HC Deb 18 December 2000 vol 360 cc11-3
9. Mr. Simon Hughes (Southwark, North and Bermondsey)

How many more pensioners will be means-tested in the next financial year under measures announced in the pre-Budget statement. [141809]

The Secretary of State for Social Security (Mr. Alistair Darling)

We estimate that a further 500,000 pensioners will benefit from the significant increase in minimum income guarantee rates and capital limits from next year. The poorest pensioners will gain £12.45 a week as a result of the measures that we announced last November alone.

Mr. Hughes

If someone applies for asylum and does not succeed, the Government and others call him a bogus asylum seeker, but someone who applies for the minimum income guarantee and does not succeed—most applicants appear not to—is simply called someone who did not succeed. I hope that the Government will apply some consistency in their language.

I have a simple question. What increase in the basic pension would the Government have to make to ensure that the majority of applicants for the minimum income guarantee received it?

Mr. Darling

They would not get it. The hon. Gentleman is attempting to grapple with a problem. Many people have expressed an interest in the minimum income guarantee, but he and others have argued that people are reluctant to claim it because of the stigma that is attached to claiming. Those arguments do not stand up. We have identified the fact that people are unsuccessful either because they have too much money in the bank—we are getting rid of the capital limits to remove that artificial prohibition on receiving help—or because they have too much income, and we are dealing with that by raising the minimum income guarantee to £92 next year and up to £100 the year after that.

On the hon. Gentleman's specific question, when we increase the capital limits next year as a stepping stone to getting rid of them, nearly 500,000 people will gain as a result.

I remind the hon. Gentleman and other Liberal Democrats that their policy at the previous election was not based on a huge across-the-board pensions increase. They said: We will create an additional top-up pension for pensioners with incomes below the income support level. This will be indexed to earnings and tapered as outside income increases. In other words, they proposed the embryo of what we are enacting. As a result of what we have done, 2 million pensioners are £15 a week better off.

Mr. Bob Blizzard (Waveney)

It has been claimed that many elderly people are simply too proud to claim the minimum income guarantee. I have yet to find any such person in my constituency. I find that, when people know about the guarantee, they want to claim the money. Some people still do not know about it, so will my right hon. Friend think of ways in which we could further increase awareness? For example, we could use local media outlets, local campaigns and local officials who could visit sheltered accommodation and places where many elderly people live to promote awareness.

Some claims have not succeeded because of the savings limit, so will my right hon. Friend write directly to all the people who have been affected and advise them of the doubling of the limits and of their eventual disappearance and replacement with the pensioner credit?

Mr. Darling

We will get in touch with the people who have just missed out. It is important that they realise that they may be eligible for help after next April.

My hon. Friend makes an important point. It is not stigma or a reluctance to claim that is the problem. The problem is that artificially low limits have been imposed on the amount that pensioners can save. We want to make sure that those artificial limits are removed, which is why we are getting rid of the capital limits.

We also want to make sure that we can do far more than an across-the-board increase could ever do for the poorest pensioners, and that leads me on to another difference between us and the Conservatives. At present, if people do what successive Governments have told them to do and save for their retirement, they will lose out and be penalised. That is why the pension credit will ensure that, when people save for their retirement, they will receive a cash top-up to reward them for their thrift. That is a strategy to encourage more people to save for their retirement and will remove the problem that we inherited. In this, the fourth largest economy in the world, we were left by the Tories with 2 million pensioners who did not have enough to live on. That state of affairs has no place in a decent society.

Mr. Peter Viggers (Gosport)

Before the Government were elected, their spokesmen made moving speeches about abolishing means-testing for pensioners, but now that they are in office, 55 per cent. of all pensioners will be on means-tested benefits within three years. Has there been a change of policy or has something gone wrong?

Mr. Darling

More pensioners are getting more money under Labour. I hope the hon. Gentleman has got that. I hope that that situation continues because I would not want to leave pensioner poverty in the same state as the Conservative party left it. Pensioner poverty has no place in a decent society and we are going to make absolutely sure that it does not happen. There will be more pensioners with more money under Labour.