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“welcomes the policies of this Government to tackle pensioner poverty, which have lifted around two million pensioners out of absolute poverty and over one million out of relative poverty, and have led to spending of around £12 billion extra on pensioners compared with 1997; recognises that pension credit allows pensioners to live with dignity and rewards those who have saved for their own retirement; acknowledges the introduction of and increases to the winter fuel payment and further measures to ensure pensioners can keep warm; notes the provision of free off-peak bus travel granting freedom to pensioners and ensuring that they are not isolated in their own community; welcomes the long-term framework for pensions through the Pensions Act 2007, including relinking the basic state pension to average earnings and ensuring equality for women and carers with men by 2025; and further welcomes the private pension reforms in the Pensions Bill which will enable individuals to take personal responsibility for their own retirement.”
I waited in vain for the enunciation of the principles that we were going to hear—I expected something. Do
Conservative Members really expect us to believe that they have somehow changed—that they have been transformed from the hard-faced Thatcherites who removed the earnings link and slashed pensioners’ incomes into compassionate Conservatives? They delude themselves that their record of 18 years in government can so easily be consigned to the dustbin of history. Pensioners, above all, will remember. They lived through the Thatcher and Major periods, and they know that at the next election the choice will be clear—Conservative or Labour? The party that broke the link with earnings, or the party committed to restoring it? The party that consigned millions of pensioners to poverty, or the party that has lifted more than 2 million out of absolute poverty? The party that forced pensioners to live on £68 a week, or the party spending an extra £12 billion a year so that no pensioner need live on less than £124 per week?
Let me say to the hon. Member for Louth and Horncastle (Sir Peter Tapsell), who sought to remind us of history, that in the year 1988-89 cold weather payments from the Conservative Government amounted to the grand sum of £2,510, compared with the party that in 2008-09 will pay £2 billion in winter fuel payments. That is the sort of thing that pensioners remember.
Sir Peter Tapsell: The point that I was making was that a previous Labour Government abolished those payments altogether.
Mr. O'Brien: The point that I was making is that this Government are making payments of £2 billion to pensioners in winter fuel payments and the Government whom the hon. Gentleman supported were making payments of £2,500.
There is a choice: the party that left thousands of pensioners to freeze in their homes because they could not pay their fuel bills, then put VAT on fuel, and then tried to double it to 17.5 per cent., or the party that has provided winter fuel payments to keep pensioners warm by helping them to pay their bills, and that after 1997 cut VAT on fuel from 8 per cent. to 5 per cent. One can imagine what fuel bills would be like today with VAT at 17.5 per cent. if John Major had got his way.
Mr. Winnick: During the Tory years, were not the cold weather payments the only help with heating? Furthermore, it had to be freezing in a particular area for seven consecutive days—not five or six—and then there would be a single payment only to those on income support that amounted to about £6 or £7.
Mr. O'Brien: My hon. Friend is right, and pensioners remember that.
Let us not forget private pensions either, because they were mentioned—the thousands cruelly robbed of their pensions in the 1980s and early 1990s through the Maxwell scandal, pension mis-selling and employers’ pension holidays.
Mike Penning (Hemel Hempstead) (Con) rose—
Mr. O'Brien: Let me just make my point, and then I will happily give way.
We had to clean up the private pensions mess by creating the pensions regulator to oversee private pension schemes, by creating the Pension Protection Fund to insure them and by ensuring that the Pensions Commission was able to undertake the biggest reform of pensions in a century and set out the parameters of the reform. We have taken that process on in the 2007 Act and in the current Pensions Bill, with the aim of bringing 9 million more people into private occupational pension schemes. Not only that, but we ensured in December, through the financial assistance scheme, that people such as the constituents of the hon. Member for Hemel Hempstead (Mike Penning) began to get the sort of justified result they needed for their pension schemes following the problems that they had when some of those schemes went down.
