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I do not doubt that there are small steps in the right direction, but, for example, we are now in a culture in which, when one gets a motor insurance premium, one can shop around and "compare the meerkat", or whatever it is. There is less of a culture of doing that with annuities, and one proposal is that, however many months out from the date on which someone expects to draw an annuity, they ought to be given, in a digestible format, the information that they need to shop around. If they have access to the internet-I take the point made about internet access by the hon. Member for
Croydon, Central-or can go to a library, they will then have the five key pieces of information they need, and the process would be far easier than it is at present. That is an easy win for improving pensions, particularly for women, and something on which much more should be done.
My hon. Friend the Member for Ceredigion (Mark Williams) properly raised the issue of council tax benefit, as opposed to council tax rebate, and the Royal British Legion is rightly concerned about that. With the best will in the world, we can have the best take-up campaigns and can rename benefits as rebates, which would help, but ultimately a decent, secure, guaranteed pension must be the goal. I would be the first to accept that the level of pension that all of us would like to see cannot and never could be delivered overnight, but I believe that any political party must have a vision-a direction of travel. One of the problems in pensioner poverty is that we have seen flip-flops and switches in emphasis, so we need a clear goal and must make progress as rapidly is possible. That is why we think that the earnings link needs to be restored, not by the end of the next Parliament, as the Conservatives have said, or by 2012 but maybe 2015, as the Government have said, but immediately. Earnings or prices, whichever is higher, must be the way to go straight away, but that is a small first step on a long journey.
I will repeat the point I made to the hon. Member for Islington, North: at a time when we should be re-linking the pension to earnings, to have only part of the total basic pension price protected and to freeze SERPS, graduated pensions and the state second pension is an extraordinary thing to do when we all recognise-I speak at enough pension conferences to know-that every single problem in the pensions system would be made better by a decent state pension. Getting private pension incentives on top is easier with a decent state pension. Reducing reliance on non take-up and issues of means-testing is made better with a decent state pension. If we can do only one thing in the whole of pensions policy, it must be to have a decent state pension, which would make all the other problems much less severe.
Personal accounts pensions, or NEST pensions, ought to be a good way of tackling gaps in pension provision, but one of my worries about the future is that we will end up encouraging millions of people to take out relatively small pensions, much of which they will then find to have been means-tested away, and that might discredit private pension saving if we do not tackle means-testing and the adequacy of the basic state pension. I cannot do justice to the wide range of issues that my hon. Friend the Member for East Dunbartonshire and other Members have raised, but the basic state pension is a critical issue. Sorting out the basic state pension is first, second and third on the list of priorities, and it needs to be dealt with not in the distant future, but now.
Mr. Nigel Waterson (Eastbourne) (Con): As always, it is a great pleasure to follow the hon. Member for Northavon (Steve Webb). Indeed, it is becoming routine. I join him in congratulating the hon. Member for East Dunbartonshire (Jo Swinson) on securing this debate, which has been interesting if a bit breathless, given the number of issues that have been raised.
I was grateful for the hon. Lady's confirmation that her party has downgraded the citizen's pension, or universal pension, to an aspiration. It joins the list of other policies such as free tuition and free care which have also been downgraded recently. Those downgrades do not yet seem to have found their way into the Liberals' literature in my constituency, but I am sure that it is only a matter of time before they find their way into mine.
Pensioner poverty has been debated any number of times in recent years, sometimes in Opposition time as well. I believe that it is clear to all of us that the problem is getting worse: at least 2.5 million pensioners are officially living in poverty. On the basis of work in our own constituencies, as we have heard from several hon. Members, the problems faced by many of our older constituents are perfectly plain. I am a vice-president of my local Age Concern and see that very much at first hand.
We are asked to believe that the Government's slogan for the next election will be, "A future fair for all". What happened to the past 13 years? That was the future once, if I can misquote somebody. The fact is that all the statistics show that the problem is getting worse. The Government seem to be rightly focused on child poverty to the extent that they have introduced a Bill designed to abolish it, even though it is clear that they will fail to meet their 2020 target on child poverty. Why not a Bill on pensioner poverty? What is the distinction? Of course child poverty is important, but so is pensioner poverty.
The Government often say-I am sure that it is in the Minister's prepared speech-that pensioners are now less likely to fall into poverty than the rest of the population. Of course, that depends on how one looks at the statistics: including or not including housing costs makes a significant difference to the claim. We still face the grim truth that 2.5 million pensioners live in poverty, and 64 per cent. of pensioner households are dependent on state benefits for at least one half of their income.
One aspect among others that the hon. Member for Croydon, Central (Mr. Pelling) touched on was fuel poverty, which is particularly important at present because of the recent bad weather. The latest Government figures suggest that 3.5 million households are affected, but Energywatch says that actually 5.4 million households, or some 9 million people, live in fuel poverty. Sadly, Help the Aged has estimated that between 20,000 and 50,000 elderly people die each winter because of their freezing homes.
