Pensions

– in the Northern Ireland Assembly at 11:15 am on 3rd October 2000.

Alert me about debates like this

Photo of Kieran McCarthy Kieran McCarthy Alliance 11:15 am, 3rd October 2000

I beg to move

That this Assembly calls for an immediate increase from the Chancellor of the Exchequer’s package of £5 per week in retiremant pensions and for restoration of the index-linking of pensions to earnings.

I am extremely grateful to be able to bring the plight of our senior citizens and pensioners to the Assembly. I am also ashamed that they are forced to live in almost primitive conditions half-surviving on an outdated and totally inadequate pension system.

Senior politicians, particularly those across the water, should hang their heads in shame when they see how many of our senior citizens cannot even afford to keep warm during the winter months. Regrettably, many people end up on a hospital trolley as there are no beds nowadays, not even for our elderly folk — although I am slightly encouraged by the remarks of the Minister of Health, Social Services and Public Safety this morning. I hope that what she has said does come to fruition during the winter months.

The appalling treatment of our senior citizens has got to stop now. Elderly people have served their community and country well. Last week, on behalf of a cross-party group of Assembly Members, I was privileged to sponsor a visit by a group of senior citizens representing over 15 different age-sector groups from all over Northern Ireland. I pay tribute to all those groups who are working quietly in our community without publicity. Their only role is to provide that something extra or useful for their elderly fellow citizens. I want to see senior citizens getting support from all elected representatives to provide them with a decent income and a decent environment in which to enjoy their latter years. Remember, fellow citizens and fellow Members, it is them today and us tomorrow.

I am proposing the motion for a number of reasons, not least fair treatment and responsibility. Members need to ensure fair treatment for older citizens. We must fulfil our responsibilities as elected politicians. It is fashionable, particularly in New Labour circles across the water, to talk about responsibilities that people owe to the state. Today I want to talk about the responsibility that we who represent the state owe to the people, particularly the elderly.

The motion urges the Chancellor to raise pensions immediately and to restore the link between pensions and earnings. The basic pension is currently £67·50 for a single person and £107·90 for a couple. Would anyone in this House, or any Member at Westminster, in the Scottish Parliament, the National Assembly for Wales or Dáil Éireann, like to live on £67.50 per week? I think not. Let us treat everyone equally.

This useless low pension, recently raised by the derisory amount of 75p, is the most important single element of income in retirement. Seventy per cent of pensioner households depend on state benefits for 50% of their income, and 13% receive all their income from state benefits. Therefore, pensions are crucial to our older citizens. However, many people, particularly older women, do not have a full contribution record due to having earned less than the lower earnings limit, spent time out of the labour market caring for and raising a family, or paid the reduced National Insurance stamp. Even if someone has a full basic pension, it is not sufficient to live on. Its value in relation to average earnings has fallen since the link with earnings was broken in 1980. Maggie Thatcher was the one who broke the link. She can supplement her pension with book tours, tobacco advertising and suchlike. The majority of our pensioners do not have that luxury.

I agree with Barbara Castle, who only last week said that a wealthy country such as the UK could afford to give dignity to its pensioners. She also said

"breaking the earnings link is tantamount to a fraud since contributions into the national insurance fund are based on earnings, but the value of the pension is linked to prices."

That is what Barbara Castle, a woman of 90-odd years of age and with much experience, has to say on the subject. I agree with her that we should restore the link with earnings. A leading trade union official warned last week that restoration of the link is no longer an economic necessity, it is a political imperative.

Had the policy that linked increases to earnings rather than prices remained, as Barbara Castle argued and we now propose, the basic pension would now be around £30 higher. We acknowledge that the new minimum income guarantee represents progress. Work carried out by Age Concern and other groups recommended a basic level of pension adequate to support people. Based on their research they recommend at least £90 per week for a single person and £135 for a couple.

In the long term the Government must seriously consider raising pensions and ensuring that they remain adequate. That is why the link to earnings must be restored. Until pensions are raised, this low rate — which is lower than the main weekly income support rates of £75 for a single pensioner aged up to 74 and £116·60 for a couple — will keep far too many elderly people in poverty.

Assembly Members should be aware that average weekly earnings in 1999 were £384. Using either the rate of pension or the rate of income support, pensioners receive less than one fifth of the average weekly earnings amount. However, they spend a high proportion of their income on the bare necessities such as housing, rent, fuel and food. For pensioners living alone, more than half their expenditure is on these essential items. The criminally low pension rate insults the elderly and keeps them deprived of comfort and dignity. It also keeps them isolated from society.

Members now have an opportunity to put this right. Fortunately, we are not powerless in the face of this situation. The Assembly has the ability to effect change and improve the lives of this large group of citizens. We have the responsibility to act, and it is our duty to see that we protect and care for vulnerable groups in society, such as the elderly and children. I propose this motion, and I appeal to Members for their support.

The Assembly must send a clear message to the Chancellor that our pensioners deserve more and that the politicians of Northern Ireland are determined to provide for them. Unlike the Labour hierarchy, we do not need pensioners from other nations to lecture us — we know our duties without having to be told them in the august presence of the former President of the Republic of South Africa, Nelson Mandela.

I want to assure, and perhaps warn, the Assembly that this is just the beginning, and it is part of a greater action. The motion seeks to influence the Chancellor in the clearest way possible. However, raising the pensions is not enough to ensure equality for the elderly in society. The Assembly has a wonderful opportunity to create the kind of society we desire to live in. I want a society that includes all sections and that promotes the sharing of resources with the vulnerable, thus enabling everyone to enjoy their lives to the fullest. Greater pensions are just a part of this.

I will also be asking the Minister for Regional Development to provide free transport for pensioners. I totally oppose the Minister’s plans to pass the financing of free transport on to ratepayers through local councils. If the Republic of Ireland’s Exchequer can provide free public transport for pensioners, then surely a wealthy country such as the United Kingdom can do likewise. Only 14% of pensioner households have a car compared with almost 70% of the population as a whole. Public transport that is easily accessible, clean, safe and timely is essential for the older population. This will ensure that they can move freely around Northern Ireland, and be given equality of access to shopping, leisure facilities and health resources.

My Alliance Party Colleagues and I will raise the issue of the winter fuel allowance with the Minister for Social Development. We want to ensure that the value of the allowance keeps pace with the price of fuel. We all know the astronomical heights that fuel prices have now reached. We welcome the £150 winter fuel payment for this year, and I hope that every pensioner who is entitled to it gets it. I will also work to provide free television licences for older people generally — not just for those over 75.

As a member of Ards Borough Council, I have already proposed the free use of council community centres for older people’s organisations during less-used periods of the day or evening. These are the things that can improve senior citizens’ quality of life.

Now that the Assembly is operational we have the power to effect changes and apply policy. As I have already said, I believe it is our duty to use this power to help the elderly. In the Alliance Party we use words like "integration, respect, pluralism, sharing" — not "separation", and today there is an opportunity, not only for the Alliance Party, but for every party in this House to show what is meant by those words.

Northern Ireland is a society beset by division — or at least it was. Let us hope we have moved on. It is a place where politics is too often about somebody being "anti-" this or "opposing" that. This motion challenges that mindset and that manner of doing business. Instead of saying "No", we can all say "Yes". We can say that we do not want pensioners cut off or isolated. I do not want to express this motion in negatives; I want to be positive. I want to use this Assembly to make the changes we need and deserve. I want to say to the older citizens of Northern Ireland "You are valued and respected; you deserve a decent pension, because you deserve to live in dignity; you deserve to decide how to spend your own money; you deserve to have options; you deserve to make up your own minds." Elderly people are a very important part of society and should not be shunted off to one side as a group who has had its day. They should be regarded as a vibrant segment of the community — people who still have so much to offer every one of us. This was witnessed last week in this very building when, as I have said, we met 15 different groups.

