Pensioner Poverty
Speaking during an Opposition Day debate on Pensioner Poverty, Brooks Newmark calls for an end to means-testing for the elderly.
Mr. Brooks Newmark (Braintree) (Con): Thank you, Madam Deputy Speaker; I assume that my hon. Friend the Member for Broxbourne (Mr. Walker) is cheering because he is looking forward to what I have to say on this important subject.
We all have to cope with a rising cost of living and a record burden of tax from a Government who have clearly run out of money. However, we should regard the fact that that burden falls disproportionately on pensioners-some of the most vulnerable people in our society-as a disgrace. The real cost of living is increasing steadily, and that is all the more apparent for pensioners living on low or fixed incomes. Recent research highlights the fact that inflation for the elderly is more than a third higher than the official consumer prices index rate, at 3.4 per cent. As we have heard today, the elderly spend a higher proportion of their income on the bare necessities and less on consumer goods.
However, the numbers themselves do not tell the whole story of pensioners in my semi-rural constituency; they are struggling to run a car, and struggling with rising energy bills and the rising cost of a pint of milk and a loaf of bread. I want to focus on just two themes: fuel poverty and the Government's addiction to the means-testing of pensioners.
Rising energy costs are inconvenient to almost everybody, but they are potentially deadly to pensioners. Earlier this year, I wrote to the chief executive of EDF Energy, which supplies many of my constituents in Braintree and Witham, to ask what steps the company was taking to lighten the load of fuel poverty, which is falling on vulnerable people, particularly pensioners. The response that I received drew my attention to EDF's very welcome social tariff, which offers a 15 per cent. discount on energy bills for those in receipt of income support or pension credit or who are recognised as living in fuel poverty because they spend more than 10 per cent. of their annual income on energy. Nevertheless, a percentage discount of that kind becomes less and less relevant as the underlying cost continues to spiral upwards. The scheme will need to be kept under review, particularly as some energy suppliers have raised their tariffs by more than 15 per cent. already this year and average fuel bills have risen by 60 per cent. in the past four years.
I have two further observations, applicable to both the private sector and the Government in their respective responses to pensioner poverty, the first of which is short-termism. EDF, for instance, confirmed that its scheme is guaranteed to continue until March of next year, but not beyond. Similarly, the Government have shown time and again that they also favour short-term solutions to pensioner poverty; this year's Budget offered another one-off payment for pensioners, who would rather have a sustainable income. I have previously addressed this issue at some length with the Prime Minister. When the Treasury Committee considered the 2006 Budget, I reminded the right hon. Gentleman of Help the Aged's view of the failure to repeat a £200 council tax rebate for pensioners:
"The Government issued a pre-election bribe last year but they have not renewed it for 2006. This exposes a shameful level of political expediency".
When I asked the Prime Minister what had changed since the general election, he said
"What has changed is we said in the last Budget that this was for the year and we made no commitment for it beyond that."
Unfortunately, this culture of Government living from year to year, devoid of long-term planning, does little to help the vulnerable pensioners who are living from hand to mouth day by day.
John Penrose: Does my hon. Friend agree that one of the causes of today's short-termism is almost certainly the Government's tight financial circumstances? We have already seen, with the 10p tax U-turn and with Northern Rock, the pressure that has been created on the Government's three financial tests. They had no headroom to make such short-term measures become sustainable longer-term measures. The reason for their short-term thinking is the financial pressures that they have landed themselves in.
Mr. Newmark: My hon. Friend makes an excellent point. This is happening across the board throughout all public services. The pre-Budget report and the Budget showed that the Government are having to make cut after cut, and the people paying the price are the vulnerable-the poorest in our society, particularly pensioners.
We have seen all too recently what happens to a Government fearing annihilation in local elections and by-elections-they feel free to make costly electoral bribes with taxpayers' money. Unfortunately, we have also seen the doubling of council tax over the past decade, met with rebates that then vanish after the electoral dust has settled. Now there is an additional one-off winter fuel payment of £100 for 2008-09. There has also been an increase in personal allowances partially to compensate those who lost out from the doubling of the 10p rate, which, again, will vanish when the year is up. The common theme in all the Government's disingenuous ingenuity is the short time horizon for additional support offered to the elderly and the vulnerable. This is not a helpful approach for those who are on low and fixed incomes and whose savings have been systematically eroded by the Government's ever-increasing dependence on means-testing.
