| Age-Related Payments Bill
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Mr. Waterson: I am delighted to speak on the hon. Gentleman's amendment, and on mine. The Liberal Democrats are in their fiscal purity phase, but I doubt it will last. I would feel more genuinely chastised by the hon. Member for Northavon (Mr. Webb)—I suppose we should really call him a learned Member; after all, as far as I am aware, he is the only professor on the Committee—if I were not convinced that, in some part of the country, Liberal Democrat leaflets are circulating that promise to pay £100 to anyone over 15. Anyway, I shall not get too carried away by what he says. The hon. Gentleman answered his own query. We are talking about a fantasy land; we would not introduce such a measure if we were in Government because it is not the way to address the problem, just as is the case with capping. The problem was caused by the Government's ramping up council tax, particularly in areas of the country that they do not represent, and do not expect to represent. That is the real difficulty. Claire Ward (Watford) (Lab): Will the hon. Gentleman give way? Mr. Waterson: Let me finish my point first. Piled on top of that difficulty, of course, is the problem faced by those of us who have suffered under Liberal Democrat-controlled councils. The hon. Member for Northavon was good enough to try to help the Liberal Democrat campaign in my constituency, but I can tell him from my canvassing last night that it is not working. Column Number: 7 Claire Ward: If the hon. Gentleman is fundamentally against the Bill and the concept of giving money to pensioners over 70, why does he want to extend the principle and give money to persons over the age of 60? Mr. Waterson: I was coming to that. We are not opposed to giving some extra dosh to over-70s; why not do that? We just want to ensure that pensioners are not taken in by this largesse, and do not think that it is linked in any way to levels of council tax in their area. If the pensioners' parliament is anything to go by, we will not have to try very hard to ensure that. Ours is, of course, a probing amendment; if we were in Government, we would not approach the issue in this way. However, what I am trying to probe into—the issue was raised by many hon. Members on Second Reading—is why the Government have decided on 70, and not 65. What is the logic of paying the £100 only to those aged 70 and over? To row in behind the amendment, if not the rhetoric, of the hon. Member for Northavon, is there not some rigidity in the Bill on the matter of when people qualify that could be removed? I shall also have something to say about subsection (2) when we come to clause stand part. Why should over-65s be excluded, and why should a family in which someone, typically the husband, turns 70 during the year but then sadly passes away lose the £100? That seems to make no sense. It would be interesting, as an academic exercise—and that is certainly what it is from our point of view—to discover how much extra such changes would cost. Presumably, cost was the driver behind the decision to draw the line at 70, but we simply see no logic to that. Many pensioners over 65—indeed, over 60—suffer just as much because the council tax is high in their area as those over 70, and I fail to see why they should be excluded. However, that may be a point for stand part. I appreciate that the Bill was cobbled together in a great hurry when the Government realised, belatedly, that they needed a Bill to introduce the measure, and so I make no complaints about draftsmanship; that would be churlish, and the Minister knows from 22 sittings on the Pensions Bill that that is the one thing of which I could never be accused. There is no logic to the 70-year cut-off; or, if there is, I am sure that we will now hear what it is. Malcolm Wicks: There has been a little outbreak of election fever here. It is a little early in the morning for it, but I will leave the Opposition parties to their debates on that and will talk about the Bill. The Bill makes real the promise in the Budget to pay all eligible households in which there is someone aged 70 or over an extra £100. I emphasise that that will be delivered through the winter fuel payment process, which is a tried and tested method of delivery. It may not be without controversy, but issues relating to today's debate are very much about the winter fuel payment process, including the qualifying week. Evidence shows that this group of older people are likely to have been living on a fixed income for longer, as they are less likely to be economically active. Those in older households have, on average, lower incomes Column Number: 8 and are more likely to be living alone. Council tax takes up often a large portion of their income in comparison with younger elderly households. The £100 payment recognises that.Mr. Webb: There is a factual misconception here. The Minister will recall a written answer that he gave me, which expressed council tax net of any benefits as a percentage of income—the burden of council tax. I asked for the figures for the over-70s and for all pensioners. They were 3 per cent. in both cases; there was no difference. Malcolm Wicks: But the income figures are instructive. I do not need to lecture the hon. Member for Northavon on the fact that the older elderly tend to be poorer. I am not absolutely clear about the Liberal Democrat pensions policy at the moment, but for some time at least it has been to give rather more pension to the older elderly—that is an interesting argument, although we reject it as a mainstream pensions policy. I am therefore intrigued that the hon. Gentleman