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Supplementary Benefit (Pensioners)

Volume 949: debated on Tuesday 9 May 1978

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14.

asked the Secretary of State for Social Services how many pensioners will be dependent on supplementary benefit in 1980.

16.

asked the Secretary of State for Social Services how many pensioners will be dependent on supplementary benefit in 1980.

We estimate about 2·1 million, including dependants and assuming the present level of take-up.

I thank the hon. Gentleman for the figures. They show an increase over today's figures. As a consequence of that, and because of the disappointing figures that they represent in future, has the hon. Gentleman considered any future or alternative schemes to help to reduce the list, such as a tax credit scheme?

I must correct the hon. Gentleman on his first point. The December 1976 figure represents 22 per cent. of pensioners, and our estimate assumes no significant change by 1980. As for the second part of his supplementary question, the new pension scheme will progressively take more and more pensioners off supplementary benefit. Although we have already stated that we have no objection in principle to tax credits, the further development of a tax credit scheme is not a high priority compared with other developments in benefits in the area of taxation.

Do not the figures that the Minister has given to the House make complete nonsense of the Government's statement about reducing the number of pensioners on means-tested benefits?

Not at all. Our aim is to get pensioners off means-tested benefits. The new pension scheme will do just that. The fact that by 1980 the numbers will still be roughly the same as they are today is no fault of the new pension scheme, which builds up over 20 years. By the end of that period, there will be very few on supplementary benefits.

Does my hon. Friend agree that if by strange mischance the Tories are returned to power, the number of pensioners on supplementary benefits in 1980 will be much greater, bearing in mind that ruthless cuts in public expenditure hurt pensioners more than anyone else?

That is a matter of opinion. I share my hon. Friend's opinion that the Conservative Party, in order to cut public expenditure, must tackle the problem of social security benethere will be very few on supplementary public expenditure, the vast bulk of which goes on pensioners and dependants. I do not know how it will get out of that difficulty. It will have to answer to the electorate during the General Election campaign.

Perhaps the hon. Gentleman will recognise that his rather cavalier dismissal of the tax credit scheme will deprive the Government of what could be the biggest single step to reduce means-testing of pensioners, in that if we had a tax credit no bigger than the tax allowance up to 1 million pensioners could be taken out of the supplementary benefits scheme. If this Government are not prepared to do it, will they make way for a Government who are?

First, it would involve additional public expenditure. Secondly, and just as important, there would be acute practical difficulties. My Department would have to employ about 3,000 extra staff to pay the 8 million pensioners. We make 100 million payments a year. We would also probably need further staff to check on each £1 of income even for odd jobs that pensioners were doing. Leaving aside the problem of finding the resources, I do not think that the practical difficulties will be overcome until the mid-1980s, when both tax records and local office benefits will have been computerised.