Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

Elderly Persons (Nottingham)

Part of the debate – in the House of Commons at 2:37 pm on 25th March 1988.

Alert me about debates like this

Photo of Mr Michael Portillo Mr Michael Portillo , Enfield, Southgate 2:37 pm, 25th March 1988

I think that I have explained that to the hon. Gentleman, because I said that what matters is what the pensioner ends up with. Under this Government the pensioner has ended up with a 3 per cent. increase over the years. The Government formed by the hon, Gentleman's party tried to sustain the link between the pension and earnings but could not quite do it because one year they had to change the method of calculation and some money got lost on the way through. Under that Government the income of pensioners improved hardly at all, despite valiant efforts to keep it up. I hope the hon. Gentleman will agree that what matters is the outcome. There is no point in enormous pension rises if there are also enormous rises in inflation. One may be able to keep pensions in line with inflation, but nothing can be done about savings that are losing their value behind the scenes. That is the point that we have addressed.

We have doubled the maximum amount of savings that a claimant may have while still qualifying for some benefit under income support as compared to supplementary benefit. We estimate that this change alone will mean that a further 10,000 pensioners will be able to qualify for income support. We are also told sometimes that although we have established this pensioner premium, it does not cover people who receive payments for a large number of additional requirements. That might be so in particular cases, but the effect should not be exaggerated. The receipt of these additional requirements under supplementary benefit is frequently overstated.

Three quarters of those eligible for pensioner premium under the new system received no more than one additional requirement under the old system, and only 5 per cent. received three or more. The majority of these additional requirements are more than covered by the pensioner premium. The reform will result in 61 per cent. of pensioners getting more or being unaffected by the changes. The remaining 39 per cent., who would otherwise have received less, will under the new system, receive transitional protection and about £200 million will be spent on maintaining that benefit income. That means that no one transferring from supplementary benefit to income support will lose as a result of the introduction of the new income support scheme.

The hon. Gentleman spoke about housing benefit. That is also being restructured in the same way to give the greatest help to people who are in the greatest need. About 620,000 pensioners on housing benefit will gain, and most pensioners remaining on the benefit will see a cash increase in April. The hon. Gentleman spoke about the capital rule and I know that he is interested in equity. It is difficult to justify to taxpayers on the 25 per cent. rate who are perhaps paying 9 per cent. in national insurance, and who may have no savings whatever in the bank, why they should pay taxes in order to provide benefit to people who have more than £6,000 in the bank. The hon. Gentleman needs to address that problem.

I recognise that there has been some uncertainty among claimants about the effects of the April changes. The campaign mounted by some people in the hon. Gentleman's party has not always been very accurate and must have added to the anxiety and the difficulties that people have in understanding the system. When all the reforms are taken together, nearly nine out of 10 people will be no worse off the day after the reforms than they were on the day before them, and many will be better off.