No less of an authority than the Secretary of State for Social Security, Rt Hon Alistair Darling, has admitted that in the UK the latest statistics show that a further 100,000 pensioners are living below the breadline. That is shameful. The total has now risen to the scandalously high figure of 2·3 million. Tessa Harding of the Help the Aged organisation said that it shows that the pensioners’ situation is more desperate than ever.

This Government must heed this as a warning that their policy on pensions is simply not working, and because of that, I want to end this speech with an appeal. It is not an appeal for a change in policy or a motion offering further advice to Ministers in London. I want to issue a personal appeal — a challenge — to everyone in the Chamber today.

Every one of us knows a pensioner, and every one of us owes something to pensioners. The Assembly should be sending out its message of support and encouragement, and we, as individuals, can do this by saying thanks to pensioners by saying "You are important", by saying "You are valued and remembered", but mostly by saying "You are part of us. As individuals and as a society we will not let you down".

This motion was proposed for a variety of reasons, but chiefly because we must ensure fair treatment for the elderly. As elected representatives that is our responsibility.

In the days of Toryism and Thatcherism — thank God, they are a thing of the past, never to return — we referred many times to that Government’s being an uncaring Government, probably because of their uncaring policies towards pensioners, amongst others. Those pensioners have endured such misery over the years that we appeal to this New Labour Government never to abandon or treat senior citizens with such contempt again. Thatcher was dubbed "Thatcher the Snatcher". It was her party which left pensioners in the abominable state they are in. Shame on her!

"Hague the plague", who is now on his knees pleading for the pensioners, would be no better. Members can be assured that Mr Hague is looking for votes — once a Tory, always a Tory. I appeal to those parties with Members in the Executive to do their duty. There is no use in empty promises. Now they have a chance to prove their worth and their commitment.

Photo of Mrs Joan Carson Mrs Joan Carson UUP 11:30 am, 3rd October 2000

The motion is very topical and important for all those approaching, or over, 65 years of age. It matters to them. Younger people think it does not matter, but it catches up very quickly, and they all have to think about pensions. Whereas I would support any increase, it is difficult to plump for a nice round figure of £5 without considering its relevance to inflation and to the redundant earnings related pensions level. There is some debate as to whether state retirement pensions should reflect and protect against inflation or set out to reward retired people on the basis of the earning levels of the workforce. This is further complicated by the large number of people who have been able to contribute to occupational pension schemes — for example, Civil Service, local government and company schemes.

The Chancellor of the Exchequer told us that one in six pensioner couples retire on more than £20,000 per year, but this is mainly due to the contribution being made from their occupational pensions — and that is two people, do not forget. The Public Service Pensioners’ Council is concerned with a widening gap between what pensions are and what they would have been had the wages index not been dropped in 1980. We heard a lot of grief there about Mrs Thatcher, but as a woman I have to protect her. I agree, with the way things have gone, that dropping of the index link was a mistake. When it was dropped things were level and not too bad, but they have now been overtaken by inflation.

The Public Service Pensioners’ Council has commissioned the trade union research unit at Ruskin College Oxford to undertake a study on the effectiveness of pension provision for former public service employees. This study will assess the extent to which these pensions provide adequate financial means as the recipients get older and draw their pensions for a longer period. With our increased ageing population pensioners will depend more and more on other services — for example, the home care service and care in the community.

Labour has made many statements in an endeavour to retain pensioners’ votes. On 7 February, in the House of Commons, Mr Darling stated

"Our objective is to make sure that retirement is a time to look forward to".

The Rt Hon Gordon Brown said in his Budget speech that a strong caring society takes seriously its obligations to the elderly, but 75p is hardly serious. It would be better perhaps if the £150 tax-free fuel allowance were paid out at £3 per week — it might help a wee bit in that way.

This is a quote from a speech given at the Labour Party Conference on 27 September by Alistair Darling:

"No pensioner should have a weekly income that is so low they cannot meet their basic needs and we plan to increase the Minimum Income Guarantee to £90 per week."

That is another promise we should hold the Labour Party to.

I urge the Government to develop a scheme that will help those with modest occupational pensions and savings and not penalise those who have worked hard and saved for their retirement. That is an important issue that has not been touched on yet today.

The Government should listen not only to those with occupational pensions but to the increasing base of pensioner power and treat it with respect. I have great sympathy for the motion, but I remind the proposers that this is a reserved matter, and the Assembly has no power to initiate change. We can, however, send a strong message and make representations to the Chancellor in the hope that he will make changes in his next Budget and thus hold the Labour Party to its promises.

Photo of Mr Donovan McClelland Mr Donovan McClelland Social Democratic and Labour Party 11:45 am, 3rd October 2000

Many Members have put their names forward, and, reluctantly, I am going to have to hold them to their time of six minutes. That will allow the Minister, whom I am glad to see here, a chance to respond and for the winding-up.

Photo of Patricia Lewsley Patricia Lewsley Social Democratic and Labour Party

I start by applauding Dame Barbara Castle’s superb speech to the Labour Party conference in Brighton last week, where there was a moral victory over the Government in the debate over the proposed 75p increase in the basic state pension. Many people were moved when she accused the Government of

"revealing that instinctively they belong to that group of people who believe only the deserving poor should get their rights."

She went on

"But I think all the poor are deserving. It is not just about money: it is about human dignity."

The Government were embarrassed at the scale of attack by campaigners on this issue, prompting Mr Gordon Brown to make some concessions in his speech to the conference. However, in those concessions there remain many pitfalls and anomalies for pensioners in that package. The minimum income guarantee will rise from £78·45 to £90 to ensure that no pensioner has to live on less than £90 a week. However, the gap between the basic state pension and the minimum income guarantee would be wider than at present. Therefore we could have the situation where a pensioner who saves up to £20,000 — which would generate an income from a private pension of about £20 a week — would gain nothing. The first £20,000 of a private pension saving could be wasted.

For every £1 of pension income, pensioners will lose £1 in minimum income guaranteed benefit, and if you add to this the fact that the minimum income guarantee will always rise faster than the basic state pension, the gap between them will grow year after year. This is a disincentive to save into a private pension. Although there will be a new pension credit — which means that for every £1 of pension income, only 50p will be lost in the minimum income guarantee benefit — this will not come into place until 2003, and pensioners will have no respite from their current financial difficulties until then.

Mr Gordon Lishman, the director general of Age Concern in England, summed up Mr Brown’s pledges last week by saying

"The Chancellor has missed the opportunity to put the minds of millions of today’s pensioners at rest on the future of the state pensions."

I am sure that many in this House would agree. The main issue is that the annual increase in pensions is in line with prices and not the annual increase in wages, so many pensioners find themselves caught in a poverty trap, as they find their income continuously eroded, and they experience a reduction in real buying power.

I do not believe that any one in the Chamber today is unaware of how difficult it is for elderly people to manage on a state pension. Even with the winter fuel allowance of £150 and a free TV licence, many people are merely existing on the breadline or using their life savings to attain a basic standard of living. Each year many of our pensioners die of cold-related illnesses, because they cannot heat their homes. That is a proven fact.

