House of Commons Hansard Debates for 4 Mar 1991

Hansard

Monday 4 March 1991

The House met at half-past Two o'clock

PRAYERS

[ Mr. Speaker-- in the Chair ]

Oral Answers to Questions

SOCIAL SECURITY

Pensioners

1. Mr. Dover : To ask the Secretary of State for Social Security what proportion of pensioners own their own homes.

4. Mr. Robert Banks : To ask the Secretary of State for Social Security what proportion of pensioners own their own homes.

The Secretary of State for Social Security (Mr. Tony Newton) : The latest information shows that, in 1987, 49 per cent. of pensioners owned their own homes ; 45 per cent. owned their homes outright.

Mr. Dover : Does my right hon. Friend agree that pensioners have become better off in the years of Conservative government? Will he confirm that, by 1989, 85 per cent. of them had telephones, 71 per cent. had washing machines and 62 per cent. had their own cars?

Mr. Newton : Indeed, all the evidence suggests that pensioners have been becoming considerably better off in general--although, obviously, with exceptions, to whom we have tried to give additional help through the income support rate. The increases in durable ownership are very

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striking, as my hon. Friend pointed out, especially in the number of those owning telephones, which has risen from just under half the total to over 85 per cent.

Mr. Robert Banks : Does my right hon. Friend agree that aspiring to home ownership is a basic human instinct and that the Government have made remarkable progress in satisfying that desire? Will he take positive steps to encourage banks and building societies to make incomes and payments available to pensioners on the basis of the asset value of the homes that they occupy, once the mortgages have been repaid?

Mr. Newton : I think that my hon. Friend is referring to a type of scheme which, as he knows, has been advanced with some success in recent years. I have certainly noted his suggestion and I am sure that it will be noted outside the House, too.

Mr. Winnick : I have been informed in a parliamentary answer that two thirds of pensioners have annual incomes of less than £5,000. What justification can there be for requiring those who either own their homes or rent accommodation to pay the poll tax--a tax which is levied on them in the same way and, even more important, in equal amounts as it is levied on multi-millionaires? Is not it very odd for some Conservative Members to be so determined to retain a tax which penalises pensioners, as it penalises so many others in the community?

Mr. Newton : I fear that the hon. Gentleman is once again engaging in extravagant generalisations while completely ignoring the fact that, because the calculation of community charge benefit is based on income support rates as a threshold, and because those rates are, owing to the premiums, higher for pensioners than for most other groups in the population, pensioners receive considerable help with their community charge payments.

Mr. Kirkwood : Does the Secretary of State accept that, although pensioners can own their own homes, it does not necessarily mean that they are wealthy? Of course, the increase in pensioners' average income is welcome, but

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have not the Government a duty to do more and yet more for those who must rely on nothing more than the state pension?

Mr. Newton : As the hon. Gentleman knows, very few pensioners have only the state pension to live on, unless they are living in someone else's household. If they are renting accommodation, as many will be, they will receive substantial assistance through housing benefit ; if they have only the state retirement pension, they are in any case likely to be in receipt of income support. The hon. Gentleman must not overplay his hand. We have been directing additional help to the least well-off pensioners--those on income support.

Benefits Agency

2. Mr. Waller : To ask the Secretary of State for Social Security what changes there will be in the service provided to claimants when the Benefits Agency comes into operation later this year.

The Parliamentary Under-Secretary of State for Social Services (Miss Ann Widdecombe) : Customer service will be one of the new agency's core values. The prospect is of a more dynamic organisation, more responsive to change and to the needs of local customers, which gives better value for money to the taxpayer while at the same time providing a sensitive, caring and professional service.

Mr. Waller : Does my hon. Friend agree that many benefit offices have left and continue to leave a great deal to be desired in the speed and quality of delivery of service to claimants? Will the Benefits Agency make one of its main priorities an improvement in the quality and speed of service to claimants?

Miss Widdecombe : That will be one of the agency's top priorities. When the business plan and targets are published, they will be a source of reassurance. We are aware that the most urgent need is to improve service to customers. I commend the efforts made by the Keighley local office of which I am sure my hon. Friend is aware.

Mr. Battle : Is the Minister aware that the introduction of the new agency was partly forecast by the introduction of computerisation? As computerisation has been introduced staff have been made redundant in advance of the improvement in service. The result is staff cuts in offices which has reduced the quality of service. Could that matter be considered? In Pudsey, for example, it is a serious problem.

