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House of Commons

Tuesday 19 March 2002

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]


Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Consolidated Fund Act 2002

Office of Communications Act 2002


Mersey Tunnels Bill (By Order)

Order for Second Reading read.

To be read a Second time on Tuesday 26 March.

Oral Answers to Questions


The Secretary of State was asked—

Minimum Income Guarantee

1. Jim Sheridan (West Renfrewshire): How many pensioners in Scotland will benefit from the increases in the minimum income guarantee in April. [41515]

3. Rachel Squire (Dunfermline, West): How many pensioners in Scotland will benefit from the increases in the basic state pension in April. [41517]

The Minister of State, Scotland Office (Mr. George Foulkes): In Scotland, around 181,000 claimants will benefit from the increase in the minimum income guarantee in April and around 900,000 people will benefit from the increase in the basic state pension. Once again, a Labour Government are delivering for Scotland's pensioners.

Jim Sheridan: I thank my hon. Friend for that response. No doubt, he will be aware that many of my constituents receive the minimum income guarantee, which provides a crucial safety net, but what worries me—this is the substance of my question—is that many people may not be aware of it. The minimum income guarantee is no accident. It is a direct result of sound economic policy and the Government's social responsibility, and it is coupled with the national minimum wage and the principled politics of socialism.

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I came into politics to deliver those kinds of benefits to our people. However, I emphasise that there are a number of—

Mr. Speaker: Order. The hon. Gentleman is making a speech, but perhaps the Minister can answer from the information that he has already.

Mr. Foulkes: But it was a good speech, Mr. Speaker. As my hon. Friend knows, the minimum income guarantee will increase in line with earnings, and that is welcome for the poorest pensioners. We have also, thankfully, made it easier to claim the minimum income guarantee. The form has been reduced from 40 pages to 10, and we have introduced a new telephone claim service, all of which has made it easier for pensioners to claim the minimum income guarantee.

Rachel Squire: I certainly welcome what my hon. Friend the Minister has said, and so will 10,760 pensioners in Dunfermline and west Fife when they receive their increases. Does he agree that a sizeable group of pensioners, who have worked hard all their lives and put a little aside in savings or extra pension, still lose out, especially as their increases go to pay extra council tax, water charges or fuel bills? Will he join me in saying that we must all work together to ensure that the pension credit, when it is introduced next year, delivers to those pensioners and provides decency and dignity in their retirement?

Mr. Foulkes: My hon. Friend, like myself, represents a mining area and knows that many miners and widows on very small additional pensions are affected in the way that she describes. The pension credit will benefit about half the pensioner households in Scotland. Pensioner couples with incomes below £200 and single pensioners with incomes below £135 a week will benefit, and it will reward those with savings on low and modest incomes. We are the first Government ever to reward thrift in pensioners.

Mr. Peter Duncan (Galloway and Upper Nithsdale): Has the Minister found time in his busy diary to read the recent MORI survey that reported that only slightly more than one in four people in Scotland were content with the Government's attempt to tackle pensioner poverty? Bearing in mind his links with Age Concern Scotland, which co-sponsored that survey, what is he doing to make representations to the Department for Work and Pensions to ensure that future Government policy tallies with Age Concern Scotland's requests?

Mr. Foulkes: I also made time in my busy diary to vote against foxhunting last night, and the hon. Gentleman might have managed to do so, because, after all, he claims to be a Unionist. He is right to suggest that I used to work for Age Concern Scotland, and I know that pensioners in Scotland now feel better than they have ever done under any previous Government, which was shown very strongly when they voted in the last election to return a Labour Government with a majority almost as large as in 1997.

Mr. Archy Kirkwood (Roxburgh and Berwickshire): Will the Minister confirm that, on 21 January 2050,

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he will be 108 years old? Would he care to contemplate PricewaterhouseCoopers' recent estimate that, in that year, the basic state pension will be worth 6 per cent. of average earnings? Does he think that a weekly income of less than £30 a week at today's prices is an adequate foundation on which to build future retirement incomes?