Yesterday we supported the First Stage of this Bill. While I commend the proposal in the Child Support, Pensions, and Social Security Bill for an additional pension for carers, long-term disabled and people on low incomes, this legislation makes little or no provision for pensioners, who have worked hard and done without to save for their old age. Those efforts will mean nothing if they are to be disenfranchised and penalised for their prudence. It is essential that there be adequate pension provisions for this section of the community, which has been ignored for a long time.

There are particular benefits for women who have given up the prospect of employment to care for an elderly or disabled relative. It is right that they receive recognition for the invaluable community service that they have provided, caring for the elderly and people with disabilities. For a long time these people, mainly women, were disenfranchised because they did not have the necessary national insurance contributions to claim their pensions, and were forced to rely on social security benefits for their income, which kept them in the poverty trap.

I support the motion because I, like many others in the House, want to see change for the better. However, when voting on this motion, we must also face the reality of our own agenda. This afternoon, we will probably agree the accelerated passage of the Child Support, Pensions and Social Security Bill proposed by the Minister for Social Development. In doing this we will effectively be voting to accelerate Gordon Brown’s new package as it stands, which renders this motion irrelevant. As legislators, we have a responsibility to bear that in mind during this debate.

Photo of William Hay William Hay DUP

I support the motion, at least in principle. This is only a start. I think we would all agree that many senior citizens are living on the breadline. One thing that surprises me is that the proposer of the motion, in many cases, contradicts himself.

For example, as public representatives, we have all, over the years, been trying to do what we can for senior citizens. I remember sitting on the council in our own city of Londonderry when many motions came in about free travel for senior citizens. Over the years, all the parties in the Province did that quite well. It is sad, then, to hear the proposer saying that he expects the Department for Regional Development to foot the whole bill for free travel for senior citizens. He and his council now have an opportunity to look at providing some money. I do not think the Minister is asking for all of it from local authorities. He is saying very clearly that a scheme has been announced. He is looking to local authorities to pay for part of that scheme. That is a unique opportunity for public representatives across the Province to get involved with the Department and ensure that our senior citizens avail of the facility of free travel.

The proposer was quite clear — correct me if I am wrong — that he expected the Regional Development Department and the Minister to find the money. That is what he said. There are councils in Northern Ireland that have taken up, and will be taking up, this scheme. Councils that support the scheme will probably be allowed to go ahead with it. Neighbouring councils will be complaining because senior citizens will not be able to afford the free travel. That is the tragedy.

As public representatives — and especially as councillors — we have an opportunity to avail of that scheme. I encourage those Members who sit on local authorities in Northern Ireland to take up that scheme, and not to expect the Department of Regional Development to pay entirely for it.

There is no doubt that over the years both the Labour Party and the Conservative Party have used this issue as a political football. For senior citizens, today is only a start. Some of them live on the breadline. This is the year 2000, but some of them still have to choose between putting on a fire and buying food. That is a tragedy. It is an indictment of both Governments. For 15 years, the Conservative Government did absolutely nothing for senior citizens. Now we have a Labour Government which, for whatever reason, sees it as politically correct to try and give our pensioners a reasonable amount of money to live on. I support the motion in principle, but it is only the start of what we need to achieve for senior citizens.

We should also welcome the decision by the Minister for Social Development to increase the winter fuel allowance by £50 per week. I heard some public representatives complaining about even that. There is no real means test for the winter fuel payment. It is only necessary to establish that a certain number of benefits are being received. Some of those benefits are far-reaching and very wide. Most people — and not only senior citizens — who are seriously on the breadline, or who are socially disadvantaged, will work very closely with the department to make sure that that money is paid out. That is £50 per week on top of what was already there. That has to be welcomed.

We all have a responsibility as public representatives to make sure that senior citizens are well off. I visit many homes in my own constituency, and many senior citizens are not living at all; they are only existing. That is the tragedy of it all in this year 2000. I am surprised by the way the proposer contradicts himself. It is the responsibility of all of us to try, when we get the opportunity, to help our senior citizens. Through local government, we now have that opportunity. In principle, I welcome this motion. At least we can have a full debate on what we need to do for senior citizens.

Photo of Mr Mick Murphy Mr Mick Murphy Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I support the motion. We talk about pensions, but it is about those in our society who are in need of help. The very people who have given so much to the fabric of society are, in retirement, treated with contempt. Instead of having the dignified life and comfort that we owe them, elderly citizens are left out in the cold with £67·50 for a single person, and £116 for a married couple. How did this come about? The former British Government linked pensions to earnings, which meant that pensions were related to inflation and not to how much our wages increased each year. We all know how Governments love to keep inflation — that is, the growth of the economy — down. Pensions have to be related to wage increases. In the meantime, the pension should be massively increased to bring it up to an acceptable standard. £5 per week is an insult. Give retired citizens a dignified and comfortable life.

12.00

I would ask the Minister for Regional Development to put free transport for senior citizens into his programme. In the South of Ireland, pensioners benefit from over IR£100 per week as well as having free public transport, free television licences and free telephone rentals.

A pensioner in the Republic can board a bus or train and travel from one part of the island to the other free of charge. However, a pensioner from the Six Counties has to travel to the border at their own expense in order to avail of free travel in the South of Ireland.

Some would say that a proper pension and free transport would not be in line with the Chancellor of the Exchequer’s plans to keep down inflation. We must remember that ten years ago when Germany was unified the East German citizens who had not paid into a pension fund were immediately given full pension rights under the new Government policy. It is time we were brought into line with other nations.

I support the motion.

Photo of William Hay William Hay DUP

I would correct something. I mentioned £150 per week. This relates to a one-off payment of £150 to pensioners for winter fuel.

Photo of Prof Monica McWilliams Prof Monica McWilliams NIWC

I feel a bit like the person who telephoned ‘Talkback’ last week and said that he was fed up with people saying that Ulster was at the crossroads. He said that Ulster is not at the crossroads — Ulster is at the roundabout. I assume he meant that we were going round in circles. In many ways I feel like that in relation to this debate.

For a number of years the Labour Government have had the opportunity to address this issue, and we saw, at their party conference last week in Brighton, what happens when they do not seriously address it. They are now going to have to go back and address the policy seriously.

I was concerned — and when the old Assembly was sitting I made a submission to the Social Security Committee, as it was then called — about the changes that were going to happen to supplementary benefit, which is now known as income support. In those days there was the state earnings related pension scheme, and it was treated like a disease. I always thought SERPS was a funny name because it sounded like HERPS — herpes. They treated it just like a disease and got rid of it without giving any consideration to what might happen. We then saw Thatcher — the pension snatcher — taking away what people rightly deserved. The Labour Government have not done anything different.

Help the Aged tell us that 50% of the telephone calls they receive are about money problems. If this issue is not addressed then Help the Aged and Age Concern will continue to receive telephone calls from the elderly about their quality of life and their inability to pay for the cost of living increases out of their pension which is not index-linked to earnings.

Last week, Chancellor Brown continued to talk about the enormous disparities. He suggested that there were wealthy pensioners. If that was the case then it should be tackled in terms of taxation. He needs to know that one in three pensioners — 70,000 out of a total of 225,000 claiming retirement pension — are on income support. Another 15,000 are not even claiming what they are entitled to and are below the income support threshold. We have 20% on the poverty line and two thirds of those aged over 70 now make up the poorest 40% of our population. Is that the kind of dignity that we want for our senior citizens?