Miss Widdecombe : On the introduction of operational strategy we gave a guarantee that there would be no compulsory redundancies and there has been none. We will consider staffing as a result of networking, although we are in consultation with all concerned. So far, reductions have been achieved through natural wastage and voluntary agreement and we hope that that will continue.

Service Men's Families

3. Mr. Dalyell : To ask the Secretary of State for Social Security what guidance he has given to local offices about benefit payments to families of service men in the Gulf.

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Mr. Newton : Several instructions have gone to local offices on this subject. In particular we have emphasised the importance of giving help quickly and sympathetically to people who are likely to be in stressful circumstances.

Mr. Dalyell : My general impression is that local offices have dealt sympathetically and sensitively with those in emergency, straitened circumstances arising from the Gulf. Is the special allocation which was available in September likely still be be available to those who now come back in special straitened circumstances of one kind or another?

Mr. Newton : I am extremely grateful to the hon. Gentleman for his opening remarks. I, too, pay tribute to the work of our local offices and the central office at North Fylde, which deals with war pensions claims. It is a matter of satisfaction to us all.

I am not absolutely clear what the hon. Gentleman has in mind with his latter point, but he must mean the special arrangements that we made in respect of assistance with travel and resettlement for people returning from the Gulf in the immediate aftermath of the Iraqi invasion. Those arrangements remain in place.

Pensioners

5. Mr. Carrington : To ask the Secretary of State for Social Security what proportion of the average pensioner's income comes from occupational pensions, savings and earnings.

Mr. Newton : In 1987, 21 per cent. of the average pensioner's gross income was derived from occupational pensions, 19 per cent. from savings and investment and 7 per cent. from earnings.

Mr. Carrington : I thank my right hon. Friend for that answer. Does he agree that it is important that everybody in employment should be encouraged to make provision for their retirement? Is not the large increase in the number of people taking out personal pensions schemes to be greatly welcomed?

Mr. Newton : In a word, yes.

Dr. Reid : Should not every pensioner in Britain have two pensions : the first being the pension which the Government already give them and the second being the supplementary pension which they would receive, had not the Government, as one of their first and most scandalous acts, cut the link between pensions and earnings? Although the Secretary of State boasted that fewer than 50 per cent. of British pensioners own their homes, will he confirm that the amount that has been lost by a pensioner couple because of cutting that link, £20 a week, is equivalent to a mortgage, even at the crucifyingly high rates of interest under this Government, of £12,500 a year? Why does not he do the decent thing, supplement the pension with the money that he has already taken away and allow many more pensioners to own their home?

Mr. Newton : The number of pensioners in Britain owning their own homes is likely to rise steadily because of the general rise in home ownership to which this Government's policies have significantly contributed, often against vigorous opposition from Opposition Members in respect of one of the main engines of that growth : the sale of council houses.

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A growing number of pensioners have additional pensions, either from the additional SERPS pension or from occupational pensions or from the growth, to which my hon. Friend the Member for Fulham (Mr. Carrington) referred, in personal pensions. That has happened a great deal more and a great deal faster than it would have had the policies of the Opposition remained in place.

Mrs. Roe : Does my right hon. Friend agree that one of the most positive contributions that the Government can make to raising pensioners' living standards is to take whatever measures are necessary to curb inflation?

Mr. Newton : Yes, I do. One of the striking aspects of pensioners' incomes is the extent to which they have gained from increases in savings income during the past 10 years--whereas the average value of pensioners' savings income appears to have fallen under the Labour Government.

Mr. Meacher : Will the Minister confirm that the figures that he has given today and on other occasions detailing the rise in pensioner incomes are completely out of date because they go up only to 1987, since when the average pensioner has become poorer as a result of high inflation, high interest rates, falling dividends, falling asset prices and rising poll tax? Will he have the honesty to admit that the Government failed the pensioner 10 years ago when they broke the pension link with earnings and that the market on which the Government have since relied to increase pensioners' incomes has also failed the pensioner? Is not he ashamed that, as a result, the British pension is now much the lowest in Europe?

