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Pensioners (Benefits)

7. Mr. Paul Burstow (Sutton and Cheam) (LD): What estimate he has made of the average proportion of pensioners who will be eligible for means-tested benefits between 2005 and 2050. [40163]

The Minister for Pensions Reform (Mr. Stephen Timms): Including housing benefit and council tax benefit, the proportion of UK pensioners entitled to means-tested benefits last year was around 50 per cent. The Pensions Commission has estimated that if basic state pension was uprated every year in line with prices and the pension credit guarantee level uprated in line with earnings, in 45 years' time, the proportion could be about three quarters.

Mr. Burstow: I am grateful for that answer. The Pensions Commission also said that a significant growth in means-testing of the sort about which the Minister just talked would undermine voluntary pension saving, especially among those who are most vulnerable to retiring with an inadequate pension arrangement. Given that fact and the fact that, as the Minister said, one in three pensioners will be on means-tested benefits of one sort or another by 2050, is it not time to change the policy, so that we can ensure that everyone has a decent pension but is not reliant on means-testing?

Mr. Timms: Those were precisely the issues that were addressed in the Pensions Commission report that was published on 30 November. We are actively looking at its recommendations. The hon. Gentleman is right to make his point, but the Pensions Commission expressed concern about the large and rather unpredictable expansion of means-testing, rather than the current level of means-testing, which his question addressed. We want a system in which people can be confident that the decisions that they make now about saving for the future will still seem like the right decisions when they draw an income in retirement. I think that everyone in the House wants that, and I look forward to the hon. Gentleman contributing to the consensus that we hope will be achieved on the White Paper that will be published in the spring.

Huw Irranca-Davies (Ogmore) (Lab): Does my hon. Friend recognise that the two greatest contributory factors to lifting pensioners in my constituency out of absolute poverty have been the pension credit and the winter fuel allowance? Will he thus ensure that in any reform of pensions for those poorest pensioners we do not—if this is not mixing metaphors when talking about pensioners—throw the baby out with the bathwater?

Mr. Timms: My hon. Friend is absolutely right. We have achieved the almost unprecedented situation in which pensioners are no more likely to be poor than anyone else in the population. That has hardly ever been the case in the past, and it is a particularly remarkable achievement after the long period of steady economic growth that we have enjoyed over the past eight years and in which earnings have risen so sharply. Pensioners, particularly less well-off ones, have shared in rising prosperity over the past few years. My hon. Friend is right: we have to make sure that we do not throw away the benefits of that improvement.
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Mr. Philip Dunne (Ludlow) (Con): Does not the Minister recognise that the level of savings in the population who have yet to become pensioners has halved under this Government as a direct result of the increase in means-testing? That complacency and the fact that the Government can accept a means-testing level of 40 per cent.—the proportion of pensioners receiving pension credit—is quite astonishing. Does not the Minister recognise that the Turner commission anticipates that the level will rise to 70 per cent. unless the pension credit system is changed?

Mr. Timms: The hon. Gentleman may be under a number of misapprehensions. I gave the current figure for the proportion of pensioners entitled to means-tested benefits in my earlier answer. The figure was about 40 per cent. in 1997, under the Government of whom the hon. Gentleman was a supporter. Because of pension credit we have been able to reduce pensioner poverty dramatically.

There is very little evidence that means-testing, under the previous Government or this Government, has reduced saving on the part of pensioners, but since 1997 there has been much greater confidence in the economy and in the future, which is largely what has led to the changes to which the hon. Gentleman refers. In 1992, when there was deep anxiety about the future of the economy, people saved more. Today they are more confident. [Interruption.] That is the reality. The greater prosperity and steady economic growth have been of immense benefit to everybody.

Pensioners (Benefits)

8. Mr. Gordon Prentice (Pendle) (Lab): What steps he is taking to ensure pensioners receive the benefits to which they are entitled. [40164]

The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): We undertake a wide range of activities to ensure that pensioners receive the benefits to which they are entitled. This is done through direct mailings, leaflets and mass communications, such as press and TV advertising, as well as local take-up activity. In addition, since December 2005 customers who contact the pension credit application line to make an application for pension credit have been able to claim housing benefit and council tax benefit during the same call.

Mr. Prentice: That is a magnificent catalogue of things that we are doing, but I remind hon. Members that in 2003 the Public Accounts Committee told us that there was £2 billion in unclaimed pensioner benefits. I wonder whether the Minister, having reeled off that long list of achievements, can tell us what the figure is today.

Mrs. McGuire: I will give my hon. Friend the specific figures in writing later. Since the Public Accounts Committee's report, we have gone to great lengths to ensure that pensioners receive their entitlement, which I hope that people throughout the House accept they deserve. That includes making arrangements for filling in application forms and for turning round applications quickly so that the 4,638 householders in my hon. Friend's constituency who receive pension credit get it timeously and efficiently. The average award in the
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constituency is £42.93. We are making great efforts, and I hark back to the answer given by my hon. Friend the Minister for Pensions Reform: what we have done in the last eight years has lifted millions of pensioners out of poverty.

Anne Milton (Guildford) (Con): Can the Minister tell me whether there has been any audit of the effectiveness of press and TV advertising? Does she have any idea of the cost?

Mrs. McGuire: The advertising is geared specifically to the target group. The pension credit take-up rate that we have achieved meets our targets and we are heading towards almost 3 million pensioners claiming pension credit. I ask the hon. Lady to accept that the difference between the present Government and the Government whom she supported is that we tell people to what they are entitled, whereas for 18 years the Conservative Government kept those things hidden.

Miss Anne Begg (Aberdeen, South) (Lab): The debate on this question and the previous one helps to explain why pensioners are often reluctant to apply for the benefits to which they are entitled: it is because the words "means-testing" have become dirty words. I and many other hon. Members know that means-testing is the very mechanism that has brought 1.9 million pensioners out of absolute poverty. As long as Opposition Members and the media decry means-testing and say that it is wrong rather than a good thing, it will be more difficult for pensioners to apply and feel that they are doing the right thing.

Mrs. McGuire: I thoroughly agree with my hon. Friend. Our aim in pensions and other benefits is to ensure that people know to what they are entitled. I, like many Labour Members, remember the days when people could not find out to what they were entitled from a social security system that was intended to disguise people's entitlement. The Conservatives made it very difficult for people to claim their entitlement. We have started to change that culture, and many pensioners in my hon. Friend's constituency and across the country now know that they can go in with dignity to the DWP—

Mr. Speaker: Order.

John Bercow (Buckingham) (Con): What is the increase in percentage terms in the take-up rate since the report of the Public Accounts Committee?

Mrs. McGuire: I will give the hon. Gentleman the details in writing after this Question Time.

Jim Sheridan (Paisley and Renfrewshire, North) (Lab): My hon. Friend will be aware that many pensioners throughout the country are extremely concerned about the forthcoming industrial action by the Public and Commercial Services union and the information issued by that trade union that the time taken to deal with people's applications for their entitlement could become even longer than they are experiencing now. Are pensioners' concerns misplaced?

Mrs. McGuire: On the particular matter of the PCS action, discussions are ongoing, so I think that it would be helpful to leave the matter there.
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