Let me turn to what we can do in Northern Ireland. I feel a sense of frustration about this debate. It would be easy for Members to agree that this is a Westminster responsibility. It is right that the Assembly should send out a message of consensus, showing that this is an issue that we are concerned about in Northern Ireland, but there are issues that we need to lobby loudly on. The cost of living is higher in Northern Ireland, so we do not benefit fully from the standard fuel allowance. I remember the days when we had an extra fuel allowance to take account of the higher fuel price in Northern Ireland. That was done away with under the parity regulations, but our Minister and others should lobby to try and get that back.

In addition, we get no advantage from housing benefit that is established at the same rate as elsewhere. Pensioners who are owner-occupiers have, in many cases, already paid out for their mortgages. They may be asset-rich but cash poor. However, pensioners in receipt of housing benefit are not getting any advantage from that, because the rate is standard across the UK. Therefore where our costs are lower we are not getting any assistance, and where our costs are higher we are actually losing out. Will the Minister for Social Development address that?

We do not want minimum income guarantees in Northern Ireland. Let us make that clear. We want the earnings link for all pensions, not means-tested benefits. Last week I addressed the National Pensioners’ Convention in the City hall. A spokesperson there said that the elderly are fed up being made to think that they are getting something for nothing. The elderly contributed to schemes when they were earning money and paid their National Insurance contributions; they deserve to have the index link restored. The Government, including our own Ministers, talk constantly about getting people into work and off welfare, as if some stigma is attached to welfare. At the same time, we drive the elderly in the direction of welfare: either there is a stigma attached to welfare or there is not. If the Government think that there is, and want people off it, then why are they saying to the elderly that more of them should go on it? They are increasing the number of means-tested benefits, which the elderly are increasingly unlikely to take up. This is not an old-age problem but an age-old problem.

I am sick to death of the Labour Government writing reports such as ‘Building a Better Britain for Older People’. It is mostly rhetoric. We should set up an inter-departmental committee for the elderly. The Minister for Social Development is here, as are the Minister of Health, Social Services and Public Safety — who has a lot of responsibility in relation to home-helps et cetera — and the Minister for Regional Development. We have discussed transport, meals on wheels, home helps, basic pensions and basic allowances. Let us get that committee off the ground as soon as possible.

Photo of Robert Coulter Robert Coulter UUP

I speak as perhaps the only Member on the Floor of the House who is in the group called the elderly. Mr Deputy Speaker, you and I are in a unique position today. The learned Clerk might clarify whether that puts me in an awkward position — do I need to declare an interest in the debate? I thank Mr McCarthy and, on behalf of the elderly, all the young ones in the Assembly who have supported the motion. We, the elderly, are not asking for hand-outs; we are asking for dignified treatment. We are asking the Government to take seriously the fact that we have, through a lifetime, paid our subscriptions. We are in our twilight years and ask to be treated with dignity.

Ms Lewsley raised the point that the Government’s proposition is not straightforward. Those who have invested in private pension schemes are being penalised. We must not simply call for pensions to be increased by £5; we should examine these issues also. Indeed, I take exception to the proposition that £5 should be added. The proposition should have said "at least £5 should be added" because to introduce a finite figure of £5 is to limit the effectiveness of the proposition.

I do not want to take up time as most of the points I was going to make have already been made very eloquently. As a member of the elderly sector — and the elderly make up a third of the population — I thank the House and ask all Members to support the motion.

Photo of Mr Donovan McClelland Mr Donovan McClelland Social Democratic and Labour Party

Before calling the next Member I must declare an interest in this matter. Not only am I slightly above retiring age; I am also on the board of Help the Aged.

Photo of Alex Attwood Alex Attwood Social Democratic and Labour Party

I want to address this issue in a slightly more "targeted" way — if that is not an appropriate use of the word. This issue is about the income that pensioners enjoy and, more particularly, the income that pensioners in poverty endure. That is the theme that I want to address in the context of giving my support to the letter and spirit of the motion.

Figures quoted earlier indicate that over two million pensioners in Britain are now living in poverty. There are approximately 10 million pensioners in Britain so we have a duty to everyone, but particularly to the most disadvantaged. My comments are made in this context. We are debating this issue because for many decades pensioners have not been treated as they should have been, and that was particularly so over the last two decades of Tory rule. During that period the highest one fifth of pensioner incomes rose by 80%, but the lowest one fifth of incomes grew by just 30%. Particular attention must be paid to this disparity of income, and especially to the incomes of pension claimants living in poverty or on low incomes.

There are a number of responses to the motion itself and to the general problem of poverty among pensioners. First, there must be a guaranteed minimum income for all pensioners, which must benefit those living in poverty the most. The Government have announced the introduction of a guaranteed minimum income, which will increased to £90 by next April. A minimum of £90 is not an adequate answer to pensioner poverty.

The family budget unit has produced a low-cost but acceptable income standard which, it claims, is needed by households with people aged between 65 and 74 to maintain a healthy diet, material security, social participation and a sense of control. The unit thinks that the acceptable standard of income for a single person is £123 and is £184 for a couple. Under these criteria, neither the single person nor the couple would have the benefit of a car.

We should also support an increase — indeed, a very significant increase — in the guaranteed minimum income, because that would benefit the two million people who are pensioners and who are in poverty.

Secondly, the Government have made the welcome announcement of pension credit for those who have saved over the years, but who have not saved as much as others might have been able to do. We need to have that pension credit introduced earlier than the Government’s projected date of 2003. In that way, those who have been in work and have the benefit of savings will also have their incomes increased because their pensions and savings are not adequate to meet their day-to-day living costs.

Photo of Prof Monica McWilliams Prof Monica McWilliams NIWC 12:15 pm, 3rd October 2000

This is all extremely complicated. More and more pieces are being added on, and that is just making the system worse when we should be making it simpler to combat the low take-up. Does the Member agree?

Photo of Alex Attwood Alex Attwood Social Democratic and Labour Party

We accept that the state pension should be made to reflect increases in earnings. That is the simple solution, and I am saying "Yes, let us take that step." However, if you are still living on £90 a week as a poor pensioner, the fact that you are going to get an increase in your pension based upon a link to income will not address your difficulties or your poverty. Even if your pension is now related to income, how can you undo the fact that for 18 years that has not been the case? Linking pension to incomes is a help, but it is not a solution— there may be no simple solution. The problem has arisen over 18 years of disadvantage and discrimination against pensioners and the poor, and it will therefore require a complex and systematic solution over a number of years. That is what I am trying to flag up.

This motion goes down the road of fairer provision for pensioners, but if we are to address the multiple layers of deprivation among the poor, we have to go further down that road. We should move to compel all employers to contribute to a pension for their employees. We should also have all employer and stakeholder schemes provide a minimum income at retirement, based either on a portion of final earnings or on a career average.

This is a multi-layered problem that requires a multi- dimensional answer. The motion contains two answers, but more are required.

Photo of Mark Robinson Mark Robinson DUP

All of us will one day be pensioners so we have a vested interest in this subject. As the issue of pensions is currently making the headlines, the motion is timely. I do, however, hope that the proposer is aware that, because this is not a matter for the Assembly, it is unlikely to sway the Chancellor of the Exchequer. We must also realise that it is unlikely that either of the main political parties will restore the link as suggested in the motion. Nevertheless, it sets down an important marker for the people of Northern Ireland that we Assembly Members do take an interest in our pensioners.