is presenting me with figures that undermine his own policy. Clause 1 sets out the eligibility criteria for the payment. Individuals must be aged 70 and ordinarily resident in Great Britain at a time no later than the end of the relevant week—20 to 26 September 2004. Opposition amendments Nos. 10 and 1 would extend entitlement to people aged under 70. Amendment No. 10 would extend the payment to all those who were born on or before 31 March 1935, which removes the requirement to reach the age of 70 before receiving the payment. Amendment No. 1 lowers the qualifying age for the payment from 70 to 60 years at an additional cost of around £330 million—an increase of almost 70 per cent. The hon. Member for Northavon has already gently chided the shadow Minister about whether that is just a pre-election gesture or a spending commitment. The sum of £330 million is significant, and it would be useful to know whether it is a new spending commitment. The people of Eastbourne look forward to the answer—I might add that that is somewhere we would all like to be today. We are targeting those pensioners who, because they are older and have long since stopped work, are likely to be on lower weekly fixed incomes. They are pensioners with little or no opportunity to increase their incomes. Only 4 per cent. of women and 11 per cent. of men in that age group are employed or self-employed. The average net weekly income for a couple over 70 is £309, compared with £361 for couples under 70—a difference of 14 per cent. Pensioners with private pensions receive, on average, less the older they are. Those under 70 receive an average of £104 a week; those over 70 receive an average of £83 a week. Mr. Webb: I know that the Minister is keen on intellectual coherence. When in another place his noble Friend, Baroness Hollis, responded to this argument about older and younger pensioners, she said that that was a misunderstanding and that the discrepancies among pensioners within one age group Column Number: 9 were much greater than the discrepancies between older and younger pensioners. Does the Minister agree with his noble Friend?
9.45 amMalcolm Wicks: I always agree with my noble Friend. This is an interesting debate in that on other occasions we have discussed the pros and cons of income-related measures such as pension credit. The truth is that universal provisions—we are introducing a universal provision for those of the relevant age group—have advantages and disadvantages. By definition, they are not sensitive to specific income details. Similarly, income-tested benefits have advantages and disadvantages. It is true that, as a generalisation, the older elderly tend to be poorer and more disadvantaged in all sorts of ways—they are more likely to live alone, for example—than the young 60-somethings, if I may describe them so. However, within any age band—for any age group, not just the elderly—there are many divergences. That is the truth. I do not know why the hon. Member for Northavon is smiling; that seems a self-evident truth, and it should help guide our social policy. We argue that by targeting the over-70s, we are concentrating extra help where it will do most good. I have given that explanation and tried to find the answer to the question put by the hon. Gentleman, which I think is £20 million. The Liberal Democrats are out-modesting, if that can be a phrase, the Tories' reckless spending commitment by proposing £20 million as opposed to £330 million. Given the intellectual coherence of my arguments, which I think have charmed Liberal Democrat Committee members at least, I hope that they will consider withdrawing the amendment. Mr. Webb: I smile because I am delighted that the Minister's responses will be in Hansard and quoted extensively in our forthcoming policy document, which will argue for higher state pensions for older pensioners. The Minister has given a cast-iron defence for that policy, and I am grateful to him for that. The amendments are about what a rational cut-off point would be. The Government are all over the place on that. They say that that 60 is the point for the pension credit; that 65 is the point for the savings credit; that 70 is the point for this age-related payment; that 75 is the point for the TV licence; and that 80 is the point for the enhanced winter fuel payment. The Govt do not have a clue; there is no coherence. That list is indicative of the fact that the Chancellor thinks up a wheeze, sticks it in the system, works out how much money he can spare and puts down an age cut-off on that basis. There is no rationale for why 70 should be significant or appropriate, or why we would make these payments at 70, but TV licence payments only at 75. There is no coherence at all, but perhaps that is in the nature of Government policy making. In the past, I have suggested that the Minister might, as he lies in bed at night, allow the following fact to gnaw away at him: he has admitted to me that the council tax burden, which is what we are talking about, Column Number: 10 is precisely the same on the over-70s as it is on all pensioners because of the operation of the rebate system. Why should we highlight only the over-70s when the council tax burden is identical for the under-70s? Again, presumably because the Treasury only had so much money, and that was where the cut-off came.As the Liberal Democrats are in an era of fiscal purity and corset-like financial discipline, I find spending even £20 million with gay abandon too much. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill.
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| ©Parliamentary copyright 2004 | Prepared 25 May 2004 |
