Female Pensioners

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 13th December 2004.

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Photo of Dari Taylor Dari Taylor PPS (Ms Hazel Blears, Minister of State), Home Office 2:30 pm, 13th December 2004

How his Department's policies have affected female pensioners since 1997.

Photo of James Purnell James Purnell PPS (Ms Ruth Kelly, Minister of State), Cabinet Office

What the effect of his Department's policies on female pensioners has been since 1997.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

Since coming to office in 1997 we have taken significant action to improve the pensions of women, and we are continuing to do so. We are tackling the legacy of past inequalities in society and the pension system through pension credit and other measures. As a result, men and women receive approximately the same amount from the state pension system.

As the Pensions Commission recognised,

"a number of recent changes in the state system will improve the future position of female pensioners".

We are not complacent, however. We intend to continue to make progress, and have undertaken to publish a report on women and pensions next year.

Photo of Dari Taylor Dari Taylor PPS (Ms Hazel Blears, Minister of State), Home Office

Does my hon. Friend acknowledge that if the basic state pension were the prime source of income for women in retirement, that would be disastrous for them? More than 85 per cent. of women gain little from it, if anything, and more than 60 per cent. have no entitlement to an income from it. Will my hon. Friend acknowledge that such an arrangement would be a disaster, and in so doing acknowledge that the Conservative party's policy is an absolute nonsense?

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

I will not be seduced, as a politician, into being political about this, but I do acknowledge that gender differences and assumptions about gender in the past—some have now been rectified for a younger group of women—have caused a big difference in terms of access to the full basic state pension. That is why we are not tempted to put all the extra resources into a link between earnings and the basic state pension, which would be good news for many men but not such good news for women.

One of the successes of pension credit is the high take-up of the guarantee. I am pleased to say that 320,000 more pensioners—by definition, the poorest—receive the guarantee element than did so in April 2003. Whereas under the Conservatives the guarantee level was a miserly £69 a week for a single person, from next April it will be £109 a week. That is the difference—not just words, but £40 a week—between what the Conservatives did and what a Labour Government are delivering.

Photo of James Purnell James Purnell PPS (Ms Ruth Kelly, Minister of State), Cabinet Office

I thank my hon. Friend for visiting my constituency recently to see the efforts made by Tameside to raise the level of take-up of the guarantee. Does he agree that integrating all the different agencies dealing with housing benefit and the Pension Service is the way to get people to sign up, and will he spread that knowledge throughout the system?

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

I thank my hon. Friend for inviting me to visit Tameside. I was very impressed to see what a progressive local authority can do to deliver benefit entitlements to people in need. As my hon. Friend knows, we developed joint teams as part of our link-age project. Social services departments worked with local branches of the Pension Service, joined in some areas by primary care trusts or voluntary bodies such as Age Concern. That is how we deliver a welfare state locally, based on the needs of elderly people. In the past we have tended to expect elderly people to discover an often complex local welfare state, but Tameside is showing the way ahead. We intend to roll out its scheme throughout the country during the next year or two.

Photo of Ms Annabelle Ewing Ms Annabelle Ewing Spokesperson (Social Security (SNP Shadow Scottish Minister); Education & Skills; Home Office; Law Officers; Work & Pensions)

The Minister will be aware that less than half of women pensioners in Scotland are entitled to the full basic state pension and that, after seven years of Labour Government, one in five pensioners in Scotland still lives in poverty. In light of the same, will he undertake to make representations to the Chancellor of the Exchequer to introduce in his Budget a citizens pension, thus ending the Government's discredited means-testing?

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

There is a rich debate about the future and we are all engaged in it, but given the gender differences when it comes to national insurance and access to the basic state pension, which my hon. Friend Ms Taylor pointed out, I wonder whether the hon. Lady would welcome the impact that pension credit is having on poorer pensioners in Scotland. Two groups that overlap—the older elderly, often over-80, and women—are benefiting from that selective approach to delivering social policy. I am sure that, in a more moderate moment, she would want to welcome that.

Photo of David Willetts David Willetts Shadow Secretary of State for Work and Pensions

May I draw the Minister of State's attention to the proposals that we have made today for giving women a better deal from the contributory state pension? The Secretary of State was on the radio at lunchtime saying that it was an absolutely brilliant idea with which he totally agreed—

Photo of David Willetts David Willetts Shadow Secretary of State for Work and Pensions

Well, at least he said that he would consider it. I invite the Minister of State to go a little further and to recognise that the problem that people have been talking about—the fact that women do not have full entitlement to the basic state pension under current contribution rules—could be tackled by the practical proposals that we have made today.

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

Although I have not had the privilege yet of reading the hon. Gentleman's speech, I understand that he was predicting what a future Labour party manifesto may say, so having lost the job to write his own, he is drafting part of ours. We are in favour in the Department of a flexible labour market.

As I say, there is a rich debate going on about the future state pension. I seriously welcome the hon. Gentleman's contribution to that debate, but we need to be careful about different cohorts and groups. What is right for the elderly person, often the elderly lady over 80, will not necessarily be right for her daughter, let alone her grand-daughter. More workers today, including young workers, are members of occupational pension schemes. We welcome today's publication of the report by the Employer Task Force on Pensions. We need to have a combination of occupational pensions, others savings and state pensions, so that today's young will have incomes in retirement above means-tested levels.

Photo of David Willetts David Willetts Shadow Secretary of State for Work and Pensions

The speech was to Labour's think tank, the Institute for Public Policy Research, so I thought the least I could do was to announce what would be in Labour's next manifesto. If the Minister of State is being so open-minded, does he accept that there is a problem with the way in which the pension credit treats women pensioners? Does he accept that the savings credit rules, which assume that people have a full pension from the basic state system, in practice penalise women? Does he further accept that it is bad enough that many people find themselves facing a withdrawal rate of 40p in the £1 under pension credit, but many women pensioners, because of the way in which the savings credit works, find themselves facing a loss of £1 of benefit for every £1 they have saved? Will he therefore include in his review the effect of the Government's own means-tested benefits on women?

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions

The hon. Gentleman has made a serious point about quite an intricate but important matter: the guarantee and what we say about savings. Will he acknowledge—not now, because he cannot come back at me—the fact that 320,000 extra pensioners, those most in need, are now getting the guarantee compared with only a while ago, and that that is a major step forward? In terms of his honesty, it has obviously done him some good going to the IPPR. I think what he is saying is that it was surely wrong that, under a previous Government, every extra £1 of savings, or work or occupational pensions was knocked off the income support system, pound for pound. I repeat that, in those days, the guarantee was £69 a week. In spring next year—I think that it will be a good spring in terms of weather of differing kinds—we will be giving £40 more a week to single pensioners. That is the difference between us. He does a good lecture but the delivery of his party is pretty poor.