Mr. Newton : Let me simply give the hon. Gentleman the figures in real terms--at constant prices--for pensioners' average income from savings in 1974, 1979 and 1987, the latest year for which, as the hon. Gentleman said, figures are available. In 1974 the figure was £10.70 a week ; after five years of Labour Government it had fallen to £9.10 a week ; after eight years of Conservative Government it had more than doubled to £20.10 a week. If the hon. Gentleman can take any satisfaction from the record of the Government in which he was a Parliamentary Under- Secretary of State in the DHSS--a Government who reduced pensioners' incomes from savings--I shall be somewhat surprised.

6. Sir Anthony Durant : To ask the Secretary of State for Social Security what proportion of pensioners have some form of second income to add to the basic state pension.

Miss Widdecombe : My hon. Friend will be interested to hear that, in 1987, 84 per cent. of pensioners received some form of income in addition to the retirement pension and other state benefits.

Sir Anthony Durant : The whole House will agree that those figures are very encouraging. Do not they prove that we should concentrate our efforts now on pensioners in the greatest need?

Miss Widdecombe : My hon. Friend is absolutely right. That is why we have already directed £200 million of extra support towards poorer pensioners and why we intend to devote a further £80 million, as already announced.

Mr. O'Hara : Is the Minister aware of the situation of widows on pensions? A constituent of mine was recently

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widowed and was therefore--rightly--in receipt of a widow's pension based on her husband's contributions. She inherited no occupational pension from him. She has worked and paid social security contributions all her life. In her late 50s she became unemployed and because of overlapping benefits regulations she is not entitled to any recompense for her lifetime's contributions. Would not such a widow feel cheated by a Government who can treat her in that way?

Miss Widdecombe : The hon. Gentleman will be aware that through the safety net of income support and other benefits we try to assist those who, through no fault of their own, may not have successfully made the provision that they originally intended. The benefits are regularly uprated and reviewed and we shall continue to support such people in that way.

Dame Elaine Kellett-Bowman : Will my hon. Friend confirm that from 1979 to 1987 occupational pensions rose by 77 per cent. and that they continue to rise?

Miss Widdecombe : I can confirm those figures. We should also note that because of the abolition of the earnings rule, earnings are included in that additional income.

Mr. Allen : Will the Minister endorse the thanks of the Peterborough pension group that I met this morning to Peterborough city council for salvaging the concessionary fare scheme for elderly people which had been cut by the Conservative county council? Is not that another example of local government, of whatever political party, stepping in to salvage the Government's reputation over their treatment of the elderly? Does she agree with Julie Owens, the next Labour Member of Parliament for Peterborough, that the Government have taken from the married pensioner couple £1,000 that they would have had if the pension had been linked to earnings?

Miss Widdecombe : I find it increasingly distasteful that a party that completely decimated pensioners' savings by the inflation of the 1970s should have the gall to ask us to revert to the very system which produced no more than a 3 per cent. rise whereas we have produced a 31 per cent rise in pensioners' incomes. When the hon. Gentleman is talking to pensioners and others, perhaps he would tell them the absolute truth about how the Opposition's promises will be paid for.

Child Maintenance

7. Mr. Burns : To ask the Secretary of State for Social Security what is the average assessment for child maintenance under the current system.

The Parliamentary Under-Secretary of State for Social Security (Mr. Michael Jack) : A recent survey of DSS local offices and courts founthe average child maintenance assessment to be £25 a week per family.

Mr. Burns : Does my hon. Friend accept that Chelmsford is by no means unique in having far too many single mothers who face financial hardship because of being abandoned by the fathers? Does he agree that it is a national disgrace that only 30 per cent. of mothers receive regular maintenance payments and that the current

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two-pronged approach in the House and the other place to tighten up on maintenance should go a long way towards helping mothers?

Mr. Jack : First, I congratulate my hon. Friend on his continuing interest in this important subject. I agree with him. It is interesting that about 10 years ago 50 per cent. of maintenance orders were honoured. Today only 30 per cent. are honoured. The Child Support Bill would redress that and would compensate the taxpayer for the £300 million bill that he has to foot because people are not honouring their maintenance obligations.

Mr. Flynn : Does the Minister agree that a great deal of money would be available for child maintenance and other causes if there was a reduction in tax avoidance and tax evasion? Did he notice a recent parliamentary answer which showed that a married woman on an income of £1.8 million a day should be paying £262 million a year in income tax? Does he think that every woman in Britain with an income of £1.8 million a day should be paying income tax?

