HC Deb 29 November 1999 vol 340 cc12-4
6. Mr. Peter Viggers (Gosport)

What research his Department is currently evaluating into the advantages and disadvantages of means-testing benefits. [99066]

The Minister of State, Department of Social Security (Mr. Jeff Rooker)

The Department is not currently carrying out any research on the advantages or disadvantages of means-testing.

Mr. Viggers

The Government's pensions Green Paper, published a year ago, had as one its objectives the aim of giving greater rewards to those who have made provision for their own retirement. It acknowledged the resentment felt by those who, having saved for their retirement, are therefore disqualified from receiving benefits. Are not the Government, with their guaranteed minimum pension for the improvident, doing the opposite of the priority that they set out? Moreover, there has not been the promised review of capital disregards for those with modest savings. Have not the Government, once again, said one thing and done another?

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle)


Mr. Rooker

I understand the reasons behind the question but it is disgraceful, as my hon. Friend says, to describe as improvident people in receipt of the minimum income guarantee. Such people, because of the nature of their employment, may never have had the opportunity to contribute to an occupational works pension or superannuation scheme.

However, I take the point that the hon. Member for Gosport (Mr. Viggers) makes about capital limits, which have been fixed for many years. We are committed to reviewing those limits and we will do so, because we do not wish to send a signal that thrift does not pay: we must send a signal that it pays to save. The fact that capital limits were frozen year after year was a disgrace, but we shall correct that by reviewing them during this Parliament.

Mr. Peter L. Pike (Burnley)

I am sure that my hon. Friend recognises the complexity and duplication in having to produce information for many means-tested benefits. What progress are the Government making on one-stop benefits, which will help people and save cost?

Mr. Rooker

We are piloting the one-stop benefit around the country. Eight new pilots start today.

Mr. David Willetts (Havant)

Does the Minister recall the Chancellor's statement to the Labour conference before the election, in which he said: I want the next Labour government to achieve what in 50 years of the welfare state has never been achieved, the end of the means-test for our elderly people"? Does the Minister understand that if the basic state pension is increased in line with prices and the minimum income guarantee is increased in line with earnings, we will end up with more means testing, not less? Why will he not admit that that is the clear, deliberate, conscious policy of this Government and that it deters people from saving?

Mr. Rooker

I am not clear what solution the hon. Gentleman advances—he would probably argue that that is not his job. Too many pensioners are on the means test, and that has been the case for many, many years. Without the proposals in the Green Paper mentioned by the hon. Member for Gosport (Mr. Viggers), 3.5 million pensioners—one in three—would be on the means test in 2050. The proposals in the Green Paper on the stakeholder pension and on the second state pension will reduce that figure considerably. We do not intend to tip pensioners into the means test, as the Opposition allege.

Mr. Willetts

There is no point in talking about such long-distant visions if, year on year, the Government spread means testing. Does the Minister accept the calculation of the Institute for Fiscal Studies that people will need a fund of £130,000 to avoid being trapped on the Government's minimum income guarantee? If he does not, will he offer an alternative calculation? People planning for their retirement must know how much to save to keep themselves above the Government's means tests?

Mr. Rooker

Yes, indeed. The No. 1 priority of people should be to plan for their retirement throughout. They were never told that by the previous Government; they were left high and dry and too many have ended up on the means test. As we have made clear, there must be a policy for today's pensioners and for tomorrow's—but not the same policy. There are pensioners who have to be helped today, which is why the minimum income guarantee was introduced. As the hon. Gentleman well knows, helping those pensioners by an across-the-board increase would not put an extra penny in their pockets. We are determined to target resources on today's poorer pensioners while making adequate plans and preparations in law to ensure that tomorrow's pensioners retire on a decent income above the means test.

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