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Baroness Hollis of Heigham: My Lords, for a single pensioner.

Lord Higgins: Yes, my Lords, for a single pensioner. In order to avoid going through the appalling

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arithmetic, I have dealt throughout with the case of a single pensioner. The proceedings would be considerably delayed if one were to deal also with pensioner couples.

Lord McIntosh of Haringey: My Lords, as the noble Lord is making that point, is he aware of the provision in the Companion that the time for the Opposition Front Bench spokesmen and the Minister's reply to them is limited to 20 minutes?

Lord Higgins: Yes, my Lords; I believe that to be the case. No doubt the noble Lord is more familiar with these matters than I; he has been in the House a great deal longer. None the less, the fact that we have a long Statement needs to be taken into account. I am coming almost to my conclusion, but it would appear that the pensioner credit fades out at that level of income and that the amount of credit will be capped. However, we shall examine all the proposals most carefully.

The noble Lord who intervened and then walked out--perhaps he was distraught at my response--said recently in answer to a Question that the Government's intention was to halve pensioner poverty in 10 years. I have been worried by that undertaking--if that is the right expression, or words to that effect. The Government are committed to reducing pensioner poverty, which is common ground between us. I have had great trouble trying to ascertain which definition of "pensioner poverty" is to be used in deciding the extent to which the Government succeed in their objective. In a Question for Written Answer, the noble Baroness referred me to a recent publication by the Government which set out a whole series of definitions of "pensioner poverty". We must understand clearly the definition against which the Government propose to be judged.

4.11 p.m.

Earl Russell: My Lords, looking at the Chamber, I recall reading many years ago a novel by the late Maurice Edelman which described a visit by a foreigner to another place. The visitor commented on the extreme emptiness of the Benches and asked what was being discussed. He was told that the subject was pensions. His response was that he would have thought that the Chamber would be very full as pensions concerned so many people. No. That story comes to mind when one compares the populousness of the Chamber now with the position a few minutes ago when we were busy blowing bubbles in Greenwich.

I welcome the basic uprating. I also welcome, as crumbs from the rich man's table, the small improvements in disability benefits and benefits for carers. I seek clarification of the figures. One is told that there is to be £200 million more for carers. As always, I should like to know: more than what? Does the figure combine a real terms increase with an uprating, or is it all a real terms increase, and what is the base line?

Obviously, the pensioner package is the main point of comment. If the Government had done something like this a year ago they would have avoided a great

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deal of trouble, but there is force in the proverb that hope deferred maketh the heart sick. The price of settlement tends to increase over the passage of time, and it is possible that it may not create the degree of satisfaction now which it could perfectly reasonably have done a year ago. According to the Pre-Budget Report, the total for the pensioner package is £2.5 billion. I shall not make any comparison with our proposals which would have cost £3.5 billion--I am not here to say that mine is bigger than yours--but I am concerned about how well the money is targeted to particular needs.

Before I deal with that, I should like to raise one question which arises from paragraph 54 of the Statement. The Government claim to have spent £8.5 billion more on pensions since 1997. More than what? Is this figure all real terms, or does it include uprating increases? Above all, does it take account of the £3 billion undershoot in public spending in the first year of this Government which the Treasury, with consummate brilliance, wrote into the totals on which future uprating was based? Is it based on the figure as it was on the day John Major went off to watch cricket at the Oval, or is it an increase on the figure £3 billion lower after the first year's undershoot? The answer to that would be interesting.

I have always been concerned about the problem of take-up of the minimum income guarantee. The Minister may remember that yesterday at the time of the Treasury Statement I asked what was the budgeted expenditure for the cost of implementing the increase in the minimum income guarantee. The noble Lord, Lord McIntosh of Haringey, was unable to answer. I referred that matter to my honourable friends, and perhaps I may now tell the Minister the answer to that question. According to the report of the Government Actuary, which was published a few minutes ago, the cost is expected to be £600 million for 2001-02 and £750 million for £2002-03. It is not a very large part of a £2.5 billion package and suggests that some of my doubts about the take-up of the minimum income guarantee are shared on the government Benches.

