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Fairness and Security in Old Age

Part of the debate – in the House of Commons at 1:14 pm on 10th September 2003.

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Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions 1:14 pm, 10th September 2003

I am surprised that the hon. Gentleman did not pay tribute to the fact that we are the first Government to outlaw age discrimination. In a range of arenas in the private, voluntary and public sectors, we need to be on guard against such discrimination—not least in the national health service, where we have taken major steps in that respect.

Our strategy for older people involves a number of strands, but I would emphasise the need for all pensioners to have a decent and secure income in retirement, opportunities to remain active in later life—there is a role for employment, of course, but also for education, lifelong learning and community activity—and a better and more co-ordinated health and care system to promote the independence of old people. It is also important at central level—even more so at local level—that we involve older people themselves in running and consulting on such services.

I turn to incomes and pensions. That is my brief, and it is extremely significant to the debate. We are tackling pensioner poverty and will continue to do so. Our approach strikes a balance between providing a solid foundation of support for all, looking after the needs of all older people through pensions while targeting support at those who need it most. We make no apology for targeting the poorest pensioners. Income support through the minimum income guarantee introduced improvements, which have increased in line with earnings since 1999. Current rates are £102.10 for single pensioners and £155.80 for couples. The winter fuel payment benefits all older people, providing an additional £200 a year for around 11 million pensioners. From this winter, there will be an extra £100 for households containing someone aged 80 or over, benefiting an estimated 1.9 million people. In addition, free TV licences are available for all those aged 75 or over, without any income test.

In 2003–04, the Government will spend around £8 billion extra a year on pensioners as a result of policies introduced since 1997. Although much of that benefits all pensioners, as I have been at pains to emphasise, it includes £3.75 billion more on the poorest third of pensioners. It is a matter for debate in this House as to whether Opposition parties agree with our determination to target extra resources on the poorest, but we think that that is right in terms of social justice. That figure amounts to almost six times more than would have been provided by an earnings link to the basic state pension since 1998. Those who argue simply for the re-indexing of the pension with earnings must recognise that that would deny extra help to the poorest. As a result of our measures, the poorest third of our elders will be approximately £1,600 a year better off.

Rightly, it has been noted that many of the poorest among our elderly population are women. There are two reasons for that—women's increasing life expectancy and, more importantly, the fact that their work patterns mean that they are less likely than men to have occupational pensions and their savings may have diminished. About two thirds of pension credit beneficiaries will be women. We need to highlight that in our campaigns on take-up.