Pensions

Oral Answers to Questions — Social Services – in the House of Commons at 12:00 am on 8th March 1988.

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Photo of David Tredinnick David Tredinnick , Bosworth 12:00 am, 8th March 1988

To ask the Secretary of State for Social Services what assessment he has made of the feasibility and utility of comparing the value of basic state pensions between different European social security and national insurance systems; and if he will make a statement.

Photo of Mr John Moore Mr John Moore , Croydon Central

The best available comparative measure is the share of gross domestic product devoted to all programmes for elderly people. By that measure the United Kingdom's spending is the third highest in Europe. The United Kingdom basic pension cannot usefully be compared with pensions in other European Community countries, which have very different systems of support for elderly people.

Photo of David Tredinnick David Tredinnick , Bosworth

Is it not the case that the figures peddled by the Leader of the Opposition and his friends in Strasbourg are grossly misleading and bogus—[HON. MEMBERS: "Oh!"] Is it not the case that the pension figures are a cruel confidence trick?

Photo of Mr John Moore Mr John Moore , Croydon Central

My hon. Friend is right. The EC report on old-age pensions is worthless as a guide to pensioners' living standards in the United Kingdom because it does not take into account occupational pensions, except for those on twice average earnings. When such pensions are included, the United Kingdom is second in the Community with regard to the level of replacement of earnings by pension. Also, the report does not take into account other benefits to pensioners that alter the picture dramatically. When they are included in the total figure, the United Kingdom is third in the list.

Photo of Mr Bob Cryer Mr Bob Cryer , Bradford South

Is it not clear that, although the Government are boasting about their booming economy within the Common Market, when comparing basic state pensions one finds that nearly every other EC state pays better state pensions than the United Kingdom Government? Is it not the fact that the Government do not want such comparisons made because they expose the rotten deal that they give to state pensioners?

Photo of Mr John Moore Mr John Moore , Croydon Central

The hon. Gentleman is, not unusually, utterly wrong. Only three EC countries—the United Kingdom, Denmark and Ireland — pay flat-rate pensions. If one considers the other countries where earnings-related pensions are based on individuals' own average earnings, those pensions do not represent a national average. Therefore, it is clear that low earnings—I would have thought that the hon. Gentleman would have some interest in this matter—produce extremely low pensions.

Photo of Mr Roger King Mr Roger King , Birmingham, Northfield

Does my right hon. Friend agree that, when comparing state pensions we need to look at the other benefits that pensioners receive in the form of free tranport, housing benefit and so on? If one sought to compare the value of an Irish state pension with an English one it benefits an Irish man only if he buys his beer in this country.

Photo of Mr John Moore Mr John Moore , Croydon Central

My hon. Friend draws attention to the point that I sought to make that, when one takes the total percentage of GDP given by our country to help the elderly, we are third highest in the European league.