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15 July 2009 : Column 376

Angela Eagle: I think there might be some sort of approach on which we can agree in terms of philosophical change in this regard. What I am trying to do instead of having this rather juvenile exchange- [ Interruption. ] Well, there is a lot of consensus in pensions policy. Conservative Front Benchers seem to think that "consensus" is a dirty word. That is interesting, and I will bear it mind when I hear them talk about it in future.

Dr. William McCrea (South Antrim) (DUP): Can the Minister assure the House that elderly people who are making a very valued contribution to care in their families will be rewarded instead of taken for granted?

Angela Eagle: A carers strategy is being developed. It is important that we begin to move further along the road of valuing and rewarding the work that millions of carers do, which keeps our society going but is often unrewarded. The changes that we are making to crediting into the basic state pension in 2010 are a reward for that, as are the changes announced in the Budget about crediting grandparenting. There is much more for us to do, but I am happy to agree with the sentiments that the hon. Gentleman expressed.

Mr. Graham Stuart rose-

Angela Eagle: I have given way to the hon. Gentleman, and I want to get on with my speech as this is a short debate.

I want to compare Labour's record with that of the Conservatives. The hon. Member for Eastbourne talked about pensioner poverty, but after 18 years of the previous Tory Government, pensioners in Norwich and elsewhere had got poorer. The poorest had to survive on a basic state pension of just £69 a week.

Kelvin Hopkins (Luton, North) (Lab): The major factor in that was the breaking of the link with earnings made almost as soon as Mrs. Thatcher came into power.

Angela Eagle: It was certainly one of the many factors.

Twelve years of a Labour Government committed to helping the poorest and most vulnerable has seen 900,000 older people lifted out of relative poverty, each one with enhanced life chances that should be celebrated rather than dismissed by the Conservatives. Thanks to increases in the basic pension and pension credit this year, no pensioner need live on less than £130 a week. Since 1997, this Government have spent about £100 billion more than if we had maintained the policies that we inherited from the Conservatives, and £13 billion of that extra spending is happening in this financial year, despite the economic challenges that we face. As a recent European Union report underlines, there has been a significant change in the income of the over-65s in the UK. In 1997, it was 15 per cent. below the EU average: that is the Conservative record. After 12 years of Labour government, it has risen to 9 per cent. above the average.

We continue our efforts to increase the take-up of pension credit, a benefit that did not even exist when the Conservative party was last in power. Since October 2008, it has been easier to claim, with claims for housing benefit and council tax benefit being made over the phone and pension credit being directly forwarded to
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the local authority without the need for a signed claim form. We continue to press ahead with targeted take-up campaigns, working with groups such as the Royal British Legion and the Market Traders Association to drive up pensioner claiming.

John Mason: On that point, does the Minister accept that although there may have been an improvement in the number of claims, there is still a bit of a gap?

Angela Eagle: Of course, and we continue to try to drive up the percentage of people claiming. In the Welfare Reform Bill, we are taking powers to share information, so that we can try to make claims more automatic, and we now have a partnership agreement with all 209 primary local authorities to share housing and council tax benefit claims as well as pension credit claims. I am optimistic that we can continue to make good progress, but I am not going to say that I am completely satisfied with take-up. We still have to do more, and we are.

Pension credit can open the door to many other benefits, such as housing and council tax benefits. Jointly, they can lead to an equivalent income of about £200 a week, which is why we recently wrote to 230,000 people about their council tax benefit to encourage them to take up the benefits to which they are entitled. We make 13,000 home visits every week to conduct benefit checks, and that work is ongoing week in, week out.

Mr. David Drew (Stroud) (Lab/Co-op): May I commend the village agent scheme set up by the Department for Work and Pensions, which is run in pilot in Gloucestershire? A group of people are employed to go into rural areas and follow up on benefit opportunities. That has made a dramatic difference to people who are never contacted in any other way. That is a real example of Labour working in rural areas.

Angela Eagle: I thank my hon. Friend for his observations. When we conduct take-up campaigns, we must understand how important peer endorsement is. One of the most effective ways of getting pensioners to claim their entitlements is to enable them to have contact with pensioners who have been through the process and can reassure them that it is not difficult and that a successful claim makes a real difference to their living standards.

Geraldine Smith: I do not know about Norwich, but I was recently talking to a pensioner in Morecambe who told me that he would be voting Labour because of the winter fuel allowance, the free TV licence, the free bus pass and pension credit. He did not trust the Conservative party, because he was old enough to remember the 1980s and the last Conservative Government.

Angela Eagle: My hon. Friend's experiences on the doorstep are similar to mine.