I recall the clear and definitive remarks made by Alistair Darling when he put his proposals in the Commons in December 1998 for the reform of pensions. These were said to herald the beginning of the most radical pension reform ever. The idea that the young and middle-aged workers would opt out of SERPS (state earnings-related pension scheme) was thought to be essential to maintaining some form of pension strategy. It is evident from the lack of opt-outs that people still prefer the state pension. Mr Darling suggested that companies be given greater powers to force people to get out of SERPS. This did not prove very popular either. He also told us that there would be a new round of means-testing to target the less well off. As we all heard at the recent Labour Party conference, this proved equally repugnant.

In place of these changes it was proposed to set up the stakeholder pension. Most of us consider what we have paid into the National Insurance scheme to be our stakeholder pension. We have witnessed civil government being prepared to let the state pension wither on the vine and then blame those who have pensions for causing the problem, although a growing body of evidence suggests that the problem is being deliberately exaggerated in order to force through some very unpleasant policies.

The ongoing figures in respect of pensioners have produced the expression "pensioner poverty". The long-term outlook is that by 2050 the state pension for pensioners will be £44 less than the minimum income guarantee level. That is hardly a fact to make all future pensioners cheerful, and it is why we need to make things right for our existing pensioners.

When we look at the present state of Northern Ireland’s 220,000 pensioners we see that not only do 10% fall below the poverty line but a further percentage are discounted because they live on the poverty line. At least 20% of pensioners are in poverty; nationally, the figure is over 22%.

Since the removal of SERPS, pensions have decreased, in real terms, by over £30 per week. A recent survey showed that two out of three pensioners have an annual income of less than £6,000 a year. It is little wonder that most pensioners live with constant worry about money and about losing their independence.

In supporting the motion I cite an old slogan, which has never been denied: how we treat the elderly is indicative of the kind of society we are.

Photo of Mr John Kelly Mr John Kelly Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I have to declare an interest because I am on the threshold of joining the old-age pension group and I might have a double-vested interest in this motion.

Going back to the 1950s, ours used to be an idealistic society, but socialism, and the Labour Party, have been decried this morning. One motto at that time was "from the cradle to the grave". Ours was a society that attempted to look after its people from the cradle to the grave. Today one is lucky to get as far as the cradle, never mind the grave. There is no doubt, a LeasCheann Comhairle, that we owe a debt to our older people — a debt that they paid to society in their own way during their lifetime.

Although I imagine that growing old can be very dignified, there can be nothing more undignified than growing old with a sense of insecurity, wonderment or bewilderment about how you will be provided for. It is OK if you are surrounded by your family — your sons or daughters — who will, in difficult times, or perhaps at all times, support your lifestyle or give you some comforts in your old age.

As Mr Attwood said, there is real poverty among old-age pensioners; poverty that we do not see and that is suffered by those who are too proud to come forward and avail of social security benefits. These are people who were reared with an independent mind and means, and who have a degree of pride within them. They suffer in silence and continue wanting and needing, but no one takes up that want or need.

In supporting the motion — I will not quote statistics, for they have already been discussed — I have to say that, while the debate is welcome and that £5 is a notional value, it is totally insufficient. I accept that pensions should be income linked, but many people did not have an income during their lifetime. Many people have no index-related earnings, and we should be looking at the generality of elderly society. That is why the notional idea of £5 is insufficient.

I believe it was last week that Gordon Brown mentioned a figure of £100, which seemed to go off the screen. Even during the Labour Party conference, I do not recall — apart from Barbara Castle’s brave and worthwhile intervention — that the notion of £100 came back onto the table. However, we should look at that kind of sum.

It is not enough to put a figure on old age, saying that if a person is 65 we shall quantify it by giving him £100. But doing so gives us a base from which we can work. It takes up the slack for those whose incomes are not related to earnings or who do not have people around them to support them in their old age. It is unfortunate that there was a degree of negativity from one side of the House, but I suppose that is to be expected. I find it difficult to be negative about any motion which attempts to relieve the hardship of the elderly.

Free transport should be looked at very seriously. Let us take the example of what is happening in the rest of Ireland. We talked about the cost, but if empty buses are travelling round our streets, it costs nothing — or perhaps only a negligible sum — to put people into them. In the Twenty-Six Counties, free travel is not available at peak times, when people commute to and from work in the mornings and evenings. That point should be examined when the barrier of costing is raised.

In conclusion, a LeasCheann Comhairle, I should like to mention a friend who, when discussing the elderly, spoke of "walking slow and going fast". This is true, and we have an obligation and duty to ensure that we are allowed to live out the latter days of our lives in dignity and free from poverty.

The sitting was suspended at 12.28 pm.

On resuming (Mr Deputy Speaker [Mr McClelland] in the Chair) —

Photo of John Dallat John Dallat Social Democratic and Labour Party 2:00 pm, 3rd October 2000

I support the motion, although it stops far short of the overall needs of our senior citizens. It is nevertheless very welcome and provides an opportunity to appeal for a fresh approach to how we treat our pensioners. We must work towards an end to the begging-bowl syndrome, which is unacceptable and unnecessary in the modern society. After a lifetime of contributing to that society through work, bringing up a family and caring for the previous generation, our senior citizens deserve better treatment. If they need financial help, and are brave enough to ask for it, they are bombarded with multi-coloured forms which look more like large novels rather than sincere attempts to establish need.

Many of those now retiring lived through the war, experienced the poverty of the 1950s and helped reconstruct the country in the 1960s, building new roads, ships, houses and working on farms. They brought home minimum wages and had little, or no, protection under employment laws, such as they were. They had no equality legislation, and human rights was only an international issue. They scraped together what they could to educate the next generation, believing that generation would have a better life, proper skills and secure jobs. Many succeeded, but those who failed are not to be condemned.

Money was hard to come by — very hard — and the idea of private pension schemes was beyond the reach of most people. Superannuation was attached only to the best jobs, and certainly not a word in the vocabulary of most working-class people. For many, paying national insurance was a luxury, open only to those in permanent or long-term employment. For others it was work when they could get it, with employers who did not always live up to their responsibility of paying those national insurance contributions. We must not condemn those people to a second round of hard times in what should be the sunset years of their lives. We should not, and must not, allow another round of hardship for the very people who rebuilt this country in the post-war years.

Supporting an across the board increase is fine. However, there is genuine concern that those who do not have private pensions or savings, and have not contributed to superannuation schemes, will cease to be targeted for benefits. That must not happen. It is the job of the Government to ensure equality for its citizens, to target social need and to ensure that all are protected by human rights legislation. No section of our community is more deserving of those ideals than our pensioners, who ploughed the furrows that we now reap.

I speak from personal experience, as do other Members. We must not let our pensioners down. There has been too much dilly-dallying over free transport. Despite the pilot studies and all the promises made by Lord Dubs, latterly by Peter Robinson and more recently by Gregory Campbell, I still do not have a free transport policy in place, which would allow our senior citizens to retain their mobility, stay active and, without doubt, extend their natural life in a healthy way.

Many of the other issues relating to pensioners were dealt with in the debate on local community nursing. That was a very good debate and showed that the Assembly really cares about senior citizens. What a pity there are those who want to pull it down.

Many of the people referred to earlier, who are suffering ill health, might not be in that position had they the proper resources to remain mobile, eat healthily, avail of affordable leisure facilities and continue to feel important and valuable members of society. A society that cannot afford to care for its citizens now in retirement is one that has failed all its people. To neglect yesterday’s working population is to do the same to the present working population tomorrow. As life is short it soon becomes everyone’s turn. It is in all our interest to address this issue now and not perpetuate the inequality of the past. Let us get rid of the notion that, because we are an ageing population, it is somehow permissible to skimp on support for the retired.

