Pensioners (York)

– in Westminster Hall at 10:59 am on 23rd March 2005.

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Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation 10:59 am, 23rd March 2005

Every year, the Labour Government introduce new measures to improve the welfare and the standard of living of pensioners. In the Budget last week, the Chancellor made two announcements that are particularly important to pensioners: first, the introduction of a national scheme of free local bus travel and, secondly, the introduction of a £200 payment to reduce the effect on pensioners of council tax increases. Both new initiatives will be widely welcomed by pensioners in York.

The free bus pass is a great deal better than the £40-worth of travel tokens currently available from City of York council—reduced from £50 last year by the Liberal Democrat-led council. The Government's £200 payment towards council tax is worth an additional £2 a week to York pensioners and is a considerable improvement on last year's £100 payment. It is badly needed in York, because City of York council increased council tax by twice the rate of inflation this year. It was one of the largest council tax increases in the country and it should not have happened: the Government increased the city council's grant by more than twice the rate of inflation, so there was no need for a large tax rise to be passed on to local people.

The Chancellor's initiatives are good moves by a Labour Government, but I want the Government to go further and to do more to help poorer pensioners to claim their entitlements to extra money from pension credit and council tax benefit. Angela Barham, the information officer and benefits adviser at Age Concern York, says that council tax benefit has a poorer take-up rate among York pensioners than any other benefit. I have a proposal for the Government that could, at minimal cost, do a great deal to increase take-up of council tax benefit. I suggest that when the council writes to pensioners in York to distribute the Government's free bus passes, it should also circulate claims information and claim forms for council tax benefit and pension credit. In addition, I should like the Minister to consider the feasibility of creating a single claim form or claim line for those benefits to make it simpler for pensioners to claim them.

On 12 January, I put my name to the Council Tax Benefit (Entitlement Information) Bill, a private Member's Bill to change the law to require each local council to write to every pensioner in its area or to undertake door-to-door visits to all pensioners, or both, to inform them that they might be entitled to council tax benefit. The Bill was due to have its Second Reading on 4 February, but was unfortunately blocked by hon. Members who opposed it. I propose that the Government take up the idea behind the Bill and implement it in relation to council tax benefit and pension credit to promote take-up of the benefits. The information officer at Age Concern York said that the Government's take-up campaign on pension credit had been highly successful, but some people who are entitled to it are still not claiming it, and even more do not claim council tax benefit to which they are entitled.

Let me explain why it is important to do more to help poorer pensioners. Unlike Margaret Thatcher, I believe that there is such a thing as society. Society imposes on its stronger and wealthier members the obligation to support those who are more vulnerable than they are. Of all the vulnerable people, those who most need support are elderly people on low incomes. Unlike younger people, the elderly do not have the opportunity to work and save, they are likely to be on a fixed income that does not rise at a pace with earnings or with the rise in living standards, and their savings—if they have any—diminish with the passage of time.

I have always argued that the Government should treat pensioners as a priority. I spoke about the needs of the elderly when I first spoke in this House, in my maiden speech 13 years ago. If we think back to that time, when the Conservatives were in power, we are reminded how much better off pensioners are today, under a Labour Government. The Conservatives broke the earnings link for the basic state pension, abolished free NHS eye tests, and dismantled the state earnings-related pension scheme. They mis-sold pensions, encouraging many people to opt out of viable and successful final salary pension schemes and instead to put their money into personal pension plans, which have yielded nothing like the benefits of the pension schemes that they were in originally.

The Conservatives took pension rights away from employees when they privatised companies. Think of the bus employees superannuation trust scheme—the bus pensions scheme: bus workers who had spent a lifetime paying into a pension scheme suddenly found that the pension would not be paid on their retirement. It took a Labour Government to restore their pension rights. The Conservatives tried to do the same with the railway pension schemes when they privatised British Rail, but I introduced amendments to the legislation that eventually made them back off.

In the whole of their 18 years in office, the Conservatives raised the basic state pension by more than inflation only once. They did so to compensate in part for their introduction of value added tax on fuel. That sums up their approach. The Leader of the Opposition, Mr. Howard, who was a leading member of the Cabinet in those days, recently wrote in an introduction to the Conservative party's pensioners' manifesto:

"How a country treats the older generation is a test of its values."

It is indeed, and one need only look back at the Conservatives' record in office to see their values in practice and to realise that they do not value the welfare of pensioners.