Mr. Jack : The hon. Gentleman tries to tempt me into areas that are rightly the province of my right hon. Friend the Chancellor of the Exchequer. The Government's tax policies have ensured that we have gained in terms of total cash revenues from income tax. That is why we have been able to make substantial increases in our social security budget, to the extent that this year we shall spend £60 billion.

Pensioners

8. Mr. Gerald Bowden : To ask the Secretary of State for Social Security what extra help has been directed to lower-income pensioners in the last two years.

Mr. Newton : We directed an extra £200 million in income- related benefits to elderly and disabled pensioners in October 1989. We will be directing a further £80 million to pensioners aged from 60 to 74 from next month. These increases total more than a quarter of a billion pounds and are in addition to the normal annual upratings.

Mr. Bowden : I am reassured by my right hon. Friend and pleased to hear that the greatest resources are being targeted to those in the greatest need. Will he confirm that Government policy will continue to provide benefits to those in the greatest need rather than blanket cover for all pensioners?

Mr. Newton : I have made it clear on a number of occasions that we stick firmly to our commitment to protect the value of the basic retirement pension. We have faithfully done that and will do so again in just over a month. It is right to recognise, as I have consistently recognised in exchanges with hon. Members, that many pensioners do not have additional savings and occupational incomes. We have deliberately sought to steer additional state help to such groups and I am grateful to my hon. Friend for his support.

Mr. Skinner : Are not the Government creating another form of low- income pensioners? I refer to those who have an occupational pension of, say, £10 a week as a result of the husband having worked in the pits for 40 or 50 years. If that occupational pension is increased by 50p per annum, for example, housing benefit is lost and poll tax is

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increased. After two small increases to the state pension and the miners' pit pension, the widows of retired miners will be worse off than hitherto.

Mr. Newton : As with the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) the hon. Gentleman may not understand fully how the benefit system works. Not the least of the advantages of the sort of increases in income support pensioner premium rates to which I referred in my main answer is that they raise the starting point for assistance with housing costs and the community charge. They feed through from pensioners on income support to those who are slightly above that level. Those who are a little above income support level are also assisted by the changes that we are making.

Family Credit

9. Mr. Amos : To ask the Secretary of State for Social Security what is the latest figure for the number of families benefiting from family credit and the number benefiting from the predecessor scheme in 1978-79.

Mr. Jack : At the end of November 1990, the latest date for which comprehensive information is available, the family credit caseload was 324,000. This compares with 82,000 families on family income supplement in November 1978.

Mr. Amos : I congratulate my hon. Friend on being able to concentrate more resources on more people who are in real need. Will he consider the merit of abolishing child benefit and using the money to target more help to more people through that mechanism instead of giving over £1 billion to people who are very wealthy and do not need child benefit?

Mr. Jack : I thank my hon. Friend for his appreciation of the help that we are giving to families with children. I remind him that on 24 October my right hon. Friend the Secretary of State said that "child benefit is and will remain a strong element in our policies for family support".--[ Official Report, 24 October 1990 ; Vol. 178, c. 352. ]

My hon. Friend will be aware that my right hon. Friend the Prime Minister accords with that view.

My hon. Friend's supplementary question refers to the breadth of support that we are now able to give through family credit and the higher premia in income support to families with children. It is our intention to continue to help poorer families in that way.

Mr. Madden : The Minister will understand that I was surprised and delighted when I telephoned the Minister of State earlier this afternoon and found that he picked up the phone himself. I hope that his office will be able to expedite payment of family credit to one of my constituents who won an appeal recently, thereby restoring the suspension of family credit in 1989. She is now owed £2,000. I hope very much that that sum will be paid promptly.

Family credit is no substitute for proper and adequate child benefit. The protests of mothers throughout the country at the way in which child benefit has been frozen and thereby reduced in value will become deafening as we approach the next general election.

Mr. Jack : The hon. Gentleman will not expect me to comment now on the individual case to which he referred.

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If he supplies me with the details, I shall follow up the matter. It is good to know that my right hon. Friend the Minister of State is multi-skilled, as we all are in the Department.

It is sad that Opposition Members are prepared to rubbish a benefit that can contribute about £50 a week to 17 per cent. of those in receipt of it, while 30 per cent. receive £40 and 65 per cent. receive £20 a week. That is substantial additional income for families who are back in work--some of them are in work for the first time--and making an effort to help themselves.