Mike Penning: The Minister is quite right: I am going to raise the matter of the 700 constituents who had their pensions stolen from them, and the 140,000 pensioners throughout the country—that is the minimum number—who had their pensions stolen. They had to wait five years for the Government to come up with the compensation that they deserved, after the Government had been dragged through the courts, and in front of the ombudsman, and found guilty. What would the Minister say to those of my constituents who are still waiting for compensation today? Some of them will be taxed at a rate of 40 per cent., not the 20 per cent. rate at which they should have been taxed at the time.
Mr. O'Brien: As it happens, this morning I signed the order that will ensure that those payments are made. They should receive their payments very quickly. We took the order through the House recently so those payments should be made very shortly.
Mike Penning: That sounds like great news for my constituents and the other 140,000 who have been waiting for five years-plus for the compensation that they deserve. What about the taxation issue? Will they be taxed at 40 per cent. on the lump sum? Will those who would have been taxed at the 10p rate before the Government abolished it—the poorest of those pensioners—have to pay tax at the 20p rate now?
Mr. O'Brien: On the reasons why the situation arose, and why his constituents had some difficulties when their pension scheme went down, the hon. Gentleman should remember that the regime under which the difficulties arose was created by the previous Conservative Government. His party is not without fault in that matter, and my party did arrange to compensate his constituents. On taxation, the people involved will be taxed, but will be able to refer that tax back to the period during which they would have otherwise received their payments. They will have to make arrangements with the taxman about how those payments are reclaimed, and they will be able to do so at the end of the year. We have, as he knows, consulted various people affected, including some of his constituents, to see what the best arrangements would be to deal with the matter.
Mr. Newmark:
First, the Minister threw the name Maxwell at us as if that were going to be the thrust of his argument. Mr. Maxwell was a Labour Member
of Parliament. Secondly, this Government have robbed £5 billion a year—£50 billion to date—from pensioners. Thirdly, we have the highest fuel tax in the whole of Europe. That is all driven by this Government.
Mr. O'Brien: Let me remind the hon. Gentleman that when we came to office in 1997, the amount of money spent by the state on pensioners was £62 billion a year. It is now £90 billion a year. A certain degree of humility on the part of his party is needed on the matter.
Rob Marris: I have to correct, indirectly, the figures that my hon. and learned Friend has given. The increase is much more than that. The increase in NHS spending is £60 billion a year, and two thirds of NHS spending, quite understandably and properly, goes on pensioners. The increase in NHS spending for pensioners amounts to £60 per week, per pensioner—all of which was opposed by the Opposition.
Mr. O'Brien: My hon. Friend is right. I was trying to be conservative in my use of figures, but he corrects me, quite rightly, to say that the amount that we are spending is much higher.
The Conservatives scheduled the debate on 16 January, then cancelled it. They rescheduled it for 14 May, but cancelled again. From the cancellations, we concluded that today we would hear some announcement of a big policy on pensioner poverty that they had been developing. This was, after all, their big chance to launch a new initiative—perhaps something on pension credit or winter fuel payments, or a measure to deal with food prices—but all we have heard today is the same old things. They have flunked the test. They said that they were going to set out some principles, but we never heard any. They claimed that they had changed, that they were different and that they were going to look after pensioners—unlike during the 18 years of Conservative Government. Their thin disguise fools no one. All we have heard is the same old opportunist polemics and point scoring, the same fussy misuse of statistics and, most painful, the same old lack of substance. If anyone had any doubts, they now know that, on pensions, the Conservatives will not make a difference, because they have nothing new to say.
Mr. Waterson: Will the Minister give way?
Mr. O'Brien: I give way to the hon. Gentleman in the hope that we will hear something new.
Mr. Waterson: The Minister chastised us for postponing the debate. I remind him that the last time it was fixed, then pulled, it was because we thought a debate on Burma was more urgent. I think that that was the right decision.