One might compare the Conservatives' record with Labour's. A great deal has changed. First, we have provided above-inflation increases to the basic state pension. When Labour came to office, the basic state pension for a single pensioner was £61.15 a week; it is now £79.60 a week—£5.45 a week more than the rate of inflation increase. For a couple, the pension has gone up from £97.75 to £127.25—£8.75 more than the rate of inflation increase. I remember when pensioner campaigners led by Jack Jones demanded a £5 and £8 increase in the basic state pension. That, and more besides, has been provided by the Labour Government. Those increases are received by 17,520 pensioners in my constituency.

Secondly, the Labour Government have brought in winter fuel payments—originally £50, then £100, then £200, or £300 for older pensioners. Under the Conservatives, there was a winter fuel payment, but pensioners had to wait until there were seven consecutive days of below-freezing temperatures, which practically never occurred. When it did, pensioners got about £1 a day for the cold period—but by that time pensioners had turned down the heating. They did not know whether the cold spell would last four, five, six or seven days, so when the payment came through, paltry though it was, it was too late. In York this year, 19,755 pensioners received their winter fuel payments.

Thirdly, the Government have introduced free television licences for the over-75s. Some 6,525 households in York are entitled to free licences. Fourthly, the Government introduced the minimum income guarantee to raise, as a right, the income of poorer pensioners to a satisfactory level. However, that provoked complaints—with some justification, I have to say—from people who during their working life had saved or paid into a private pension scheme and who found that because they had been prudent they did not receive the minimum income guarantee. The Labour party listened to what they said and, fifthly, introduced the pension credit as a supplement to the minimum income guarantee, to extend the benefits of that guarantee to people with modest savings or smaller private pensions. Some 4,265 people in York now receive pension credit; on average, they receive £36 a week on top of the basic state pension. Then, sixthly, the Government decided to uprate the value of the pension credit in line with earnings, not prices, which is the normal uprating for benefits. In that way, the basic minimum standards that the Government have introduced for pensioners will keep pace with the growing increase in living standards in the country as a whole.

Seventhly, last year the Government introduced a £100 payment towards the cost of council tax for pensioners. Now, of course, that has been increased to £200. No one should be fooled by the Conservative promise to make payments of "up to £500" towards council tax. People should read the small print: up to £500 does not mean £500, and for many pensioners, it would mean much less than the guaranteed payment that they will get from the Labour Government. The truth behind the small print of the Conservatives' promise is that they will give bigger payments to better-off pensioners living in larger houses. Furthermore, of concern to me and to the Minister, who also represents a constituency in the north of England, is the fact that under the Conservative proposal bigger payments would be made to pensioners in London and the south-east than to poorer pensioners in the north. That is wrong; it shows that the Conservatives are unreformed and up to their old games on pensions.

Eighthly, the Labour Government restored free eye tests on the NHS for pensioners who need them—free eye tests were, of course, taken away by the Conservatives. Some 26,300 pensioners in my constituency and the surrounding area had free eye tests on the NHS last year. Ninthly, the Labour Government introduced health checks by their general practitioners for all pensioners. Tenthly, they introduced a regime of free flu injections: 75.3 per cent. of people aged over 65 in York have had their free flu injections this winter, one of the highest take-up rates in the country. Eleventhly, the Labour Government removed charges for nursing care in care homes. Twelfthly, we introduced a national half-price travel scheme some years ago to ensure that pensioners in all parts of the country had the benefit of a travel concession. Finally, in his Budget this year, the Chancellor has announced that it will become a free local bus travel scheme.

So, there are dozen benefits—or a baker's dozen of benefits—that the Labour party has brought to pensioners in my constituency and throughout the country. We have changed the incomes and quality of life of pensioners in York. In the past, old age was always closely associated with poverty. If we look at the Seebohm Rowntree surveys of poverty in York 100 years ago, in the 1930s and in the 1950s, we see a strong correlation between age and poverty. The group most likely to be living in poverty was the elderly. Pensioners had to choose between heating and eating, but that is no longer the case. A recent report by the Institute for Fiscal Studies shows that, for the first time in Britain's history, pensioners are now no more likely to be living in poverty than other age groups. That is not an argument for the Government to change the priority that they give to pensioners; still less is it an argument for this country to change the Government, because the Conservatives are the only possible alternative. Instead, it is an argument for maintaining the focus and priority on working to improve the security and welfare of pensioners.

