Minimum Income Guarantee

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 4th March 2002.

Alert me about debates like this

Photo of Mr David Rendel Mr David Rendel Liberal Democrat, Newbury 2:30 pm, 4th March 2002

How many pensioners who are entitled to the minimum income guarantee are not claiming it.

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

As at November 2001, 1,200 pensioners in the hon. Gentleman's constituency were receiving minimum income guarantee, and 16,000 were receiving winter fuel payments. The latest estimate of the number of pensioners who fail to claim the minimum income guarantee is reported to be upwards of 390,000 nationally.

The research report that contains those figures warns that care must be taken in interpreting them, as they come from estimates from data that are less than perfect. We have therefore commissioned further research so that we can better identify the people who are entitled to benefits, especially pensioners.

The figures pre-date the latest MIG take-up campaign, which has had a huge response, and produced some 127,000 new successful claims. As a result, those pensioners are on average £20 a week better off.

Photo of Mr David Rendel Mr David Rendel Liberal Democrat, Newbury

I am grateful to the Minister for his answer, which revealed that up to a third of all pensioners who are eligible for MIG are not currently taking it up. Does he acknowledge that his colleague in the other place recently revealed that a third of pensioners who will be eligible for the pension credit will not take it up? Does he accept that, in spite of the efforts that he and the Government have been making to increase benefit take-up by pensioners, they are not working if a third will not take up pension credit?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

That is a misrepresentation of what my right hon. Friend Baroness Hollis said in the other place. She made it clear that, at the commencement of the new benefits system, we expect more than two thirds to take it up, and we will build up that figure. That is in line with what has happened when new arrangements have been introduced previously, such as tax credits. The main point is that we are the first Government in the last three generations of Governments to do something about pensioner poverty. The Liberal Democrats whinge to deceive. They whinge, whinge, whinge. The Government have made an effort to eradicate pensioner poverty, but the Liberal Democrats have opposed every measure that we have taken, whether it be winter fuel payments or the minimum income guarantee. The truth is that they talk a good game, but it is the Government who do something about it.

Photo of Mr Bill Tynan Mr Bill Tynan Labour, Hamilton South

Does my right hon. Friend accept that, although take-up is not perfect, measures such as that introduced in October last year under which every fresh pension application is automatically assessed for the minimum income guarantee will help to ensure that it improves?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

The Government have never concealed the fact that the minimum income guarantee is a rough and ready measure, but it needed to be taken and 2 million pensioners have been lifted out of poverty as a consequence. I am not going to apologise for that. Why should a Government who are taking 2 million people out of poverty apologise for it?

We made it clear that the interim measures would be replaced by the pension credit, which, for the first time since the creation of a national pension system, will give pensioners a minimum income guarantee and pay them a reward for saving too. Under the current system, thrifty pensioners who save lose out, but the new system will ensure that we deal not only with poverty, but with those pensioners with small savings who lose out—a good deal for all pensioners under this Government.

Photo of Paul Goodman Paul Goodman Conservative, Wycombe

As the minimum income guarantee, like so many Government credits, depends on means-testing, by what date will the Government achieve the aspiration set out by the Chancellor when he said:

"I want to achieve what in 50 years of the welfare state has never been achieved. The end of the means test for our elderly people"?

By what date?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

By October 2003, the introduction of the pension credit will mean that new pensioners coming up to claiming their—[Interruption.] I am answering the question. Unlike Opposition Members, I do not have to spin. I tell it as it is.

By October 2003, for the first time, pensioners claiming their basic state pension will claim for the pension credit at the same time. This Government are targeting pensioner poverty, not pensioners. As a consequence, 2 million pensioners have already been lifted out of poverty—and, I may say to Mr. Goodman, pensioners were pushed into poverty by the last Tory Government.

Photo of Chris Bryant Chris Bryant Labour, Rhondda

Despite all the success of the Government's measures in recent years in trying to tackle pensioner poverty, I know from the former mining communities in my constituency that many pensioners still feel reluctant to claim the minimum income guarantee because they worry about the stigma attached to it. What further practical measures can we take, especially in former mining communities, to ensure that every pensioner is lifted out of poverty by claiming the minimum income guarantee?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

I also represent a mining constituency. The winter fuel payment and the creation of the new pension service and the pension credit are designed to assist retirement pensioners, including those abandoned bythe last Conservative Government in the coalfield communities. In addition, we are working with the National Union of Mineworkers pension trustees to improve basic pensions from the mining fund. It is important that all those building blocks are put in place and we must also improve investment in services in local mining communities, which older people use more than others. Pensioners' income, environment and social and health care are all getting big investments under this Government, and they will continue to get big investments.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Health)

Will the research to which the Minister referred look at take-up in areas such as Wales, the north of England, Scotland, Cornwall and Northern Ireland? If, as I suspect, it shows that the deficiencies of the minimum income guarantee are more apparent in those regions, what steps will the Government take regionally and nationally to increase take-up?

Photo of Ian McCartney Ian McCartney Minister for pensions, Department for Work and Pensions

The research covers the whole country. This Government are concerned about and interested in pensioners wherever they live in Britain. The purpose of the new pension service is to maximise Government involvement with pensioners and their organisations, so the research will inform us on how best we can work more closely with those organisations and on take-up campaigns over the next few years. That is the focus of the new pension service.