My party intends to continue the winter fuel allowance. We are committed to protecting that vital source of help for older people, but it is clear that this issue will not go away, whoever is in government. We intend to bring in energy efficiency improvements of £6,500 for every household and to require energy companies to provide information on energy bills that clearly shows the cheapest tariff available. We need complete transparency in the energy market if we are to give pensioners and others the opportunity to get the best possible deal to meet their energy requirements.
There has been quite a discussion about benefits and take-up. The hon. Member for Glasgow, East (John Mason) touched on this in his speech. We know that some £5.4 billion a year in benefits goes unclaimed by
pensioners-a huge amount which, according to the Institute for Fiscal Studies, could take at least 500,000 pensioners out of poverty at a stroke. The hon. Gentleman was right to touch on the problem of complexity in all of this.
On the earnings link, the hon. Member for Islington, North (Jeremy Corbyn) took us on an interesting trip down memory lane, but I am sure that he is as frustrated as he was when the Conservatives were in government that, after 13 years, this Government have done absolutely nothing to restore it. I can confirm that my party is committed to restoring the earnings link within the next Parliament, exactly mirroring the Government's current position, which I hope the Minister will confirm.
Jeremy Corbyn: I am always pleased to hear about sinners who repent. If the Conservatives plan to restore the link, over what time frame will they do it, and when do they think there will be similarity between the pension and average earnings?
I thought that the hon. Gentleman was uncharacteristically churlish about the role of private and occupational pensions in delivering a good standard of living for millions of our fellow citizens. Much of that is due to reforms and encouragement by successive Conservative Governments. It is a measure of this Government's failure on pensions and pensioner poverty that those pension arrangements have taken such a hit in the past 13 years. We know that the Government stripped more than £100 billion out of pension funds, and my party is committed to reversing the effects of that in time. It was important that the hon. Member for Northavon touched on the future development of personal accounts, or National Employment Savings Trust pensions-NEST, as we must get used to calling them. We also know, following the pre-Budget report, that the Government are already planning to strip out £2.4 billion from those pension savings through delays in implementation.
The default retirement age, which was touched on by several hon. Members, is important. There are already 1.4 million people working beyond normal retirement age, which shows that there is an appetite for doing so. My party supports scrapping the default retirement age in principle, but we are not oblivious to the practical difficulties that that presents-unlike, possibly, the Liberal Democrats. We will work closely with organisations such as the CBI to find solutions to the complications and problems.
The hon. Member for Ceredigion (Mark Williams) raised a concern of the Royal British Legion. Several hon. Members mentioned the complexity of the council tax benefit system and the resulting low take-up. We know that nearly one half of all pensioners are subject to means-tested benefits under this Government and that, of all the benefits, the one with the lowest take-up
by far is council tax benefit. Hence, my right hon. Friend the Member for Witney (Mr. Cameron), the Leader of the Opposition, gave his support to the campaign of the Royal British Legion, which was pleased that during the passage of the Welfare Reform Act 2007 there seemed to be a firm commitment that the Government would take action quickly. However, Ministers now seem to have retreated from that position. They gave undertakings and ensured that a particular amendment was withdrawn on the back of such assurances, but they are now talking about consulting local authorities and other key stakeholders.
We know that only 55 per cent. or so of all pensioners who qualify for the benefit actually get round to making a claim. According to polling carried out by ComRes, two thirds of people believe that the benefit is not claimed because people are ashamed to claim it. Conservatives are committed to working with local authorities to have a two-year freeze on council tax levels, and I am sure that that will be welcomed by many pensioners, but it seems to us-I believe that there is cross-party support for this-that the simple change of name from "benefit" to "rebate" would take away a great deal of the shame felt by pensioners who simply do not claim. An Ipsos MORI survey conducted on behalf of the Royal British Legion found that 56 per cent. of respondents believed that eligible veterans would be more likely to make a claim if it were for a rebate rather than a benefit.
May I take the opportunity provided so kindly by the hon. Lady to press the Minister to tell us exactly when that simple administrative change will happen. A simple change it may be, but it could put a great deal of extra money into the pockets of needy pensioners across our country who face poverty. I look forward to hearing what the Minister has to say.
The Minister for Pensions and the Ageing Society (Angela Eagle): First, we all need to congratulate the hon. Member for East Dunbartonshire (Jo Swinson) on securing the debate. It has been useful and touched, as many of these debates do, on a range of issues that have a bearing on pensioner well-being and poverty. Some are not directly my Department's area, but that is only right because older people do not live lives according to departmental boundaries. Social care, carers, access to occupational pension schemes, the implications of what happens in the financial markets, and how the financial services sector deals with insurance policies and annuities all have a bearing on the experience of those over retirement age trying to reconcile their savings with their expenses. If I did not realise before I got the job, I know now that, with pension policy, many echoes of the past arrive on the desk of the Pensions Minister. They were germinated and generated in the history books but arrive in the present and give a Minister conundrums, problems and difficulties.
My hon. Friend the Member for Islington, North (Jeremy Corbyn) was right to give a historical review of some of what has happened because the history of pension policy has an acute effect today. Those of us who wish to see a simplified system, and perhaps long for it because some parts are so complex, can think
about the history from which our pension policy descends. He was right to recall the contribution that my political heroine, Barbara Castle, made. He was also right to point out that the link between pensions and earnings was broken by the last Conservative Government, and the effect that that had on the overall value of the basic state pension. It is important to remember the history.