There are still poor pensioners who do not claim their entitlements, which is why I am proposing new measures to boost the take-up of council tax benefit and pension credit. That is also why I back the Secretary of State for Work and Pensions in his continued support for radical pension reform. He is right to identify that the poorest pensioners are women. In the 21st century, it is a scandal that, on average, single women pensioners have an income of £24 a week less than men, and that only 16 per cent. of women now retiring have a full basic state pension in their own right. It cannot be right in this day and age that the welfare of women pensioners depends on the work record of their husband. That problem must be tackled and I congratulate the Secretary of State on saying that the Government will tackle it.

The second big problem for the future, which I want the Government to consider, is that of private pension schemes going bust. The Government rightly have a responsibility to help those who face that terrible problem—people who have paid into a pension scheme throughout their working life, but find that the promised pension is no longer available. I congratulate the Government on establishing the financial assistance scheme to help some of the pensioners in that position, which they have decided to base in the city of York, at Monks Cross.

I urge the Government to continue to seek ways to maintain defined-benefit pension schemes— final salary schemes, in common parlance. I asked my hon. Friend the Minister for Pensions about the proportions of employees in defined-benefit schemes. Since the Labour Government came to power, the proportion of public sector employees in such schemes has increased by 5 per cent.; at the same time, the proportion of private sector employees in defined-benefit schemes has declined by 5 per cent. That has happened against a background of private employers trying to pull back from their obligations to their employees in retirement. I am pleased that the Government have not only sought to maintain defined-benefit schemes for people employed in the public sector, but have increased the number of people in such schemes.

The public sector schemes will need further reform, however, if we are to maintain the principle of the defined benefit—of final salary or the best of a number of years' salary being the basis for the pension. I wish the Government as a whole well. The Department for Work and Pensions is not the only Ministry involved—Education Ministers are responsible for education schemes, and so on. I wish all the Departments well in their work to reform their schemes and to maintain them as viable final salary or defined-benefit schemes, because it is important for employees who have worked for the Government or a public agency in the expectation that they will receive a pension based on their salary, and it sends an important signal to the private sector.

Unless we as a nation start saving more than we have saved hitherto during our working lives to support ourselves in ever-lengthening retirements—fortunately, we are all living longer—we will not escape the problem that the Labour Government faced when they first came to power of large numbers of pensioners living in poverty. We need both to tackle the immediate problems of people who are already retired on low pensions and to reform pension schemes so that in future people retire with a reasonable retirement income.

Photo of Maria Eagle Maria Eagle The Parliamentary Under-Secretary of State for Work and Pensions 11:19 am, 23rd March 2005

I congratulate my hon. Friend Hugh Bayley on his good fortune in securing the debate and on how he set out his concerns and ideas. He is well known in the House for his interest in the welfare and well-being of pensioners, not only those in his constituency—it is natural that he takes an interest in them—but pensioners throughout the country. As one of my hon. Friend's successors as a Minister in the Department for Work and Pensions, I know what an excellent and assiduous job he did to look after pensioners' interests, so I was not surprised that he chose this subject for the debate, but I was impressed by how he advanced his arguments.

As a fellow northern MP whose local city council is controlled by the Liberal Democrats, it strikes me that Liberal Democrats seem to be pretty much the same wherever they are. When they get the chance to do so, they do not always deliver what they promised. My hon. Friend's example of his Liberal Democrat council cutting the value of travel vouchers contrasts starkly with the Chancellor's approach of introducing free travel across the entire country. That is the difference between Labour delivering on its promises and the Liberal Democrats saying anything to get elected and then doing appalling things when they get control.

I welcome the chance to take forward some of the ideas that my hon. Friend has raised. He will remember that a Minister's ears immediately prick up when we hear of a proposal that can be realised at minimal cost. His idea of including letters about free bus passes and claim forms for council tax benefit and pension credit with other literature that has to be sent to individual groups in society—in this case, pensioners—has got to be worth looking into.

As my hon. Friend knows, the Government, more than any before them, are committed to reaching out to all those who may be entitled to a range of benefits and services to try to ensure that they get them. We have an extensive ongoing strategy to encourage all those who may be entitled to help with their council tax to apply for council tax benefit, particularly pensioners, who, as my hon. Friend made clear, are the group most likely to be missing out. That is why we launched a campaign in the lead-up to last year's council tax billing round to ensure that procedures were in place locally to encourage people to apply. In addition, we have issued new versions of the posters and flyers called "Cut your Council Tax—Find out if you should be paying less", which should engage the interest of people who perhaps would like to pay less. We have already sent out the council tax benefit flyer with the winter fuel payment letters to around 12 million people in around 8 million households, many of whom will be in my hon. Friend's constituency. Council tax benefit already makes a valuable contribution in providing financial security for nearly 5 million households responsible for paying council tax, but we remain concerned about those who are not taking up their entitlement and we recognise that we need to do more.

