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“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 Government’s 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 week’s 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.”
It is good for Ministers to hear what ordinary pensioners who used to support the Labour party are saying.
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 Government’s 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 pensioners—the men and women who have given a lifetime of service to our country—is one of the most important responsibilities that we face in this House.
6.49 pm
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 post—my 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 poverty—reduce 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 second claim in the motion is that
“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 motion’s claim is therefore spurious.
The UK has the fifth highest median pensioner income in the EU—higher 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—
Andrew Selous: Will the Minister give way?
Mr. Plaskitt: No, I do not have time.
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 party’s old bangers; I suspect they got it ready to go a couple of times, took a look at it and thought, “Well, perhaps not—it doesn’t really look very roadworthy.” That is what we have found out today. Even with the hon. Member for Eastbourne (Mr. Waterson)—an advanced motorist—at the wheel, it could not be kept on the road. Bit by bit, it has fallen apart—
Mr. Patrick McLoughlin (West Derbyshire) (Con) rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the original words stand part of the Question:——
The House proceeded to a Division.
Mr. Deputy Speaker (Sir Alan Haselhurst): I ask the Serjeant at Arms to investigate the delay in the No Lobby.
The House having divided: Ayes 213, Noes 284.
AYES
Afriyie, Adam
Ainsworth, Mr. Peter
Amess, Mr. David
Ancram, rh Mr. Michael
Arbuthnot, rh Mr. James
Atkinson, Mr. Peter
Bacon, Mr. Richard
Baker, Norman
Baldry, Tony
Barker, Gregory
Baron, Mr. John
Barrett, John
Beith, rh Mr. Alan
Bellingham, Mr. Henry
Benyon, Mr. Richard
Bercow, John
Beresford, Sir Paul
Binley, Mr. Brian
Bone, Mr. Peter
Boswell, Mr. Tim
Brady, Mr. Graham
Brake, Tom
Brazier, Mr. Julian
Brokenshire, James
Brooke, Annette
Browne, Mr. Jeremy
Browning, Angela
Bruce, rh Malcolm
Burns, Mr. Simon
Burstow, Mr. Paul
Burt, Alistair
Butterfill, Sir John
Cable, Dr. Vincent
Campbell, rh Sir Menzies
Carmichael, Mr. Alistair
Carswell, Mr. Douglas
Cash, Mr. William
Clark, Greg
Clarke, rh Mr. Kenneth
Clegg, rh Mr. Nick
Clifton-Brown, Mr. Geoffrey
Conway, Derek
Cormack, Sir Patrick
Cox, Mr. Geoffrey
Crabb, Mr. Stephen
Davey, Mr. Edward
Davies, David T.C. (Monmouth)
Davies, Philip
Davis, rh David (Haltemprice and Howden)
Djanogly, Mr. Jonathan
Dorries, Mrs. Nadine
Duddridge, James
Duncan, Alan
Duncan Smith, rh Mr. Iain
Dunne, Mr. Philip
Ellwood, Mr. Tobias
Evennett, Mr. David
Fabricant, Michael
Fallon, Mr. Michael
Farron, Tim
Featherstone, Lynne
Field, Mr. Mark
Foster, Mr. Don
Francois, Mr. Mark