On the contrary, the issue is all the more important, not less important. I support this motion, because affording equality to all is one of the underlying principles of this Assembly, and pensioners should most certainly be included.

Photo of Jim Shannon Jim Shannon DUP

I support the motion. Some of the comments made by Members this morning may be slightly at variance, but the thrust of the motion is clear.

Pensioners need help, and that is why this motion has been put forward. If physically the Assembly cannot put any more money into their pockets, it is up to us to at least try to support them. As the cost of living continues to rise the people who are most affected are those of pensionable age. Increases in taxes, cuts in services, increases in retail prices affect us all in one way or another. But these economic developments affect senior citizens even more.

As the cost of living has risen, the true value of the state pension has miserably failed to keep pace. Yet the Government have consistently ignored the resulting plight of those who depend on this income to survive. The announcement by the Chancellor of the Exchequer that he was to give each pensioner an extra 75p a week is laughable when one considers the pressures and hardships endured by many older people throughout the community, and at the recent Labour Party conference this was acknowledged as a faux pas.

A Member referred to Toryism. Whether the Government of the day are Conservatives or conservatives, whether they call themselves New Labour, or whatever, there is an onus on them to do their best. Senior citizens have spent their entire lives working in this community and contributing to its wealth, and it would be true to say that without their collective endeavours, we would not be where we are today. We must acknowledge their efforts: it is their taxes, their sweat, their tears and their blood that have made this country what it is. Senior citizens deserve more than to merely survive on the state pension. They also deserve better representation from elected representatives. Successive Governments at Westminster have seen fit almost to punish senior citizens with legislation. Stripped of their life savings, those who have worked and striven to contribute positively to society are then forced to pay for care. It is about time they got a fair deal from life and a fair deal from the Government.

Another factor which directly affects senior citizens is the price of home-heating oil. It was recently announced that the cost of home-heating oil in Northern Ireland has risen by some 150% over the last two years. This will obviously affect the elderly even more when winter comes. For a number of years the issue of how our pensioners meet the cost of heating their homes over the winter months and during cold periods has been highlighted in both the local and national press. However, the cold-weather payments cannot keep up with and do not take account of such huge rises in the price of oil. This problem must therefore be tackled as a matter of urgency. The cold-weather payment of £150 is a drop in the ocean, when you consider that the cost of oil has risen by 150%. Results which have been published show that the average cost of 900 litres of home-heating oil is now £208, which is a record in Northern Ireland — a record we would rather not have. The reason being stated for this huge jump in the cost is the ongoing price variation of crude oil, which, at the start of last year, cost 10 dollars a barrel, and now costs 32 dollars. The situation is currently so bad that prices seem to be escalating weekly, often by as much as 5%. That will give Members an idea of the impact that this is having on society.

While the rise in the cost of home-heating oil affects all those who have oil-fired central heating, the impact will be most felt by those who have the least amount of financial stability and flexibility, which inevitably includes the elderly. It is estimated that about 600 lives are lost each year due to illness connected with the cold. That should make the severity of the situation hit home, and I have no doubt that the price of fuel was a major contributing factor in the loss of many of those lives. It is therefore logical to assume that further increases in the cost of fuel will inevitably lead to increased financial burdens being put on the elderly. Many people have to decide each week whether to purchase food or fuel, as they do not have the financial wherewithal to do both. They have to decide on a Monday, or on the day they get their pension — usually a Tuesday — whether to buy food or fuel. What a decision to have to make. In a society like ours, proper care should be given to those people who need it most.

There have been discussions about the current opportunities for free travel. Councils have the opportunity to contribute to this scheme, and indeed many have. It is important that all councils realise that this is an opportunity to get involved and to contribute to free travel for senior citizens. The councils that have not yet contributed should do so.

Statistics show that by the year 2020 the over-65s will constitute the majority of our population. It is essential that the Government take action now to cater for that. Older people deserve the right to live life to the full. On reaching the age of 60 or 65 people should not be forced to just survive, or to go through the motions of living. Life should not be over for them; it should be just starting. For many people retirement should be a chance to do things that they have not done before. It is important that society acknowledge that at the age of 60 or 65 people are not finished — life is beginning. Many people of that age and above contribute greatly to society. We must acknowledge that. They should be able to live their lives to the fullest, whether that means becoming involved in education, sport, or community activities.

Where would we be without the senior citizens who make a valuable contribution to society in a voluntary capacity? They help in community groups and organisations, and help younger people in their jobs. Through education, we should give our senior citizens the opportunity to become involved in activities that they may not have had the chance to do when they were working or bringing up families. In our society, people of all ages should be treated with equal respect and attention. We must strive to give senior citizens the same degree of freedom of opportunity as everyone else.

In conclusion, I congratulate groups such as Age Concern — particularly Age Concern — on the work that they have undertaken and the assistance that they provide. Their work is tremendous. That has been acknowledged by many in society and has been welcomed by the recipients of its services. The work they carry out is invaluable and their efforts should be recognised. I support the motion.

Photo of Mr Maurice Morrow Mr Maurice Morrow DUP

I have listened with interest to the contributions from around the House. There seems to be some confusion as to the role that we play here. In my opening submission, I hope to clarify that.

I appreciate the strength of feeling on this issue. We all want the best for pensioners, and we want to ensure that every pensioner has a decent income in retirement. Nobody will disagree with that. Social security and pensions are transferred matters and fall within the competence of this Assembly. Northern Ireland has its own body of social security and pension law. Indeed, yesterday the Child Support, Pensions and Social Security Bill had its First Stage. However, this is underpinned by the long-standing policy of parity between Great Britain and Northern Ireland in such matters.

This long-established policy is based on the principle that since people in Northern Ireland pay the same rates of taxation and national insurance contributions as people in the rest of the United Kingdom, we have access to the same range of benefits, paid at the same rates and subject to the same rules and conditions. Parity has served Northern Ireland well. For example, contributory benefits such as retirement pensions are funded from national insurance contributions. The amount raised through these contributions in Northern Ireland has for many years been insufficient to meet the cost of those benefits. The Northern Ireland national insurance fund is topped up with a transfer from the Great Britain fund.

Similarly, non-contributory and income-related benefits are financed from taxation revenue. Expenditure is demand-led and is outside the managed block.

Under section 87 of the Northern Ireland Act 1998, the Secretary of State for Social Security and I are under a duty to consult one another with a view to maintaining, to the extent agreed by us, single systems of social security, pensions and child support for the whole of the United Kingdom.

Since 1980, state pensions have been uprated in line with the annual rate of inflation. The Secretary of State for Social Security has a statutory duty to review the rate of pensions annually to determine whether they have retained their value in relation to the general level of prices, represented by the increase in the retail price index (RPI) at the end of September. The Secretary of State is then required to lay an Order before Parliament to increase pensions by at least the percentage increase in the RPI. Whenever the Secretary of State makes an uprating Order, my Department is empowered under section 132 of the Social Security Administration (Northern Ireland) Act 1992 to make a corresponding Order for Northern Ireland. Current legislation does not allow my department to pay different rates of pension.

The rate of inflation in September 1999 was 1·1%. That resulted in the 75p increase from last April that Members have identified as a source of great disquiet. I fully appreciate that to many people 75p seems a paltry sum. However, we must remember that although in previous years the increase was higher, that was due to the higher rate of inflation. The purchasing power of the increase was the same.