The latest available figures are somewhat out of date—they are from 2002–03 and therefore pre-date the introduction of pension credit and the big take-up campaigns that followed. We hope that there will be significant improvements in the next few years. It is estimated that up to 2.4 million people, up to 1.8 million of whom may be pensioners, are missing out on council tax benefit. There is clearly a lot of work for us to do to ensure that the people who have an entitlement to that additional assistance get it. We must also ensure that they are able to get it in the simplest and easiest way, without having to jump through too many hoops.

Encouraging people to take up their entitlement to benefits such as council tax benefit is very much at the heart of our agenda. We have learnt a lot about how to do that through the pension credit take-up campaigns and the work of the Pension Service local service. I was most encouraged to hear the comment from my hon. Friend's local Age Concern branch about the effectiveness of the campaign in his area. One often hears when things go wrong; it is nice to hear when things are going well and to receive a little bit of praise. I hope that he will convey our appreciation to Age Concern York.

In recognition of the recent high levels of council tax in some authorities and their likely impact on those on fixed incomes—I have taken on board the points that my hon. Friend made about fixed incomes often implying poverty in particular age groups—we are making a one-off payment of £200 to each eligible household containing someone aged 65 or over. That is a significant amount of money, which will make a big difference to those in receipt of it. However, we also know that the oldest and poorest pensioners are likely to be disproportionately affected by the rise in cost-of-living expenses. To help with those additional costs, we are making a further one-off payment of £50 to those households containing someone aged 70 or over in receipt of pension credit guarantee.

The free off-peak travel will be tremendously popular among those who receive it for the first time, particularly if they have had to put up with using vouchers in the past—vouchers are inevitably a form of rationing travel rather than encouraging it, because vouchers of a fixed value always run out. That will be a valuable improvement in pensioners' opportunities to travel and get around. It is important that they can do that and not be stuck at home. I hope that when local authorities contact pensioners about the concession they will use the opportunity to promote council tax benefit and other benefits. I would be happy to have further discussions with my hon. Friend about how we might ensure that that happens.

I should like to say a little about progress on our Link-Age strategy, which is an attempt to join up services and provisions for pensioners, ensuring that pensioners are assisted more holistically across Departments and local authorities. The strategy aims to remove duplication and ensure that our older citizens receive not only their cash entitlements, but the vital services that so often determine an individual's quality of life. The scheme is good news, because it means that more people with an entitlement to pension credit and council tax benefit, as well as other benefits and services, receive assistance.

There is an example from my hon. Friend's constituency that might interest him. A pensioner living in his constituency received a visit from a local Pension Service representative and was found to be entitled to pension credit of an extra £51.32 a week. He received a backdated payment of £2,800, which he had not expected. I am sure that that came in handy. That pensioner was a chap who did not think that he might be entitled to any extra help. In that way, the local service, the joint teams and Link-Age can help to get to people who just assume that the extra help available that they hear about is not really for them.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

My hon. Friend was kind enough to ask me to pass on thanks to Age Concern York. I would also like to thank the Pension Service staff in York, who have spearheaded the campaign and achieved good results by working with local agencies such as Age Concern. There really is a partnership and it works.

Photo of Maria Eagle Maria Eagle The Parliamentary Under-Secretary of State for Work and Pensions

I am happy to hear that from my hon. Friend and hope that he will pass on those remarks to the local service, because it is nice to hear praise. It should be passed to the people who deserve to hear it.

On the wider front, the local service continues to work with partners such as primary care trusts, Age Concern York, Older Citizens Advocacy York and the energy efficiency unit, in bringing together the different types of assistance available to make a real difference to people's lives. Those organisations have arranged a series of joint events, one of which my hon. Friend may recall attending in September last year. I am sure that he found it worth while—I have not heard that he did not—and he might be interested to know that it generated 117 pension credit applications.

My hon. Friend gave a figure for the number of people receiving pension credit in his constituency, but the figure that he quoted was the number of households. The actual figure is 5,141 individuals. His figure was lower, because in some households there are two pensioners rather than one.

Such initiatives are important in ensuring that all our pensioners can receive the assistance that we want them to have, so that they can live their lives with dignity, without having to worry about poverty in their old age.

Sitting suspended until Two o'clock.