Mr. Foulkes: The hon. Gentleman will know that, on 4 July this year, I will have been married for 33 years—he was there in a very particular role on that occasion. He will know that with the basic pension, minimum income guarantee, winter fuel allowance and a range of other measures, and with the way in which we are tackling the problem of private pensions, the Government are taking every possible action to ensure that pensioners, including members of the Government who might soon be pensioners, are well off in future. My right hon. Friend the Secretary of State for Work and Pensions has great concern about the implications for company pensions, about recent announcements, and especially FRS17, which I know will worry my hon. Friend. He has asked the Accounting Standards Board, which is independent of government, to consider these matters, which may be out of line with international accounting standards.

Mr. David Marshall (Glasgow, Shettleston): Does my hon. Friend agree that one of the best ways of increasing pensioners' income has been the introduction of the £200 winter fuel allowance? Will he take steps to ensure that any pensioner aged over 60 in Scotland who has not yet claimed this year's allowance will be advised that he or she must do so before the end of March? We must ensure that everyone in Scotland benefits from this generous allowance.

Mr. Foulkes: My hon. Friend is right. I ask everyone—colleagues, Opposition Members and the media—to publicise the fact that men who are over 60 and eligible for the allowance can still claim up to the end of this month—[Interruption.] No, I am not eligible, but almost.

Winter fuel payments are paid in addition to the cold weather payments. The Scottish National party wants weekly payments, which we already provide. Last year, 945,000 Scots received cold weather payments. In addition, they received £200 in winter fuel allowance, at a cost of £8 million. They would receive much less in an independent Scotland.

John Thurso (Caithness, Sutherland and Easter Ross): Would it surprise the Minister to know that at a recent gathering of pensioners in my constituency, 14 of the 22 present were not receiving their proper benefits or credits? Given that those numbers are probably replicated throughout Scotland, is it not time that the Chancellor of the Exchequer ditched his complicated credits and gave pensioners the decent pension that they deserve?

Mr. Foulkes: They are getting a decent pension and much more besides. I hope that the hon. Gentleman will take that on board and let his constituents know. Members have a responsibility to spread this information. They must ensure that it appears in their local newspapers and make it known in their surgeries. They must talk to Age

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Concern groups and pensioner groups. Labour Members are doing that and Opposition Members should do it as well.

Mr. James Wray (Glasgow, Baillieston): Does my hon. Friend agree that it is the Government's policy to eradicate poverty, especially pensioner poverty? I am concerned that the latest statistic shows that four of the 10 worst areas in the United Kingdom are in Glasgow. Could we make an extra effort through the UK Government and the Scottish Parliament to do something about the problem?

Mr. Foulkes: We are the first Government—the Scottish Executive support this—to commit ourselves to ending pensioner poverty and child poverty. It will take some time to achieve that after 18 years of Tory Government, but we are determined to do it.

Mrs. Jacqui Lait (Beckenham): I am sure that we will not forget, but in case we do, may I congratulate the hon. Gentleman and his wife on their wedding anniversary in July? Given the Government's ambition of increasing substantially the number of people who can to rely on private pensions, is the hon. Gentleman aware that the number of retired people on means-tested benefits will increase from 40 per cent. to nearly 60 per cent. next year? How does he plan to encourage people to save for their retirement when the Government take £5 billion a year from pension funds and will not reform annuities? Is not the pension system in a crisis of the Government's own making?

Mr. Foulkes: No. We keep being told about the £5 billion a year that is taken from pension funds and advance corporation tax. There were the exact equivalents in the reductions of ACT. We do not hear about that. The main problem with pension funds recently has been the fall in the stock market and FRS17, which I mentioned earlier. My right hon. Friend the Secretary of State for Work and Pensions has taken action on FRS17. He has also set up the Pickering review, which will report by June or July 2002. We are therefore taking swift and effective action. My right hon. Friend the Secretary of State had to sort out the mess of the mis-selling of private pensions created by the previous Government.

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