|Previous Section||Index||Home Page|
As a life long supporter of the Labour party I must say that I am perplexed that a Labour Government should penalise pensioners with a modest income. Revenue & Customs have been of little help in answering my questions...The Governments proposal to compensate those who have lost out is, to my mind, too late as it does not reflect a change in policy but is simply a political response to last weeks defeat at the polls. I wish you well in your legitimate attack on the Government and, like many other citizens, await the next General Election when we can vent our displeasure.
I raised with the previous Prime Minister the fact that some of my constituents, and others up and down the country, were paying one third or more of their entire income in council tax. Many pensioners across the country run down their savings every year in order to stay in the home they love and to pay their council tax, which invariably rises at a far higher rate than their pension. What have the Government done with the Lyons review on the future of council tax? Again, they have dithered and kicked it into the long grass. That simply will not do; our elderly constituents deserve better, as the hon. Member for Morecambe and Lunesdale rightly mentioned. That applies not least to English pensioners, who are suffering tax and council tax increases, while the Scots have their council tax frozen this year. What happened to fairness across the United Kingdom?
We have heard criticisms of a lack of Conservative policy, but my hon. Friends were elected to this House in 2005 on a manifesto commitment to halve the council tax of everyone over the age of 65, up to a maximum of £500 a year, for the life of this Parliament. That compares with the Governments lower, £200 for one year only, offer. We were also elected on a pledge to restore the earnings link, when the Labour party was telling the country that that could not be done. So we are not going to take any lectures tonight on Conservative party failings, not least because the Government have nicked at least eight Conservative policies. I know that Labour Members are keen to know what the Conservative policy will be in more areas, but as they have already stolen so many of our policies, we will keep a few in the locker until just before the general election, so that the Government do not take those as well.
The raid on private pensions has taken place, whereby £100 billion has been taken out, and the
savings ratio is only a third of what it was in the second quarter of 1997. In many societies, respect for the elderly is a given, but in our country the cult of youth often seems to dominate. Taking the right decisions now to look after current and future pensionersthe men and women who have given a lifetime of service to our countryis one of the most important responsibilities that we face in this House.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): We have had an interesting debate this afternoon with contributions from the hon. Member for Cardiff, Central (Jenny Willott)I welcome her to her new postmy right hon. Friend the Member for Manchester, Gorton (Sir Gerald Kaufman), my hon. Friend the Member for Morecambe and Lunesdale (Geraldine Smith) and from the hon. Members for Braintree (Mr. Newmark), for Weston-super-Mare (John Penrose), for Broxbourne (Mr. Walker), for Hemel Hempstead (Mike Penning) and for South-West Bedfordshire (Andrew Selous). The debate has been based on the Conservative motion and I shall conclude it by focusing on that, and as I do so, I shall respond to specific points made by hon. Members.
The motion begins with a comment about 2 million pensioners still living in poverty. As we have established this afternoon, we take no lessons on poverty from the Tory party. During the 1980s, pensioner poverty fell only when there was a recession. That was the Tory method of cutting pensioner povertyreduce median income, watch the wages of working-age people drop and unemployment rise and, hey presto, pensioner poverty falls. In fact, when this Government came to power in 1997, 3.2 million pensioners were in absolute poverty.
Unlike the Tories, we believe in giving the poorest in our society meaningful help, while keeping the economy strong. Because of the effective measures that we have taken and substantial extra investment, pensioner poverty has fallen while the economy has grown. And it has fallen not by a bit, but by more than 2 million in absolute terms. Support such as pension credit, winter fuel payments and help with council tax mean that today pensioner households are on average £29 a week better off than under the 1997 system and the poorest third are £40 a week better off. That means that today, pensioners are less likely to be in poverty than any group in society. That could never have been said under the previous Conservative Government.
the poorest pensioners are seeing their incomes decline in real terms.
That claim is simply wrong. The Conservatives source seems to be a misreading of a parliamentary answer given by my hon. and learned Friend the Minister for Pensions Reform in July 2007. The figures in the answer were in real terms and included the effect of inflation. To get the figure used in the motion, the Conservatives have double-counted for inflation. Perhaps that is because they used to run inflation at double the level that it is under this Government.
Opposition Members appear to find it difficult to get even a basic understanding of the figures. Such figures are only accurate as trends and the trend is very firmly
up for all groups of pensioners over the past decade. The trends show that the incomes of the poorest pensioner households have risen by around 30 per cent. since 1997. Average pensioner incomes have risen by 29 per cent. since 1997 in real terms, compared to earnings growth of 16 per cent.