Fraser, Christopher
Gale, Mr. Roger
Garnier, Mr. Edward
Gauke, Mr. David
George, Andrew
Gibb, Mr. Nick
Gidley, Sandra
Gillan, Mrs. Cheryl
Goldsworthy, Julia
Goodwill, Mr. Robert
Gove, Michael
Gray, Mr. James
Green, Damian
Greening, Justine
Gummer, rh Mr. John
Hague, rh Mr. William
Hammond, Mr. Philip
Hammond, Stephen
Hands, Mr. Greg
Harper, Mr. Mark
Harris, Dr. Evan
Harvey, Nick
Hayes, Mr. John
Heald, Mr. Oliver
Heath, Mr. David
Heathcoat-Amory, rh Mr. David
Hemming, John
Hendry, Charles
Hollobone, Mr. Philip
Holloway, Mr. Adam
Holmes, Paul
Horam, Mr. John
Horwood, Martin
Hosie, Stewart
Howard, rh Mr. Michael
Howarth, David
Hughes, Simon
Huhne, Chris
Hunter, Mark
Hurd, Mr. Nick
Jackson, Mr. Stewart
Jenkin, Mr. Bernard
Jones, Mr. David
Kawczynski, Daniel
Key, Robert
Kirkbride, Miss Julie
Knight, rh Mr. Greg
Laing, Mrs. Eleanor
Lamb, Norman
Lancaster, Mr. Mark
Lansley, Mr. Andrew
Laws, Mr. David
Leigh, Mr. Edward
Letwin, rh Mr. Oliver
Lewis, Dr. Julian
Lidington, Mr. David
Lilley, rh Mr. Peter
Llwyd, Mr. Elfyn
Luff, Peter
Mackay, rh Mr. Andrew
Maclean, rh David
Main, Anne
Maples, Mr. John
Mates, rh Mr. Michael
Maude, rh Mr. Francis
May, rh Mrs. Theresa
McIntosh, Miss Anne
McLoughlin, rh Mr. Patrick
Mercer, Patrick
Miller, Mrs. Maria
Moore, Mr. Michael
Moss, Mr. Malcolm
Mulholland, Greg
Mundell, David
Murrison, Dr. Andrew
O'Brien, Mr. Stephen
Öpik, Lembit
Ottaway, Richard
Paterson, Mr. Owen
Penning, Mike
Penrose, John
Price, Adam
Prisk, Mr. Mark
Pritchard, Mark
Randall, Mr. John
Redwood, rh Mr. John
Reid, Mr. Alan
Rennie, Willie
Rifkind, rh Sir Malcolm
Robathan, Mr. Andrew
Robertson, Angus
Robertson, Hugh
Rogerson, Dan
Rosindell, Andrew
Ruffley, Mr. David
Russell, Bob
Sanders, Mr. Adrian
Scott, Mr. Lee
Selous, Andrew
Shapps, Grant
Simmonds, Mark
Simpson, Mr. Keith
Smith, Sir Robert
Soames, Mr. Nicholas
Spelman, Mrs. Caroline
Spicer, Sir Michael
Spink, Bob
Spring, Mr. Richard
Stanley, rh Sir John
Steen, Mr. Anthony
Stuart, Mr. Graham
Stunell, Andrew
Swayne, Mr. Desmond
Swinson, Jo
Swire, Mr. Hugo
Syms, Mr. Robert
Tapsell, Sir Peter
Taylor, Mr. Ian
Taylor, Matthew
Taylor, Dr. Richard
Teather, Sarah
Thurso, John
Timpson, Mr. Edward
Tredinnick, David
Turner, Mr. Andrew
Tyrie, Mr. Andrew
Vaizey, Mr. Edward
Vara, Mr. Shailesh
Viggers, Peter
Villiers, Mrs. Theresa
Walker, Mr. Charles
Wallace, Mr. Ben
Waterson, Mr. Nigel
Watkinson, Angela
Webb, Steve
Weir, Mr. Mike
Whittingdale, Mr. John
Wiggin, Bill
Williams, Hywel
Williams, Mark
Williams, Mr. Roger
Williams, Stephen
Willis, Mr. Phil
Willott, Jenny
Wishart, Pete
Wright, Jeremy
Yeo, Mr. Tim
Young, rh Sir George
Younger-Ross, Richard
Tellers for the Ayes:
Mr. Brooks Newmark and
Mr. Crispin Blunt
NOES
Ainger, Nick
Ainsworth, rh Mr. Bob
Allen, Mr. Graham
Anderson, Mr. David
Anderson, Janet
Armstrong, rh Hilary
Austin, Mr. Ian
Bailey, Mr. Adrian
Baird, Vera
Balls, rh Ed
Banks, Gordon
Barlow, Ms Celia
Battle, rh John
Beckett, rh Margaret
Begg, Miss Anne
Bell, Sir Stuart
Benn, rh Hilary
Benton, Mr. Joe
Berry, Roger
Betts, Mr. Clive
Blackman, Liz
Blackman-Woods, Dr. Roberta
Blears, rh Hazel
Blizzard, Mr. Bob
Blunkett, rh Mr. David
Borrow, Mr. David S.