David Taylor: I was speaking to a pensioner in Norfolk just a few days ago who knew that the take-up rate for the winter fuel allowance is very high indeed. What she will not have known is that just 58 weeks ago today, my
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hon. Friend the Member for Walsall, North (Mr. Winnick) asked the hon. Member for Eastbourne (Mr. Waterson),

The hon. Gentleman said:

We are now 58 weeks on, and 42 weeks and one day from the likely date of the election. When will the Opposition be clear about whether they support the winter fuel allowance? An assertion that they have no plans to cut it is not equivalent to an endorsement that they are going to continue-

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I think I have had to say to the hon. Gentleman on more than one occasion that in his role as a member of the Chairmen's Panel, he would never allow that length of intervention.

Angela Eagle: My hon. Friend the Member for North-West Leicestershire (David Taylor) has drawn attention to a point at issue. The country has to judge the Opposition by their actions. If they are so concerned about pensioner poverty, why did they oppose the extra money allocated in the pre-Budget report to cold weather payments? Why did they vote against Budget measures to finance the increase in winter fuel payments, paid last year and due to be repeated this year?

Mr. Geoffrey Cox (Torridge and West Devon) (Con): I do not know whether the Minister has had a chance to read the report of the Select Committee, on which her party's representatives predominate. One of its criticisms of the winter fuel allowance is that it is extremely poorly targeted and goes to those who pay higher rates of tax. The Select Committee has made a recommendation that money could be saved by withdrawing the allowance from the rich. Does the Minister support such a policy?

Angela Eagle: The Government have no plans to do that, but I wonder whether the hon. and learned Gentleman's intervention gives a little glimpse into what the future might be were there to be such a tragic occurrence as a Conservative victory at the next election.

Mr. Winnick: Should not my hon. Friend congratulate the hon. and learned Member for Torridge and West Devon (Mr. Cox) on saying frankly what Opposition Front Benchers refuse to say? The Opposition would either abolish the winter fuel allowance, or, if they kept it, it would be means-tested. Let us tell the people, including pensioners throughout the country, what a Tory Government would mean.

Angela Eagle: I pay tribute to my hon. Friend's tenacity in attempting to get some sort of sense out of Opposition Front Benchers. My hon. Friend the Member for North-West Leicestershire quoted one of his attempts, which was rebuffed, to get the hon. Member for Eastbourne to come clean about his party's intentions last year.

Recently, the right hon. Member for Haltemprice and Howden (David Davis) referred to winter fuel payments as "a gimmick". The Tory think-tank Reform suggested scrapping the payments altogether, along with free TV licences. That attitude goes to the very top. In May, the
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right hon. Member for Witney (Mr. Cameron) refused to rule out scrapping winter fuel payments. As my hon. Friends have just pointed out, the hon. Member for Eastbourne has refused to commit the Conservative party to retaining them. I note that he is not leaping to the Dispatch Box to put us right about that.

Mr. Waterson: With respect, the Minister is struggling. Let me make it clear: we have no plans to scrap those payments, and it is dishonest to suggest otherwise.

Mr. Deputy Speaker: Order. I sense that the debate is deteriorating. Far too much extra chatter is going on. Eight Back-Bench Members wish to speak in the debate and we have not yet got through Front Benchers' speeches, so some people will be disappointed. I give notice now that the time limit will be reduced.

Angela Eagle: I have been generous in giving way. To get through the rest of my remarks, I will not be so generous. I merely observe that in May, when the right hon. Member for Witney was asked whether he would rule out abolishing the winter fuel payment, he refused to do so.

The Government have legislated for the most radical pension reforms since the basic state pension was introduced. Those changes will sharply narrow the gender gap in pensions, delivering fairer outcomes for women and carers. In 2010, more women will be able to claim a full basic state pension than ever before. The number of qualifying years will be reduced from 39 to 30, which means that around three quarters of women reaching state pension age in 2010 will be entitled to a full basic state pension in their own right, compared with around only 30 per cent. now.

Our reforms will enable more women to build up a state pension based on their own contributions. For the first time, paid and credited contributions for caring will be recognised equally for basic state pension and state second pension purposes. It is a great step forward that the invaluable caring work done by millions of women up and down the country is finally to be recognised, valued and rewarded in that historic reform.

The Pensions Act 2008 also introduced a vital measure to allow eligible people, mainly women and carers again, to buy an additional six years of voluntary national insurance contributions. We estimate that as many as 500,000 women will benefit from that change alone.

The Opposition have claimed that we have not been clear about the restoration of the link with earnings, but that change is already enshrined in law. We have been clear that we will restore the link between state pensions and earnings in 2012 or by the end of the next Parliament at the latest. From 2012, radical changes to private pension saving will start to come into effect. Those changes will be the most significant changes to pension provision since the state pension was introduced 100 years ago. We will see between 6 million and 9 million workers either newly saving or saving more in workplace pension schemes. That will be supported by the introduction of the personal accounts scheme, which will fill the gap in the pensions market for workers on moderate or low incomes. Annual pension contributions are estimated to grow to around £10 billion a year by 2015 as a result of those changes. Around £6 billion of that is estimated to
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be new saving. That represents significant steps toward tackling under-saving for later life, as well as a boost to the industry.

