Means testing

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 Anne McIntosh Anne McIntosh Conservative, Vale of York 12:00, 5 March 2001

What recent representations he has received on means testing of benefits; and if he will make a statement. [150490]

Photo of Peter Viggers Peter Viggers Conservative, Gosport

If he will make a statement on Government policy on means testing of pensioners' benefits. [150494]

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

Numerous representations have been made over the years. As the hon. Lady will know, the benefit system has always combined universal, means-tested and extra-cost payments. Each plays a part in meeting people's needs.

Photo of Anne McIntosh Anne McIntosh Conservative, Vale of York

Is the Secretary of State proud of the fact that, under his stewardship, savings have gone down while means testing has gone up? According to his own Department's figures, at least 500,000 pensioners who should be receiving the minimum income guarantee have not applied. Will he pay heed to the representations that he has undoubtedly received from Age Concern, to the effect that means testing does not help the poorest pensioners, but simply puts them off applying?

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

Day by day—indeed, minute by minute—I become increasingly confused about what the policy of the Conservative party is. It was in power for 18 years, and means testing as a proportion of the benefit system increased from 17 per cent. in 1979 to 35 per cent. in 1997. For the sake of completeness, I might add that the figure is now 30 per cent. She must recognise that any Government who want to help the poorest pensioners cannot do so through universal, across-the-board increases. That is why we introduced the minimum income guarantee.

Of course the hon. Lady is right that we need to ensure that as many eligible people as possible receive the minimum income guarantee. As my right hon. Friend the Minister of State and I have told her, we have to assess how much pension people are due when they retire; so when the pension credit is introduced, from 2003, we shall work out whether they qualify for the minimum income guarantee and the pension credit. In that way, we shall be able to target and eliminate pensioner poverty and reward saving. Unless the hon. Lady is proposing that there should be no means testing in the social security system, which is not a policy usually taken up by most elements in the Conservative party and which would be cripplingly expensive, she must accept that the Government are tackling pensioner poverty in the right way.

Photo of Peter Viggers Peter Viggers Conservative, Gosport

The Secretary of State has not answered the question. Before the election, the Labour party campaigned on the basis of ending the means test for elderly people, but in government it has increased its use. The figure is 50 per cent. and rising has something gone wrong or have the Government changed their mind?

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

It is always touching to hear the Conservatives' new-found concern with pensioner poverty, which they allowed to grow when they were in office. When we were elected, we made it clear that our first priority was to deal with and then eradicate pensioner poverty. That is possible only if the money is targeted on the people who need that help most, which is why we introduced the minimum income guarantee. From April, it will rise to £92 a week. The Conservative party has no policy for tackling pensioner poverty, and the only proposals that it has made for pensioners would disproportionately benefit the better off.

Photo of Mr Peter Pike Mr Peter Pike Labour, Burnley

Will the Secretary of State confirm that the Government have done more to help the poorest sections of the community? If we are to do so at an affordable cost, there regrettably has to be means testing. Will he assure the House that at some stage there will be only one means-testing form for income support, for the guaranteed minimum income for pensioners and for housing and council tax benefit, so that we can reduce the number of forms that have to be filled in?

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

My hon. Friend is right. If any Government are serious about tackling pensioner poverty or child poverty, they must give more to the people who need it most. In addition to tackling pensioner poverty, we must help the people who are by no means well off—those who have saved and have a little money in the bank—and that is what the pension credit will do. We are taking that approach for other benefits. Through the working families tax credit, we can help people on low wages to increase the amount of money that they take home, so that they see the benefit of being in work and the difference that the credit can make to their take-home pay.

Right across the board, the Government's strategy has been, first, to deal with poverty; secondly, to ensure that the right incentives are in the system so that it pays to work and to save; and thirdly, to benefit the incomes of the population as a whole. That is what we have started to do, and if we are returned at the next election, that is what we shall continue to do. That is in stark contrast with what the Tories are about, which is to restore the inequalities that they presided over during the 18 years they were in power.