While the basic state pension is the foundation of retirement income, it cannot, and was never intended to, provide everyone with a decent income in retirement. In some ways, increasing the basic state pension is not an effective way of targeting resources on those who need help. Over the last 20 years the incomes of the richest fifth of pensioners have risen by 80%, while those of the poorest fifth grew by only 30%. The proportion of pensioners with incomes below 40% of average income rose fivefold. Simply increasing the state pension would not necessarily help those who need it most. The poorest pensioners would lose it, pound for pound, from their income support.

In recent years the priority has been to tackle poverty among pensioners and respond to the growing inequality between the poorest and the richest. The minimum income guarantee (MIG), payable through income support, is designed to tackle the problem of pensioner poverty. Under this guarantee, no pensioner has to get by on a weekly income of less than £78·45 for single pensioners or £121·95 for pensioner couples. No pensioner should have to survive on the basic pension alone. The minimum income guaranteed will be increased to £90 per week from April next year. Also from next April, the amount of savings that a pensioner can have without affecting the guaranteed payment will be increased from £3,000 to £6,000. The upper savings limit at which there is no entitlement to MIG will increase from £8,000 to £12,000. These changes are designed to tackle the problem of pensioner poverty head on.

The introduction of the minimum income guarantee has been backed up by the launch of a take-up campaign to try and ensure that help gets to those who need it most. The new tele-claims service means that pensioners can claim over the phone. The early indications are that many more pensioners are now receiving extra help as a direct result of this campaign.

The result of the minimum income guarantee is that the poorest pensioners are now, on average, £8 per week better off, over and above inflation, than they were in 1997. While the priority, quite rightly, has been to tackle the problem of pensioner poverty — and I am sure that Members would agree that that has to be our number one priority — the concerns of the wider pensioner community have been, and continue to be, addressed.

A series of measures aimed at helping pensioners in general has been introduced. This includes the reintroduction of free eye tests, the introduction of winter fuel payments, and the introduction of free television licences from November for people aged over 75. I recently confirmed that the winter fuel payment is to be increased from £100 to £150 this winter. The payments will start to be made next month. Pensioners have also benefited from the reduction of VAT on fuel and the more generous income tax allowances — both of which are matters beyond the competence of the Assembly.

There are still problems that need to be addressed. For example, we have the problem of pensioners who have a modest occupational pension, or savings, that puts them beyond the limits of income-related benefits. Many of those pensioners feel — and I have sympathy with their view — that they are being penalised for being prudent during their working lives, when they paid into a pension scheme or put money aside for their old age.

It is important that people are allowed to benefit from having been prudent during their working lives and for them to share in the rising prosperity of the nation. We have already moved to improve the situation by doubling the lower capital limit and by increasing the upper capital limit to £12,000 from next April. This allows pensioners with savings of up to £12,000 to benefit from the minimum income guarantee. That is only a first step.

Work is under way to develop the new pension credit. The new pension credit will ensure that not only do we remove the penalty for savings but that we actually reward savings. The proposal is to abolish the capital limits and to instead take into account the income received from savings. For every pound saved, the person receiving the pension credit will get a cash addition. I hope to publish detailed plans for consultation on a new pension credit later in the autumn.

While many pensioners currently enjoy the benefits of second pensions, whether from the state earnings-related pension scheme or from occupational or personal pension schemes, we want to ensure that as many people as possible can build up a decent second-tier pension by the time that they retire. The new stakeholder pensions to be available from next April will offer the option of a safe, flexible low-cost way to save for a pension for those people who do not have access to an occupational pension or for whom a personal pension is not a cost-effective option. They will also allow those who cease work to continue to pay contributions or to take a break from paying contributions without incurring any financial penalty.

While the state earnings-related pension scheme has served many people well, it is solely earnings-related and so gives least help to those with the lowest earnings and who need help the most. It also gives no help to carers or to disabled people.

The Child Support, Pensions and Social Security Bill, which is currently before the House, contains provisions to reform the state earnings-related pension scheme and to have a more generous state second pension to give more security in retirement to low and moderate earners and to carers and disabled people with broken work records.

It will significantly increase the additional pensions of low earners. For example, a person earning £120 a week will get £40 more from the state second pension than they would have got from the state earnings-related pension scheme. Many carers and disabled people will get a second pension for the first time. The review to determine the rate of increase for next year’s pension is currently under way, and the rate of basic pension from next April will be announced as part of the pre-Budget report.

I understand Members’ feelings on restoring the earnings link. However, it may be helpful if I explain the background to the current method of operating. Successive Governments, both Conservative and Labour, have resisted calls for the restoration of the earnings link. This is not purely on the grounds of the cost of restoring the link. In UK terms, £6·5 billion extra is being spent on pensioners over the course of this Parliament. That is £2·5 billion more than would have been spent on restoring the earnings link.

Half of this £6·5 billion is going to the poorest third of pensioners — those most in need of help. There are problems with restoring the earnings link. First, it does not target resources where they are most needed, and secondly, there is the long-term sustainability of funding in the light of projected demographic changes. By 2010 the cost of earnings link in the United Kingdom would rise to £7·5 billion per annum, and by 2040, it is estimated, there will be 43% more people over pension age than there are now.

There are also wider implications. It will result, for example, in increased health and service costs, all of which will have to be met by a falling pensioner support ratio. That is the number of people of working age compared with the number of people of pension age. This problem, no matter how unpalatable, can not be ignored.

I appreciate the depth of Members’ feeling on this issue. However, there are those who would say that it is easy to call for increased pensions if you do not have to pick up the bill. As I said, social security and pensions are transferred matters, and if the House feels sufficiently strongly about this issue, and I emphasise this point, it is free to consider providing for a different increase for Northern Ireland pensioners. This would require an amendment to the existing law, and I would be under a statutory duty to consult with the Secretary of State for Social Security before such a change.

More importantly, in such a scenario the additional costs would have to be borne out of the Northern Ireland block. Preliminary estimates suggest that the net benefit costs of a £5 per week increase would cost £40 million. The Department for Social Development would also have to fund the associated administrative costs as it does not have any computer infrastructure to allow it to pay a separate Northern Ireland-only increase. But from where in the Northern Ireland block would we find the necessary £40 million? That is the stark reality, the big question, that we face. I did not hear anyone address that point.

We want to do all that we can to help older people, and I have set out the context of current pensions policy and outlined the legal framework within which the underpinning policy of parity operates. I am sure that Members will agree that the costs, not to mention the implications, of breaking parity would be considerable and not a step to take lightly.

I have outlined the short-term efforts to help poor pensioners and the longer-term steps being taken to ensure that future pensioners retire with a decent second pension. However, if it is the will of the House, I am very happy to make representations to the Secretary of State for Social Security.

I will now deal with some of the points raised by Members. I have no problem with Mr McCarthy’s motion that is before the House today. It might be a little unreal, but sometimes we have to go through that sort of a world. The issue of free transport for pensioners is not a social security matter, as I am sure he would acknowledge. It is being dealt with by the Department for Regional Development.

Joan Carson said that she wants those with most savings to be protected. I am sorry that she is not present to hear my answer, but that matter will be covered by the pensioners’ credit proposal. She also said that the Assembly has no power to deal with the £5 change.

It may come as a surprise to some Members, but the Assembly could change things if it wanted to do so. However, it would need to be fully aware of the costs if it were to go down that particular road. To pay the additional £5 mentioned in the motion would cost approximately £40 million. The administrative costs and those for the change in the computerisation infrastructure would also have to be met. I look forward to other Ministers saying that they will give up £40 million or £50 million so that we can do that. Some people are saying that it is Gordon Brown’s problem. If the Assembly wants to make a change in people’s lives it can do so — but it will cost money. If we go down that particular road we would be departing from parity and I would be under an obligation to take the matter up directly with the London Minister.