What is significant is that the Conservative Opposition have called a debate on pensioner poverty and on the record of a Labour Government, who have failed so dismally. Does not that strike the Minister as a sign of the way in which politics has changed in recent years?
Mr. O'Brien: Let us look at the record of this Government. This is the Government who have sought to help the poorest pensioners by substantially increasing, especially through pension credit, the amount of money that goes to them. Half the £12 billion increase—
Sir Gerald Kaufman: Will my hon. and learned Friend give way?
Mr. O'Brien: How can I refuse?
Sir Gerald Kaufman: The hon. Member for Eastbourne (Mr. Waterson) has just boasted that this debate was called by the Conservatives because they care so much about pensioners, but 93 per cent. of Conservative MPs are absent from the Chamber.
Mr. O'Brien: When judging who cares about them, pensioners will be able to compare the levels of caring, in terms of expenditure on pensioners, shown by the Conservative Governments of the past with the levels shown by the present Government.
We have shown that we are taking constant action to help the poorest pensioners. Last week, for example, we announced measures to help the most vulnerable pensioners to reduce their fuel bills.
Pete Wishart: Will the Minister give way on that point?
Mr. O'Brien: If the hon. Gentleman will forgive me, I want to make progress.
We shall do that through data sharing with energy companies, so that the poorest pensioners can get more help with their fuel bills. Those measures come in addition to this year’s payment, alongside the winter fuel payment, of an extra £100 for pensioner households with someone over 80, bringing their payment up to £400, and an extra £50 for households with someone over 60, bringing their payment up to £250. The Government have also agreed with the energy companies that, in addition, the companies will increase their funding for social assistance by £225 million, thereby reducing the bills of many vulnerable pensioners.
The energy companies want to know where the poorest pensioners are, so that they can get them on the cheapest tariffs. We are prepared to share data with the energy companies through a trusted intermediary to enable the most vulnerable to have access to free home insulation, a beneficial fuel tariff, or even a cash rebate on their fuel bills. Allowing data sharing with energy companies is controversial, but as Age Concern, Help the Aged and others have said, the pressure of rising energy prices justifies that action.
In the Pensions Bill, which is now in the other place, we intend to take a power to tell the energy companies which of their customers is on pension credit. The Bill will not be passed until November, so in the meantime I have offered the energy companies the facility this winter to send a mailshot or voucher to those in receipt of pension credit. Whether it will go to people aged over 70 is still being discussed. It is now up to the energy companies to take that up as part of their £225 million contribution. At a time of rising fuel bills, we are providing practical help for pensioners.
Pete Wishart: Is not the Minister ashamed that, under a new Labour Government, 47 per cent. of single pensioners and 324,000 pensioner households in Scotland are in fuel poverty? Is it not odd—even perverse—that that is the case in oil-rich Scotland, a net exporter of energy?
Mr. O'Brien: The hon. Gentleman’s statistics are not accurate because they exclude, for example, council tax benefit and several other payments such as the winter fuel payment. His statistics, which I have seen cited elsewhere, are partial and inaccurate. Indeed, they suggest that those on low incomes are on much lower incomes than they are. Half of single pensioners have incomes of less than £7,600 after deducting tax, council tax and housing costs. The £6,000 figure excludes, for example, housing benefit and various earnings and investment income. The hon. Gentleman’s statistics are simply wrong.
Mr. David Heath (Somerton and Frome) (LD): I represent a rural area. It concerns me that many people who are in the most difficulty with their fuel bills cannot have gas and rely not on electricity but on fuel oil, the cost of which has gone up massively and will not be affected by the measures that the Government are introducing. They often live in old houses, which are the least amenable to sensible measures for reducing energy loss. Has the Minister any plans to help some of the least well off pensioners, who also live in the least helpful accommodation?