I must declare an interest in the winter fuel payment as I am eligible for it. But, simply because I am eligible, I wonder whether it is as well targeted as it might be. It is a difficult question because, in the light of today's figures on the increase in winter deaths, the need for a fuel payment is clearly urgent. On the other hand, lack of food as well as lack of heat contributes to the risk of hypothermia. I wonder whether the case for concentrating the money on those in need may be more relevant here.

I understand why the noble Lord, Lord Higgins, has decided that he would take the money away from these things and put it into the basic pension. That was what the voters told us. On the other hand, I remember meat being given to the lions in Philadelphia Zoo. They did not like it and roared in protest. The keeper took away the meat and the lions roared twice as loud. I fear that in the months to come the noble Lord, Lord Higgins, may have cause to remember that story.

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Next year there is to be an increase of £3 in the basic state pension. Is that an increase in real terms, or does it include the ordinary uprating? If it is the latter, it is not very remarkable; if it is a real terms increase, it is wholly to be welcomed.

I shall not go through all the arguments about our age-related additions of which the Minister is perfectly well aware. However, apropos paragraph 25 of the Statement, if the Government are so condemnatory of age-related additions, why did they accept them in the income tax system but not for the basic pension? To ask the question that a pupil once asked me about a contradiction in my index: where are the Government right? I look forward to the answer of the noble Baroness.

I regard the pensioner tax credit with interest. We on these Benches believe that this is basically a new name for a taper. I recall a number of arguments with the Minister in the early years of this Parliament when the Government set their face firmly against taper increases. No doubt something has led the Government to change their mind. That is often welcome, but one should like to know what has persuaded them.

Paragraph 49 of the Statement refers to the adoption of the family credit system and fixing it for a longer time. I can understand both sides of the argument. It fits better here than with people in inflexible part-time employment, but there are problems with people whose benefit is fixed for any length of time. I hope that some attention has been paid to them.

The Minister's claim to set out to abolish child poverty is a little optimistic while the Government have not given up the idea of disentitling people to benefit. There is nothing on that subject in the Statement; nor is there anything about mending the holes in the safety net, the problems of verification, the tightening of the conditions of eligibility, housing benefit, or the links between poverty and transport and services. There are no doubts about the use of compulsion. I am afraid that there is a good deal of evidence--the Minister need not incriminate herself by answering this--of the shift of control of social security policy away from the Department of Social Security towards the Treasury. I deplore that, but I do not ask the Minister to say whether she agrees.

4.20 p.m.

Baroness Hollis of Heigham: My Lords, I am in some difficulty. I have one minute to answer all the questions from the two Front Benches, otherwise I shall be in flagrant breach of the rules. I shall write to noble Lords.

The noble Lord, Lord Higgins, asked why the TV licence and winter fuel payments were not rolled up in the basic state pension. A recent survey by Saga of 5,000 people showed that they preferred the Labour Party's approach by three to one. The noble Lord asked whether the winter fuel payments would be universal. Fifty per cent of those suffering from fuel

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poverty are pensioners. As a result, that contributes about 50,000 extra deaths from hypothermia. We are also seeking to tackle that.

The noble Lord, Lord Higgins, said that MIG would actually discriminate against savings. That is precisely why we are introducing the pensioner credit which builds in savings.

The noble Earl, Lord Russell, asked whether the £200 million for carers is new money. Yes, it is. He asked whether the £8.5 billion more on pensions was over and above RPI or included RPI. It is over and above RPI. I have made the 20 minutes.

4.21 p.m.

Baroness Castle of Blackburn: I, too, am concerned by what is happening to the uprating of the basic state pension, as, I am sure, are many in this House. Do we understand that the £5 addition last week is a one off--a great defect of the Conservative Party's pensions proposals--or does it reflect a permanent change in the principle underlying the operating of the basic state pension? Why is that £5 reduced to £3 in the second year? Above all, what is going to happen in the third and subsequent years? What is to be the principle underlying and governing the uprating of the basic state pension? Will the Minister tell us? If she cannot, why not?

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