Ms Lewsley referred to 75p as being an insufficient proposed increase. That was last year’s figure — and I want to put that on record.

Mr Murphy talked about pensioner benefits in the Republic of Ireland. To put it a bit more succinctly, what was being asked was how do social security benefits in Northern Ireland compare with those in the Republic of Ireland. A broadly similar range of benefits is offered in the Republic, however, it is difficult to make comparisons. We must take into account the exchange rate and its variations. It is also important to compare how the benefits are funded, for example, the differing taxation levels. Many of the benefits such as free electricity, telephone and gas allowances and free public transport are not generally regarded as social security benefits and would not be funded by the social security system.

I was asked if the Department has undertaken any work to compare the social security systems in Northern Ireland with the Republic of Ireland? A comparison of benefits was carried out in the late 1980s. Benefits are, by their nature, complex and in many instances they are tailored to meet individual needs. General comparisons are therefore difficult to make and may not be helpful. Some of the help given to specific groups such as free or reduced transport may not fall into the traditional definition of social security.

Ms McWilliams raised the issue of 15,000 people not claiming income support. The take-up campaign is under way and to date 5,000 claim forms have been issued, 4,000 have been returned and 2,000 people are now getting the minimum income guarantee, MIG.

The retirement pension scheme is not one in which people build up a fund. It is a pay-as-you-go scheme and what was paid in last week has been spent this week. Regarding the Member’s suggestion of an inter-departmental Committee that would be a matter for the Assembly.

Rev Robert Coulter said that those paying into private pension schemes are being penalised. Most members of private pension schemes have their contributions enhanced by national insurance rebates and tax incentives throughout their membership of the national insurance scheme. Pension credits will also help these people. The retirement projection cost for the year 2000-2001 is £885·7 million. For 2001-02 the projected figure is £929·4 million.

I trust that I have covered all the points, but if, after reading Hansard, any should come to light that I feel have not adequately been dealt with, I will certainly take them up further in writing.

Photo of Eileen Bell Eileen Bell Alliance 2:30 pm, 3rd October 2000

My Colleague and I have been very impressed by the speeches, and I thank Members for their support. This may be a reserve matter to a certain extent but that should not stop us debating the issue here, and let Hansard declare our concern and support. As the Minister pointed out, we do have some mechanism to make that more than just a vocal concern of support.

The confidence in this issue is reflected in the consensus and in the content of the speeches. It is said that a sign of good government is that the young and the elderly are treated properly, fully and effectively — from the cradle to the grave. I have to say that the elderly of our society have a lot to be concerned about. They have been ignored for years. Health and benefits have been inadequate and recently, people have felt it necessary to come together all over the United Kingdom and bring their concerns to the attention of the Government of the day, and even more recently to the attention of this Assembly.

Perhaps Ms McWilliam’s idea is not actually "pie in the sky". Nobody said that anything we deal with will be easy. The fact that we would have to break parity should not entirely knock us of the idea. We should consider the idea of an inter-parliamentary committee to be overseen by the junior Ministers. As the Minister rightly said, that is something for the Assembly to consider. We should not let the idea that we are breaking parity put us off.

Photo of John Taylor John Taylor UUP

Can the Member confirm whether she supports the principle of parity?

Photo of Eileen Bell Eileen Bell Alliance

I do support the principle of parity, but, like any rule, it can be looked at to see if it can be amended in any way.

This Assembly is about responsibility and accountability to the people of Northern Ireland, and we must be seen to be doing that, difficult though it may be. Pensions, like other benefits, are extremely complex — as was outlined in several speeches — and very difficult for the average senior citizen to understand. Anyone who has been in the citizens advice bureaux, or any other voluntary area, would tell you that that is an everyday happening.

Our first concern should be to draw up a clearer and more structured application system for pensions. Why is the rate of pension not sufficient of itself, and why should people have the additional stress of applying for other benefits to bring their income up to an adequate level? The Minister said that retirement pension was never designed to be a one and only pension, but I really do think that we need to look at that issue.

I also know that the present Labour Government have refused to link pensions to wages, saying that it would not improve the lot of the poorer pensioners. That may be right, but the transitional moves that Gordon Brown announced last week at his conference to increase the overall level of pensions has started with the princely sum of 75p last year. Incidentally, I must express disappointment for, as far as I know, there was no Northern Ireland MP in the House of Commons who opposed that increase.

Last year, Gordon Brown promised to raise the basic state pension dramatically next April, and again in 2002. Can we believe him, or do we take it with a cynical pinch of salt, remembering that next year could be an election year?

I am concerned that this transitional arrangement will again involve cash credit schemes that people have talked about, and the income guarantee. They are again going to add to the complexity of the application system. I must also tell Members that our Westminster colleagues from all parties are still getting massive mailbags containing loads of queries and fears from elderly people in spite of Government promises. As was stated in ‘The Guardian’, they have conceded the cash — well, hopefully they have — but they have not conceded the principle of linkage.

In recent years, people such as Jack Jones and organisations such as Age Concern and Help the Aged have brought the issue of proper treatment of our elderly citizens to the attention of the Government; the Member for Lagan Valley (Ms Lewsley) said last week, they have no better supporter than Barbara Castle. At last, politicians are realising that there are votes to be gained from this large section of the electorate. I hope that they will remember the contribution made by those people over the years when they consider pension entitlement.

I know that the Minister has dealt efficiently with several comments that were made. I would like to make a comment about free transport, because we are not just talking about income we are talking about quality of life. As it is local authorities have problems with their budgets. They give as much as they can, within their remit, to their borough or area, and the Government are passing the buck by saying that local authorities should pay part of the cost. We will find ample opportunity to help our senior citizens and we will ask the Minister for Regional Development to do the same.

I want to reaffirm Rev Robert Coulter’s statement that pensioners are looking for dignity, not handouts. The Minister referred to take-up rates. One of my first jobs — it was over 20 years ago — was something similar to the take-up campaign. I hope that the people involved do not come across the level of ignorance that I found among people sitting in their homes, not realising that they could claim, regardless of all the television coverage.

Ms Lewsley and Mr Attwood mentioned the minimum income guarantee and said that that would benefit low income family budgets. I hope that it does, but I must stress again my concern about the complexity of the whole thing.

The Minister’s comments were formal and objective, and rightly so, but one of the main reasons that we are having this debate is that people are still living on or below the poverty line. That is the real fact, and it does not matter how wonderful the Government’s ideas for the next year are. People need a basic rate of retirement pension that will keep them going, and that is not happening. That is why we are having this debate.

I would like the Minister to say whether the take-up campaign has started in Northern Ireland. If it has, what numbers will we get? Only then will we know that the people in Northern Ireland are getting their full entitlement.

As Mr McCarthy said, the message from the Assembly is that we will not fudge the issue. We will support the people who have already made their contribution to society. We have a duty to support them, and we will fight on this issue. It may be a reserved matter, but we must try to influence the Government however we can through the Committees. It is not just a question of liking income and pension; it is about the quality of life that we want to uphold. That should be the right of senior citizens. As Mr Attwood said, it is a multi-layered scheme and a multi-layered issue. We must start today by loudly proclaiming our support and working towards a better pension and a better situation for all of us, including the future pensioners.

Question put and agreed to.

Resolved:

That this Assembly calls for an immediate increase from the Chancellor of the Exchequer’s package of £5 per week in retirement pensions and for restoration of the index-linking of pensions to earnings.