Mr. O'Brien: The supply of heating oil is a difficult issue. The Government still believe that open competition between the companies is the best way in which to try to keep prices down. The Office of Fair Trading monitors the market for the supply of heating oil to consumers. For many years, the Department for Business, Enterprise and Regulatory Reform has tried to promote connections to the gas network for deprived communities, thereby reducing their reliance on domestic heating oil. That Department’s design and demonstration unit has developed and tested a model for such connections where existing funding is available. Furthermore, the energy efficiency measures that are in place can help to reduce some fuel bills. Ofgem and Energywatch have organised a joint initiative, energy smart, which explores measures that can be taken to improve energy efficiency. I hope that those points help the hon. Gentleman, but I appreciate that there is a big problem.
Sir Robert Smith: Will the Minister give way?
Mr. O'Brien: If the hon. Gentleman will forgive me, I need to make progress. I have been generous in giving way.
I hoped that Conservative Members would welcome our initiative to get fuel companies to provide extra help to the most vulnerable pensioners. After all, last year, they called for more help with rising fuel bills. Indeed, the hon. Member for South-West Surrey (Mr. Hunt) said:
“we have no opposition to... data sharing when it happens... for a defined purpose”.—[ Official Report, 11 June 2007; Vol. 461, c. 600.]
Yet last week, the hon. Member for Rutland and Melton (Alan Duncan) attacked our proposals for data sharing as “alarming” and accused us of trying to “spy” on people. We get attacks both when we are not data sharing and when we are data sharing. They are simply opportunist attacks. There is no consistency, policy or substance in the Conservatives’ actions. They
do not have a strategy on pensioner policy, simply a way of opportunist point scoring. My old teacher used to say that empty vessels make the most noise. The Conservative vessel is certainly noisy, but it is empty of policy and has a captain who is always chasing the latest breeze.
Let me now deal with some of Conservative Members’ more detailed claims because I welcome every opportunity to set our record against theirs. They say that pensioners are poorer. I will take no lessons on poverty from the Tories. In 1997, hundreds of thousands scraped a living on £68 a week. I remember the then Health Minister, Edwina Currie, simply telling pensioners that they had to wear long johns and woolly night caps to keep warm.
Average pensioner incomes under Labour have risen by 29 per cent. in real terms since 1997, which, importantly, compares with an increase in average earnings of 16 per cent. Pensioners’ incomes have therefore risen above average earnings. Pensioner households are £1,500 better off this year than under the 1997 system. We have focused help on the poorest, so that the poorest third are £2,100 better off. That means that pensioners are today less likely to be poor than many other groups of the population. This is the first time that that has been the case. It is not that there are no poor pensioners—there are—but, because of pension credit, winter fuel payments, free bus travel and the other measures that we have introduced, pensioners are less likely to be in the lowest group.
Mr. Waterson: This is an important point and I glad that the Minister has raised it, because he raised it in questions on Monday. Until relatively recently—I am talking weeks or a couple of months—the mantra from Ministers was that pensioners were now no more likely to be in poverty than the rest of the population. There was a sudden shift in the rhetoric on Monday, when the Minister said—I understand that he has said it again today—that pensioners are now less likely to be in poverty than the rest of the population. Can he explain at what moment that change took place and what the basis for it is?
Mr. O'Brien: We have been looking into the statistics, and that is the current position. As we have put in place measures such as pension credit, the income of pensioners has risen, up to £124 in the case of a single pensioner. That is a significant help that other parts of the population cannot access. We heard some other strange uses of statistics from the hon. Gentleman. His view seemed to be that our pensioners were poorer than people in eastern Europe.
Mr. Waterson indicated dissent.
Mr. O'Brien: The hon. Gentleman should perhaps just remind me of the countries that came up.
Mr. Waterson: I appreciate that the Minister’s short-term memory may be failing, but I was quoting the EUROSTAT figures from the other day, which said that, among European Union countries, only pensioners in Latvia, Cyprus and Spain were more likely to fall into poverty than UK pensioners. I do not imagine that the Minister wants to contest that statistic.
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