Brennan, Kevin
Brown, Lyn
Brown, rh Mr. Nicholas
Brown, Mr. Russell
Browne, rh Des
Bryant, Chris
Buck, Ms Karen
Burden, Richard
Burgon, Colin
Burnham, rh Andy
Butler, Ms Dawn
Byers, rh Mr. Stephen
Byrne, Mr. Liam
Caborn, rh Mr. Richard
Cairns, David
Campbell, Mr. Ronnie
Cawsey, Mr. Ian
Challen, Colin
Chapman, Ben
Chaytor, Mr. David
Clapham, Mr. Michael
Clark, Ms Katy
Clark, Paul
Clarke, rh Mr. Charles
Clarke, rh Mr. Tom
Coaker, Mr. Vernon
Coffey, Ann
Cohen, Harry
Connarty, Michael
Cook, Frank
Cooper, Rosie
Cooper, rh Yvette
Corbyn, Jeremy
Cousins, Jim
Crausby, Mr. David
Cruddas, Jon
Cryer, Mrs. Ann
Cummings, John
Cunningham, Mr. Jim
Cunningham, Tony
David, Mr. Wayne
Davidson, Mr. Ian
Davies, Mr. Dai
Dean, Mrs. Janet
Denham, rh Mr. John
Devine, Mr. Jim
Dhanda, Mr. Parmjit
Dobson, rh Frank
Donohoe, Mr. Brian H.
Doran, Mr. Frank
Dowd, Jim
Drew, Mr. David
Eagle, Angela
Eagle, Maria
Efford, Clive
Ellman, Mrs. Louise
Ennis, Jeff
Farrelly, Paul
Field, rh Mr. Frank
Fisher, Mark
Fitzpatrick, Jim
Flello, Mr. Robert
Flint, rh Caroline
Follett, Barbara
Foster, Mr. Michael (Worcester)
Foster, Michael Jabez (Hastings and Rye)
Francis, Dr. Hywel
Gapes, Mike
Gardiner, Barry
George, rh Mr. Bruce
Gerrard, Mr. Neil
Gibson, Dr. Ian
Gilroy, Linda
Godsiff, Mr. Roger
Goggins, Paul
Goodman, Helen
Griffith, Nia
Griffiths, Nigel
Gwynne, Andrew
Hain, rh Mr. Peter
Hall, Mr. Mike
Hall, Patrick
Hamilton, Mr. David
Hamilton, Mr. Fabian
Hanson, rh Mr. David
Harman, rh Ms Harriet
Harris, Mr. Tom
Havard, Mr. Dai
Healey, John
Hendrick, Mr. Mark
Hepburn, Mr. Stephen
Heppell, Mr. John
Hesford, Stephen
Hewitt, rh Ms Patricia
Hill, rh Keith
Hillier, Meg
Hodge, rh Margaret
Hodgson, Mrs. Sharon
Hoon, rh Mr. Geoffrey
Hope, Phil
Howarth, rh Mr. George
Howells, Dr. Kim
Hoyle, Mr. Lindsay
Hughes, rh Beverley
Humble, Mrs. Joan
Iddon, Dr. Brian
Illsley, Mr. Eric
Ingram, rh Mr. Adam
Irranca-Davies, Huw
Jenkins, Mr. Brian
Johnson, rh Alan
Johnson, Ms Diana R.