Mr. Jacques Arnold : Does my hon. Friend accept that family credit is not only available to many thousands more families than its predecessor, family income supplement, but--and just as valuable--the average payment is more than double the value of the supplement which used to be distributed?

Mr. Jack : As I said in my opening answer, the present case load is about 324,000, compared with 82,000 on family income supplement. The benefit is more generously structured and, since the start of the present campaign to increase awareness of the benefit about two weeks ago, we have already received about 10,000 telephone calls from people interested in learning more about this excellent benefit.

Social Fund

10. Mr. Corbett : To ask the Secretary of State for Social Security whether he will review the grant element of the social fund.

The Minister for Social Security and Disabled People (Mr. Nicholas Scott) : We have no plans to do so

Mr. Corbett : Will the Minister acknowledge that people who apply for grants from the social fund are among the poorest in the land? How can he pretend that there is any fairness or equity, when offices such as the one serving most of my constituency in Erdington will consider applications for grants only under the heading of high priority, which means that the majority of those applying for grants are refused before their case is considered? Will he now study the operation of the social fund grants and loans scheme, with a view to removing the cash limits and thereby making it fairer?

Mr. Scott : Expenditure on community care grants increased by 16 per cent. compared with the same period last year, so extra resources have been devoted to the system. I understand that the hon. Gentleman's local office is able only to consider high priority cases. We monitor carefully every aspect of the social fund and its operations, and later this year we shall have the results of the York survey and research into the operation of the fund and will take it into account at the time.

Sir Robert McCrindle : My right hon. Friend is aware of my somewhat dissident view upon the social fund. Could I suggest to him that, while I have no wish to return to the extravagent single payment scheme which was in existence under the previous Government, there is a case for assessing whether we have the balance between loans and grants absolutely right? Does he agree that, by giving loans to people in this section of society--they are indeed among

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the poorest in the land--we risk perpetuating the problem by not encouraging them to climb out of their difficulties and to cease to be reliant upon state benefits?

Mr. Scott : I certainly take account of what my hon. Friend says. I believe that in practice the social fund has proved to be much more flexible in giving help to the most vulnerable in our society than single payments ever were. We should not forget local authorities' responsibilities to enable people to establish or to maintain themselves within the local community.

Mr. Frank Field : As the Comptroller and Auditor General has said that the accounts that the Government submitted to him were largely worthless and meaningless, why should the House accept the Government's reassurance that the scheme is working well?

Mr. Scott : First, I think that the hon. Gentleman has somewhat exaggerated the Comptroller and Auditor General's comments and I am not surprised at that. In essence, we need to await the research findings which, as I have already said, will come out later this year. We have had a number of other reports which were mainly based upon small, unrepresentative samples. When we review the workings of the scheme we shall take account of all of that.

Mr. Simon Coombs : Is my right hon. Friend in a position to be able to tell the House how much it would cost to reintroduce a grant-based system, as suggested by the Labour party?

Mr. Scott : If we had projected the rise in single payments up to the present date at the rate at which it was growing when it was abolished we would be spending more than £1.1 billion on that scheme this year.

Mr. Alfred Morris : Are not the fund's rules in urgent need of change to address the plight of mentally ill patients, discharged from hospitals? How many of them are among the 779,000 who were refused help last year? How does he respond to the National Audit Office's strong criticisms of the fund and to Saul Becker, the benefits expert at Loughborough university, who described it as "an overwhelming disaster"?

Mr. Scott : I do not accept for a single moment that anyone who was really familiar with the workings of the social fund would support that. Of course, mentally-ill and mentally-handicapped people are a priority when community care grants are considered.

Pensioners

11. Sir Trevor Skeet : To ask the Secretary of State for Social Security what is the current value of the assets held by the average pensioner household ; and what was the comparable position in real terms in 1978-79.

Miss Widdecombe : My hon. Friend will be pleased to hear that we estimate that the average real value of pensioners' assets doubled between 1979 and 1987.

Sir Trevor Skeet : I am grateful to my hon. Friend for that beneficial answer. Will she make a comparison with France and Germany, where house ownership is less extensive than in the United Kingdom? Will she also deal with the poorer section of the United Kingdom,

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