in constituencies where there is a proactive approach from local agencies in connection
with local services, we can make a big difference. There is no reason why that target should be the end of take-up, and we want everyone to take up their entitlement. However, the Conservative party's pension plans would pay three fifths of their proposed spend to the richest pensioners and only one fifth to the poorest. That is a typical Tory policy.9. Mr. Colin Challen (Morley and Rothwell) (Lab): What has been the take-up of pension credit in Morley and Rothwell. [153178]
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): As at 31 January, 3,609 pensioner households in Morley and Rothwell, comprising 4,343 individuals, were in receipt of pension credit. That is a 24 per cent. increase on take-up of the minimum income guarantee.
Mr. Challen : I am grateful to my hon. Friend for that answer, which shows that nearly 1,200 pensioner households are now receiving extra money from the Government and are therefore better off than they were four or five months ago. I should like to take the opportunity to thank the Pension Service and its staff in Leeds for helping me to run several pensioner advice sessions last year to try to help pensioners to claim their due. I am slightly concerned, however, that the level of award in my constituency is 14 per cent. lower than the national average. I do not believe, at first sight, that the demographic make-up of my constituency merits that lower award. Will my hon. Friend meet me to study an intensive analysis of why that is the case and to consider ways of improving take-up?
Maria Eagle: I congratulate my hon. Friend on his efforts to improve take-up in his constituency. He has not only helped the local Pension Service to hold surgeries, but been active in other ways to try to increase the level of take-up. My hon. Friend the Minister for Pensions would be more than happy to meet my hon. Friend the Member for Morley and Rothwell (Mr. Challen) to discuss the points that he has raised. However, the average award made to his constituents who were claiming the minimum income guarantee and are now claiming pension credit is £37.62 a week. Although that is slightly below the Great Britain average, that money will none the less be very welcome to those pensioners, and I am sure that they are very pleased to receive it.
10. Simon Hughes (Southwark, North and Bermondsey) (LD): What the take-up of pension credit in London has been since its introduction; and if he will make a statement. [153179]
The Minister for Pensions (Malcolm Wicks): I am pleased to report that as at 31 January, there were 239,000 pensioner households in London, comprising approximately 284,000 Londoners, receiving pension credit.
Simon Hughes: I am grateful to the Minister for that answer. I tie it in with an answer that he gave me in writing last week, which showed that about 220,000 people across Greater London are as yet not claiming
pension credit. Whatever our difference of view on the issue, will he accept that if so many people in need of that money are still not claiming it, one way of immediately giving them the necessary information would be to send out with their council tax bills—which they do not like—some information that might help them to pay those bills? That information could be sent to all the households in Greater London if the Minister's Department could get it organised in the next few weeks.
Malcolm Wicks: As I explained earlier in the Scottish context, it is sensible for us to have a planned and phased take-on. The hon. Gentleman and his colleagues would be the first to complain—they are often the first to complain anyway—if we had written to everyone so quickly that we could not answer the phones or deal with the resulting applications. We are doing this in the proper way, which makes sense for Londoners and others. Although there has already been great progress—involving more than 4,000 households in the hon. Gentleman's constituency, for example—we are continuing to write to Londoners, and we are determined to increase take-up through different methods, including home visits, which are proving very successful.
John Cryer (Hornchurch) (Lab): I accept what my hon. Friend says, but does he recognise that in some constituencies there are many pensioners who do not have a great deal of money coming in on a weekly or monthly basis, but who have savings that they have built up over the years? The savings threshold means that those people are excluded from the pension credit. Is there any possibility of raising that threshold, so that pensioners such as those who recently came to my advice surgery to tell me that they were not entitled to pension credit could be allowed into the system?
Malcolm Wicks: I am pleased to tell my hon. Friend that more than 2,000 people in his constituency are benefiting from pension credit so far. Under the old system of income support or the minimum income guarantee, any pound of extra savings from a work pension or money in the Post Office was knocked off pound for pound. One of the key factors about the pension credit is that, for the first time, we are rewarding those who have done the right thing, as it were, by saving.
Mr. Patrick McLoughlin (West Derbyshire) (Con): Has it worked?
Malcolm Wicks: Yes, it has worked. The savings credit is rewarding people, which is why we now have so many gainers from pension credit. There will always be a cut-off point, and there will always be some who apply and who are disappointed, but that is the logic of a scheme that seeks to target the poorest and most hard-pressed pensioners, including many of the very elderly and the roughly two thirds of recipients who are women and who are now gaining from pension credit.
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