Jones, Helen
Jones, Mr. Kevan
Jones, Lynne
Jones, Mr. Martyn
Jowell, rh Tessa
Joyce, Mr. Eric
Kaufman, rh Sir Gerald
Keeble, Ms Sally
Keeley, Barbara
Keen, Alan
Keen, Ann
Kelly, rh Ruth
Kemp, Mr. Fraser
Kennedy, rh Jane
Khan, Mr. Sadiq
Kidney, Mr. David
Kilfoyle, Mr. Peter
Knight, Jim
Kumar, Dr. Ashok
Ladyman, Dr. Stephen
Lammy, Mr. David
Lazarowicz, Mark
Lepper, David
Levitt, Tom
Lewis, Mr. Ivan
Linton, Martin
Lloyd, Tony
Love, Mr. Andrew
Lucas, Ian
Mackinlay, Andrew
Mactaggart, Fiona
Mahmood, Mr. Khalid
Malik, Mr. Shahid
Mann, John
Marris, Rob
Marsden, Mr. Gordon
Marshall-Andrews, Mr. Robert
Martlew, Mr. Eric
McAvoy, rh Mr. Thomas
McCafferty, Chris
McCarthy-Fry, Sarah
McDonagh, Siobhain
McDonnell, John
McFadden, Mr. Pat
McFall, rh John
McGovern, Mr. Jim
McIsaac, Shona
McKechin, Ann
McKenna, Rosemary
McNulty, rh Mr. Tony
Meacher, rh Mr. Michael
Merron, Gillian
Michael, rh Alun
Milburn, rh Mr. Alan
Mitchell, Mr. Austin
Moffatt, Laura
Mole, Chris
Moon, Mrs. Madeleine
Moran, Margaret
Morgan, Julie
Morley, rh Mr. Elliot
Mudie, Mr. George
Mullin, Mr. Chris
Murphy, Mr. Denis
Murphy, Mr. Jim
Murphy, rh Mr. Paul
Norris, Dan
O'Brien, Mr. Mike
Olner, Mr. Bill
Osborne, Sandra
Owen, Albert
Palmer, Dr. Nick
Plaskitt, Mr. James
Pope, Mr. Greg
Pound, Stephen
Prentice, Bridget
Primarolo, rh Dawn
Prosser, Gwyn
Purchase, Mr. Ken
Purnell, rh James
Raynsford, rh Mr. Nick
Reed, Mr. Andy
Reid, rh John
Riordan, Mrs. Linda
Robertson, John
Robinson, Mr. Geoffrey
Rooney, Mr. Terry
Roy, Mr. Frank
Ruane, Chris
Ruddock, Joan
Russell, Christine
Salter, Martin
Sarwar, Mr. Mohammad
Sharma, Mr. Virendra
Shaw, Jonathan
Sheerman, Mr. Barry
Sheridan, Jim
Simon, Mr. Siôn
Simpson, Alan
Singh, Mr. Marsha
Skinner, Mr. Dennis
Slaughter, Mr. Andy
Smith, rh Mr. Andrew
Smith, Ms Angela C. (Sheffield, Hillsborough)
Smith, Angela E. (Basildon)
Smith, Geraldine
Smith, rh Jacqui
Soulsby, Sir Peter
Southworth, Helen
Spellar, rh Mr. John
Starkey, Dr. Phyllis
Stewart, Ian
Stoate, Dr. Howard
Strang, rh Dr. Gavin
Straw, rh Mr. Jack
Stringer, Graham
Stuart, Ms Gisela
Tami, Mark
Taylor, Ms Dari
Taylor, David
Thornberry, Emily
Tipping, Paddy
Todd, Mr. Mark
Touhig, rh Mr. Don
Trickett, Jon
Truswell, Mr. Paul
Turner, Dr. Desmond
Turner, Mr. Neil
Twigg, Derek
Vaz, rh Keith
Walley, Joan
Waltho, Lynda
Watson, Mr. Tom
Watts, Mr. Dave
Whitehead, Dr. Alan
Wicks, Malcolm
Williams, rh Mr. Alan
Wills, Mr. Michael
Wilson, Phil
Winnick, Mr. David
Wood, Mike
Woolas, Mr. Phil
Wright, Mr. Anthony
Wright, David
Wright, Mr. Iain
Wyatt, Derek
Tellers for the Noes:
Alison Seabeck and
Steve McCabe
Question accordingly negatived.
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