Minimum Income Guarantee

Oral Answers to Questions — Social Security – in the House of Commons at 12:00 am on 5 March 2001.

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Photo of Dr Alan Williams Dr Alan Williams Labour, Carmarthen East and Dinefwr 12:00, 5 March 2001

What his most recent estimate is of the number of pensioners in receipt of the minimum income guarantee and the number of eligible pensioners who have not applied. [150487]

Photo of Alistair Darling Alistair Darling Secretary of State for Social Security

Nearly 2 million pensioners currently benefit from the minimum income guarantee. I am sure that my hon. Friend appreciates that it is difficult to be sure of exactly how many people might be eligible for it or of how many never apply.

Photo of Dr Alan Williams Dr Alan Williams Labour, Carmarthen East and Dinefwr

In view of the massive increase in the minimum income guarantee in April, from £78 to £92 a week for single people, and from £121 to £140 a week for couples, will there be an advertising campaign, similar to last year's Thora Hird campaign, to try to ensure that those who are eligible but do not apply are told of their rights and receive that superlative increase?

Photo of Alistair Darling Alistair Darling Secretary of State for Social Security

Yes. As my hon. Friend knows, we have been advertising the minimum income guarantee over the past few months, and the campaign will continue. Indeed, we are about to write to pensioners who, until now, have been excluded by the low level of the capital rules. They are being increased to £12,000; that means that more pensioners will be eligible for the minimum income guarantee.

When the capital rules disappear from the social security system for the first time in 2003, many more pensioners will benefit from the minimum income guarantee as part of the pension credit. As my right hon. Friend the Minister of State told the House a few moments ago, that will result in 5.5 million pensioners benefiting from a significant step forward in tackling pensioner poverty as well as ensuring that the millions of pensioners who have been thrifty and saved all their lives are rewarded, not punished, for their efforts.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

It is surprising that the Secretary of State does not know the number of pensioners who could benefit from the minimum income guarantee. It is a big flaw in the Government's strategy for tackling pensioner poverty if he cannot tell hon. Members the number of people who are eligible and the number who receive that minimum income.

On the broader question, does not the Secretary of State agree that the majority of pensioners want a guarantee not of a minimum income, but of a decent pension? In the light of what he has told the House, does he have faith that the social security system will provide that? Should not the Government re-examine their support for the state pension system?

Photo of Alistair Darling Alistair Darling Secretary of State for Social Security

Let me deal with the hon. Gentleman's two points. First, as he should know, estimates of the number of people who might be eligible for the minimum income guarantee vary widely. The state does not hold information on everybody's bank accounts or on people who do not choose to contact it; that has always been the case.

On pensioner support, I am grateful to the hon. Gentleman for allowing me to remind the House and him that, in April, pensions will increase by £5 a week for a single person and £8 a week for a couple; the following year, they will increase by a further £3 a week for a single person and £4.80 for a couple—the Conservative party could never do that because it would not have the requisite money. On top of that, we are increasing help for the poorest pensioners. In this day and age, it is scandalous that so many pensioners live in poverty; that is why we are increasing the minimum income guarantee to £92 a week in April. From 2003, it will increase to £100 a week.

When it comes to the bit, British pensioners will know which party in government can do the right thing: eradicate pensioner poverty and help all pensioners, including thrifty pensioners through the pension credit, and which party in government would have the money to make that decision in the first place. The Tories most certainly would not.

Photo of Edward O'Hara Edward O'Hara Labour, Knowsley South

While encouraging the Government to do all they can to increase the state retirement pension, may I also thank the Secretary of State for what he has done for the poorest pensioners in my constituency? About 14 per cent. of those who benefit from the minimum income guarantee are in the north-west, and they are most heavily concentrated in Merseyside constituencies such as mine. My right hon. Friend has targeted the poorest pensioners in my constituency, who are the most significant group, and the new thresholds will target the next most significant group of pensioners. Will he assure the House that he will continue to target the pensioners whom I represent?

Photo of Alistair Darling Alistair Darling Secretary of State for Social Security

My hon. Friend is right. Unfortunately, far too many pensioners—particularly in parts of the country where wages were historically low, or where there were long periods of high unemployment—were being expected to live on nothing but the basic state pension. That was not enough. The Government's first priority on being elected was to begin to tackle pensioner poverty. That is why we introduced the minimum income guarantee, which was opposed by the Conservatives. It is interesting that their proposals are designed to benefit the top 10 per cent. of the pensioner population and not the others.

On top of introducing the minimum income guarantee, the second stage of our policy is to help the millions of pensioners—some of whom live in my hon. Friend's constituency—who are by no means well off but who have saved a little money, only to find that the social security system that we inherited penalises them for what they have done. The pension credit, on top of the minimum income guarantee, will mean not only that we help millions of pensioners out of poverty, but that we help the hard-working men and women of this country who have scrimped and saved throughout their lives. They will now receive extra help that was never there in the past.

Photo of Jacqui Lait Jacqui Lait Conservative, Beckenham

Following the end of the £15 million take-up campaign, will the Secretary of State confirm that only about 100,000 people have benefited from the minimum income guarantee? Although we are pleased that those people have some extra money, will he tell us what he plans to do to contact the 400,000 missing people whom Ministers said were legally entitled to an increased minimum income guarantee?

Photo of Alistair Darling Alistair Darling Secretary of State for Social Security

The hon. Lady should not be so patronising towards people who have applied for and obtained money under the minimum income guarantee. The average amount that they receive is about £20 a week, which makes a big difference to pensioners who qualify. Let me repeat—as the hon. Lady is evidently hard of understanding, if not hard of hearing—the point that I have made on many occasions. The reason many people do not qualify at the moment is that, under the present system that we inherited, the capital rules hit anybody who saves a modest amount of money. [Interruption.] We want to ensure, through the minimum income guarantee, that from 2003 no pensioner will have to live on less than £100 a week. [Interruption.]

Photo of Michael Martin Michael Martin Speaker of the House of Commons

Order. The hon. Lady has asked a question; she should listen to the answer.

Photo of Alistair Darling Alistair Darling Secretary of State for Social Security

The Conservative party is having some difficulty in coping with a Government who have a consistent pension policy that lasts more than nine months, and has not had to be torn up because it is discovered to be all wrong. Our policy is delivering more money to millions of pensioners, as well as overhauling the pension system to ensure that, for the first time ever, we not only eradicate pensioner poverty but help millions of pensioners who have put a little money by and who should be rewarded for their thrift, not punished for it as they were under the Conservatives.