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Pensioners (Income)

Volume 175: debated on Monday 2 July 1990

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To ask the Secretary of State for Social Security by how much pensioners' total incomes have risen (a) since 1979 and (b) between 1974 to 1979.

I am pleased to be able to tell my hon. Friend that while pensioners' total net incomes rose by only 3 per cent. in real terms between 1974 and 1979, they rose on average by more than that in each year between 1979 and 1987. In total, they rose by over 31 per cent. in real terms in this Government's first eight years of office.

I thank my hon. Friend for that reply. As it is fashionable to quote the hon. Member for Oldham, West (Mr. Meacher) today, I am sure that she is aware of his comments in the Chamber on 30 January, when he said that the important consideration is the increase in pensioners' average income over the course of a Government. If my calculations are correct, we have done six times as well as the previous Labour Government. Does my hon. Friend therefore agree that a strong and proper pensions policy depends on two pillars—first, the strength of the economy, which enables us to pay proper state pensions and, secondly, a healthy economy giving a proper return on pensioners' savings? On both counts we outperform the poor performance of the previous Labour Government and the poor promises of a would-be Labour Government.

I agree with my hon. Friend. It is clear that the successful economic policies pursued by the Government have enabled us to spend £55 billion a year in real terms on social security and spending on pensioners and the elderly to increase by a quarter. To pursue anti-inflationary policies is particularly important for pensioners.

I accept the accuracy of the Government's figures although, of course, they have not yet been checked by the Select Committee. Will the hon. Lady confirm that for the poorest pensioners the most important thing to look for is a real increase in national insurance benefits? Will she confirm that, under the Labour Government, pensions for that group rose by 20 per cent. and under this Government they are yet to rise by 3 per cent?

The incomes of the poorest pensioners increased by 19 per cent. in that same period. As the hon. Gentleman will know, the numbers in the lowest quintile decreased from 38 to 24 per cent.

Is not it important to look carefully at the differences in income and support between the younger pensioners and other older pensioners, aged over 75? Have not younger pensioners in particular done extremely well with regard not only to income but to home ownership and personal and occupational pensions? Is not it necessary to look carefully at the incomes and the support given to older pensioners who have not done so well with regard to home ownership and occupational pensions?

My hon. Friend is right. Seventy per cent. of recently retired pensioners have occupational pensions, half own their own homes and 85 per cent. have income from savings. The Government have taken action to help the older, poorer pensioners through the package of measures announced last October, which helped 2.6 million individuals.

No one seeks to deny the important improvements in the standards of living that pensioners with occupational pensions and savings have enjoyed over the past few years. Does the hon. Lady accept, however, that it is a great mistake for Government policy to be predicated on the basis of gross public expenditure increases or average pensioners' incomes? Does she further accept that, over the past year, the erosion in pensioners' standards of living because of the difference between the retail prices index and earnings levels has been a constant source of concern for poor pensioners? If the package of measures last October was so successful, why will not the hon. Lady repeat it this October?

I am glad that the hon. Gentleman implicitly accepts that the October package was a success. Its aim was to target help towards older and poorer pensioners. I am sure that those who are responsible for dealing with those matters will listen to the hon. Gentleman's points when he asks for them to be considered next October.

Is my hon. Friend really telling the House and the country that pensioners' living standards have risen faster in each of the past 11 years of the Conservative Government than in the six years of the previous Labour Government?

Perhaps the hon. Member for Eastbourne (Mr. Gow) would like to think about the fact that, by comparing five years and 11 years, one gets rather different outcomes. This is another attempt by the Government to manipulate and misuse the agenda of the House. I hope that you will reconsider your earlier ruling, Mr. Speaker, or any democratic procedure for holding the Government accountable will break down. I put it to the Minister—I am sure that she knows this to be true—that, according to the Library, 20 per cent. of pensioners rely entirely on state benefits. The Government have cut state pensions by £13.20 for a single pensioner and £20.70 for a couple. Labour takes great pride in the improvement in many pensioners' incomes due to the introduction of SERPS, which the Government have now cut, resulting in a reduction in the incomes of future pensioners. Labour is proud of the improvements for some but is worried about those who are finding life increasingly hard, many of whom are women. The poorest pensioners are women, and the Government are doing nothing for them.

The average income of pensioners who receive all their income from state benefits has increased by over 27 per cent. during the life of this Government. If the hon. Lady and her hon. Friends go on threatening and scaremongering about the choice, independence and diversity that the Government have introduced into pensions, they will live to rue the day.