The hon. Member for Northavon (Steve Webb) also mentioned some of those issues, particularly women's exclusion from not only occupational pensions, often due to the structure and shape of the labour market, but the basic state pension. Other hon. Members, not least the doughty feminist the hon. Lady, mentioned in passing that there was a gender issue with pensions. I feel strongly about that as well, which is why I am proud that I will be the Minister when the April changes come into being. They will make a huge difference to women's access to the basic state pension in their own right. The reduction in the number of years of national insurance contributions required to qualify for a full basic state pension will reverse the historic exclusion of women from the basic state pension over time until the pension is almost completely equalised by 2020.
Mr. Pelling: The Minister makes a good point, but we should not forget those men who live longer and lack support because they are probably less adept at family and friend networking than females in society.
Angela Eagle: That is right; women tend to be able to deal with their social networks away from work more effectively, perhaps, than men, particularly older men. I have spent many good times in my job, which I am privileged to have, visiting older men's groups, as well as women's groups, where some of that social exclusion can be tackled. I know that such groups greatly add to the quality of men's lives.
There are 900,000 fewer pensioners living in poverty than there were when we came into Government. I am grateful to the hon. Member for Croydon, Central (Mr. Pelling) for having the generosity to point that out. Often these debates, rightly, focus on those areas in which we still need to make progress, but it is important that we also acknowledge the progress made by the policies that the Government have pursued since we came to power. That is not being complacent, but significant work by the Government has taken nearly a million pensioners out of poverty. In 1997, the poorest pensioners received income support and had to live on £69 a week. Ministers were not introducing extra support, such as pension credit, but were advising pensioners to knit hats and woolly jumpers to stay warm.
Pension credit makes a big difference to the lives of the 3.3 million people who receive it each week. There are some not claiming the pension credit that they are entitled to, which is why we are continuing our take-up campaigns. I invite all hon. Members who have participated in the debate to continue to do all that they can to assist us.
Off the top of my head, it is several billion, which is why we are spending time on take-up
campaigns, focusing particularly on those areas that we think have the lowest take-up. We have developed what is clumsily known as the automaticity pilot, which pilots data matching. That will enable us to pay pension credit, at least for a period, to people who are entitled to it and then invite them to claim once they have realised how effective it is for them.
Evidence shows that peer endorsement, in other words pensioners who have successfully claimed pension credit and endorsed it to their peers, is the most successful way of getting the pension credit claim rate up. We make 13,000 visits a week to the homes of vulnerable pensioners to assist them to claim. There is now a claim process whereby pension credit, housing benefit and council tax benefit can all be claimed with one phone call, which makes the process as simple as possible. We are pressing forward with those different methods of making benefits available and making the process of claiming easy and user-friendly for pensioners.
The hon. Member for Eastbourne (Mr. Waterson) asked about renaming the council tax benefit a rebate. We are anxious to get on with the process as quickly as we can, but I hope that he acknowledges that there are 380 local authorities administering council tax and housing benefit-perhaps we would all rather have seen it nationalised, rather than administered at the current level. Many local authorities have different IT systems; we have been in touch with IT suppliers to see if we can ease the shift from a council tax benefit to a rebate, and are in discussions with software and IT suppliers, as well as local authority administrators, on the practical issues raised by that shift. We remain committed to doing it as quickly as possible. I hope that that reassures him.
On fuel poverty, the hon. Lady commented, mainly I think, on the Scottish system. The English system is slightly different; if people own or rent their home, are 60 or over and claim pension credit, they can be eligible for up to £3,000 help with upgrading their heating, or £6,000 if they use heating oil. I advise her to take up the issue of irretrievable breakdown with the Scottish Executive and the authorities there, rather than bringing the issues here.
Mr. Nigel Evans (Ribble Valley) (Con): It is a pleasure to introduce this debate, Mr. Gale. I declare my interest as vice-chairman of the all-party group on beer, and as a member of the Campaign for Real Ale. I am delighted to see the Minister here, but a little surprised that the Government are not represented by the newly appointed pub supremo. It is an excellent idea to have a pub guru in the Government, although the decision was greeted with some interesting news articles. I am sure that the Minister will pass my message on to the pub supremo, and I am almost certain that he will lose no time in reading what I and other hon. Members have to say.
"Healey's appointment was met with the presentational gravitas it deserves by being unveiled in the form of a News of the World exclusive. His trip around Wentworth's pubs last week did little to dispel the scepticism of those who think the appointment of a pubs minister is a cynical attempt by the Government to win cheap publicity.
This opportunistic grab at positive media coverage has become a defining characteristic of this Government."
He then wrote that it was "a shame" that the pubs Minister was not given the job some time ago-and so say I, as does The Publican, whose headline, "Right idea, shame about the timing", says it all. Both magazines are no doubt essential reading for the right hon. Member for Wentworth (John Healey), and he will not be short of ideas for what to do.
"Many of the problems that pubs face are a direct result of the intrusive Government regulation and big increases in duties on drinks."
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