The motion then makes a claim based on the EUROSTAT statistics about pensioners in Latvia, Cyprus and Spain, to which the hon. Member for South-West Bedfordshire returned in his speech. The hon. Member for Cardiff, Central also focused on them. The claim rests on a complete misreading of the data. The EUROSTAT survey measures the median income of each country and that of pensioners. The UK is relatively well-off so our poverty line is higher, and so our poorest pensioners are better off than the poorest pensioners in other countries. The motions claim is therefore spurious.
The UK has the fifth highest median pensioner income in the EUhigher than in France, Denmark and Sweden. So a poor pensioner in the UK has an income a 10th higher than that of a poor pensioner in Germany and a fifth higher than one in France. A poor pensioner in the UK has an income nearly twice that of a poor Spanish pensioner, three times that of a poor Latvian pensioner and more than 10 times that of a Cypriot pensioner. Furthermore, the EUROSTAT figures also ignore housing costs, personal pensions, and free health care
So if hon. Members want to use EUROSTAT, the most reliable data are those that show that a decade ago UK pensioners had a median income which was one seventh below that of the EU15. Today, it is nearly one 10th above that median. That is the reality of the situation.
The charge of rising costs adding further to poverty was stressed by the hon. Members for Braintree, for Weston-super-Mare and for Broxbourne. In the past 10 years, pensioner incomes have increased by more than inflation and by more than the average growth in earnings. That puts pensioners in a better position when dealing with the recent increases in the cost of living.
Where we can take action to help the poorest with the rising cost of living, we are. On fuel bills, we announced last week that we are taking serious steps to enable energy companies to ensure that the most vulnerable pensioners have cheaper bills. For this winter, we have offered the energy companies the facility to send a mailshot or voucher to any of our clients on pension credit. That is coupled with the increase in the winter fuel payment announced in the Budget and the commitment of the energy suppliers to provide an extra £225 million in support over the next three years. That will provide significant extra support to the most vulnerable, enabling them to pay their fuel bills.
Of course, pensioners are concerned about council tax increases. That is why council tax benefit take-up is important. We are encouraged by the fact that since we have increased activity on take-up it has started to rise,
going up by 2 per cent. in 2005-06. We need to go further and so we are introducing automaticity into the claiming of pensioner benefits. We estimate that that will lift 50,000 more pensioners out of poverty by 2010.
One of the most incredible aspects of the motion is what we have heard from the Conservatives about restoring the link between average earnings and the basic state pension. As my right hon. Friend the Member for Manchester, Gorton reminded us, the Tories broke that link and when they did so they said that it was the right thing to do. Clearly, they have no credibility whatsoever on the issue. We are committed to restoring that link, and of that there is no doubt, because we have enshrined it in law. Our aim is to re-link in 2012, subject to affordability and the fiscal position, so the latest that it could happen would be the end of the next Parliament. Restoring the link is part of a package of reforms. Unlike the Tories, we are not breaking the link or talking about restoring it for one Parliament only. We are making a commitment to do it for real and in a lasting and sustainable way. It will ensure that the poorest in our society benefit from significant increases in their income.
We then come to the claim about abandoning the target for pension credit take-up. That is old news, as we have established before. Last year, we had a stretching target to get 235,000 new claimants on to pension credit. All the indications are that we have exceeded that target, so for this year we have set an even more stretching target of 250,000. That shows our commitment to the poorest in society and to ensuring that we continue to make every effort to lift them out of poverty.
The motion moves on to make claims about the decline in private pension savings. That decline has been going on in the UK since the 1960s. In 1967, there were 8.1 million on such schemes. By the 1970s, there were 6 million, by the late 1980s there were 5.8 million and today there are 4.5 million. The reforms that we have introduced will ensure the best offer in the future for savings for pensioners.
The motion has been on the starting grid on a couple of occasions, only to be withdrawn for something else to be debated. The motion rather resembles one of the Tory partys old bangers; I suspect they got it ready to go a couple of times, took a look at it and thought, Well, perhaps notit doesnt really look very roadworthy. That is what we have found out today. Even with the hon. Member for Eastbourne (Mr. Waterson)an advanced motoristat the wheel, it could not be kept on the road. Bit by bit, it has fallen apart
|Next Section||Index||Home Page|