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Pensioner Incomes

Volume 406: debated on Thursday 12 June 2003

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7.

What the average income of pensioners was in 2002–03. [118663]

The latest information available is for 2000–01. In that year, pensioner couples had an average income of £301 per week, and single pensioners had an average income of £160 per week.

Does the Chief Secretary accept that the highway robbery of £5 billion a year from pension funds through advance corporation tax by the Chancellor and his partner in crime, the Prime Minister, is a major cause of the devastating failure of final salary pension schemes?

No, that analysis is as misleading as it is inaccurate. The truth is that ACT was part of a wider package that involved reductions in corporation tax—long overdue reforms addressing a distortion that was not promoting investment in the British economy, which ought to be widely welcomed on both sides of the House.

When calculating pensioners' income, does my right hon. Friend set aside expenditure that pensioners incurred previously but no longer have to incur—in particular, expenditure on eye tests, bus travel and, for older pensioners, television licences? Is not the true income of pensioners even greater when that is taken into consideration, showing that pensioners are much better off under this Government than they were under the Conservative Government?

My hon. Friend makes a fair point. He might have added to it the reduction in VAT on fuel, concessionary travel for pensioners and the introduction of a 10p starting rate of tax, all of which have benefited pensioners. All of those are things that we have done, and that Conservative Members failed consistently to do during the years in which they had stewardship of the economy.

On the issue of pensioner incomes, does the Chief Secretary recall reading recently about the agreement between the Chancellor of the Exchequer and the Prime Minister a number of years ago to sign up to something called a fairness agenda? Under what part of the fairness agenda should the Chancellor of the Exchequer, who earns about £140,000 per year, pay the same council tax as many poor pensioners on far lower incomes?

The hon. Gentleman's point fails to address the real benefits that have accrued to pensioners. The reality is that the fairness to pensioners comes from an average increase for the poorest third of pensioner households of £1,600 a year in real terms, amounting to more than £30 a week, from October 2003. That is the real fairness for pensioners. With the minimum income guarantee, and with 400,000 fewer pensioners living in relative low-income households than in 1996–97, pensioners are really benefiting from the measures taken by my right hon. Friend the Chancellor.

Will my right hon. Friend accept congratulations from many pensioners who live in Wallasey and elsewhere on the magnificent record in ending pensioner poverty, with the introduction of the minimum income guarantee, and in dealing with the terrible legacy of pensioner poverty left by the previous Government? Will he also look forward to the introduction of the pension credit, which will build on that, in October?

My hon. Friend makes an important point. I want to pay tribute to the contribution that she made as a Minister in the Department of Social Security, as it then was, to alleviating pensioner poverty. The reality is that, as a result of the pension credit, we are currently spending £9.2 billion extra in real terms on pensioners, which will be £5.7 billion more in 2004–05 than if the basic state pension had been linked to earnings since 1998. Those are real benefits in tackling pensioner poverty.