Through the Budget this year, we introduced two important changes for pensioners with savings. From November, the capital disregard for pension credit will be increased from £6,000 to £10,000. That will benefit 500,000 people, with an average weekly gain of £4, and it means that 88 per cent. of pension credit recipients will be unaffected by having benefit deducted because of their savings. From October, we will increase the amount that the over-50s can save in an individual savings account to £10,200. Those measures, when taken with the planned changes to personal allowances announced in the Budget last year, will mean that around 600,000 more pensioners will pay no tax at all. Overall, that means that 60 per cent. of pensioners will pay no tax.

Maintaining confidence in pensions is undermined by scaremongering about the state of the industry. Unlike in previous downturns, this Government have put in place arrangements to ensure that people are not left without a pension, even when their employer goes bust. This Government set up the Pension Protection Fund to ensure a strong and clear protection regime for people whose pension scheme fails. The Pension Protection Fund provides a safety net for 12 million members of defined-benefit schemes. It has £3 billion in assets and is currently paying out around £4.2 million a month in compensation to those whose employers have ceased to trade. Given those numbers, there is no question but that the Pension Protection Fund is sustainable and that people can have confidence that pensions savings can be maintained.

After inheriting a situation in 1997 where pensioner poverty had been growing, this party has made genuine progress in helping the most vulnerable. For the first time in history, we in Britain have broken the link between age and poverty. Thanks to the policies of this Government, people are now no more likely to be poor because they are old. That is an achievement of which we on the Government Benches are rightly proud. We have also laid strong and lasting foundations for the future. We are not only taking action to deliver real help now to Britain's pensioners, but planning for generations to come. Our pension reforms mean that generations will benefit from a fairer and more generous state pension and that millions more will be saving in workplace pensions. Being old need no longer mean being poor, thanks to the action that we are already taking.

That is the agenda of a Government who are on the side of the people, not markets-a Government of action who will not sit idly by and do nothing. We have published our strategy to build a society for all ages, and we will take action to bring forward the review of the default retirement age. Yesterday, we published a Green Paper looking at the care and support system, which encompasses many of the important issues that have struck such a chord outside this House, such as personalisation and the national carers system. I commend the Prime Minister's amendment to the House.

Several hon. Members rose -

Mr. Deputy Speaker: Order. Before I call the hon. Member for Leeds, North-West (Greg Mulholland), let me say that I rather hope that his speech is no longer
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than that of his Front-Bench colleague earlier, on which basis the time limit on Back-Bench speeches had better be reduced to 10 minutes.

5.19 pm

Greg Mulholland (Leeds, North-West) (LD): Thank you, Mr. Deputy Speaker. I have to say that I have no idea how long my colleague's speech was.

Mr. Deputy Speaker: It was 20 minutes, if that is helpful.

Greg Mulholland: I shall endeavour not to speak for longer than that, Mr. Deputy Speaker.

I think that we can all agree that the Government are extremely good at warm words. The Prime Minister stated in his foreword to yesterday's Green Paper on social care:

But how many older people in this country would recognise the reality of their lives over the past twelve and a half years in those words? Only last year, we had another consultation paper from the Government: "The case for change: why England needs a new care and support system". Its opening paragraph stated:

Yet here we are, a year on, talking about the start of a consultation process.

The sad reality for pensioners in Britain in the 21st century is that 2.5 million of them live in poverty. That is about one in five of the pensioners in this country. No Government-especially a Labour Government-should be anything other than deeply ashamed about that. The Commission for Social Care Inspection has estimated that older people are forced to spend £6 billion a year of their own money-often through selling their homes or raiding inheritance funds-in order to pay for their care in retirement. More than 2 million pensioners do not claim money from the benefits and credits system even though they qualify for it. So, whatever the Minister says, I am afraid that the system is not working to address the problem of pensioner poverty.

Mr. Graham Stuart: The hon. Gentleman is making powerful points about the position of the many pensioners who live in poverty in Britain today. Is he aware that the Institute for Fiscal Studies predicted-in 2007, before the current downturn-that there would be no change in the proportion of pensioners living in poverty in the next 10 years? I believe that the figure was one in five.

Greg Mulholland: I thank the hon. Gentleman for that interesting figure. The reality is that the number of pensioners living in poverty in this country was increasing even before we got into the recession, so as the recession bites, there is real concern about what will happen to the most vulnerable people in our society.

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