My second observation concerns the challenge of increasing uptake. A total of 55,000 people are currently on EDF Energy's reduced social tariff, although the chief executive was unable to tell me how many of them fell within my constituency. I am glad that the private sector is taking action, and I hope that more will be done to promote uptake amongst pensioners and other vulnerable people. Yet the Government's response to pensioner fuel poverty has been an expensive awareness campaign through Citizens Advice that is unlikely to reach the most vulnerable pensioners who do not take the initiative to seek such advice. On the DWP's own figures, between 1.1 million and 1.7 million pensioners are not claiming the help that they are entitled to, and the Department even admits that the numbers responding to its campaigns to increase uptake are steadily decreasing over time.
More worrying still is the proposal for even more invasive data sharing between the Government and the energy companies-a point eloquently made earlier in the week by my hon. Friend the Member for Rutland and Melton (Alan Duncan). If a major energy supplier such as EDF does not hold data that can tell me how many people in my constituency-or in Braintree district, if that is easier for it-already make use of its own scheme, I have little confidence in entrusting it with the personal data of millions of vulnerable pensioners.
The elephant in the room concerning uptake remains the Government's utter failure to address their reliance on the principle of means-testing pensioners. The first question that I ever asked the former Prime Minister, in response to the concerns of the Braintree Pensioners Action Group, addressed that very point and it is something that I have since followed up with his successor. The current Prime Minister has told me that,
"Our aim is to link tax and benefits for pensioners in a way that there is a seamless transition through the benefit and tax system."
But outside his own parallel universe, the interaction of the tax and benefit system has so many burst seams that the stuffing is falling out completely. The Government are still trying to compensate for the heavier tax burden and higher costs of living facing pensioners by relying on one-off bribes and means-tested benefits that pensioners find complicated and inaccessible. As many hon. Members do, I routinely see pensioners who qualify for means-tested benefits but do not understand their entitlement, even if they happen to receive it, because they are forced to plough through page after page of abstruse computer-generated calculations. I believe that my hon. Friend the Member for Weston-super-Mare (John Penrose) made that point.
The Prime Minister has also told me that the complexity does not matter so much because:
"What we have reduced is the amount of means-testing that is done for pensioners."
Bah, humbug! But there are still 3.74 million people over the age of 60 in receipt of means-tested benefits and many more who are entitled to claim but do not do so. Help the Aged identifies a staggering sum of up to £4.5 billion that lies unclaimed each year. Furthermore, half of those pensioners entitled to council tax benefit do not claim it. Once again, there is a disconnect between the Prime Minister's rhetoric on means-testing and the reality of stagnating uptake, a declining savings culture and an ongoing failure to reach those pensioners who are most in need of additional support.
As the Government move to the introduction of personal accounts, the reliance on means-tested benefits will pose new problems for a new generation of savers looking towards their retirement. The Government must face up to the need to grasp the means-testing nettle so that people feel confident about saving for the future. The message must be that taking personal responsibility along with a personal account is the right thing for pensioners, and we will not leave them worse off. The Opposition motion is right to call on the Government to deliver on one promise from 1997, but they must also deliver on another: the end of means-testing for the elderly.
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BROOKS' OTHER CONTRIBUTIONS TO THE DEBATE
Mr. Brooks Newmark (Braintree) (Con): Is my hon. Friend aware that many elderly people find the problem with means-testing is that the forms that they must fill in are incredibly complicated and even frightening? That has the result that many pensioners do not claim what they are perfectly entitled to.
Mr. Waterson: My hon. Friend makes a good point. Despite the sterling efforts of the Pension Service-I have visited my local branch in Eastbourne-which goes to extraordinary lengths to be helpful, many older people are put off by the complexity of the process, the form-filling and the long telephone call that is usually involved. There are other reasons, such as pride and not wanting to go cap in hand to the state. Many people assume that they are not entitled, and it is clear from the statistics that that is especially true for council tax benefit, because some elderly people who own their homes cannot believe for a moment that they would be qualified to claim.
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Mr. Newmark: First, the Minister threw the name Maxwell at us as if that were going to be the thrust of his argument. Mr. Maxwell was a Labour Member of Parliament. Secondly, this Government have robbed £5 billion a year-£50 billion to date-from pensioners. Thirdly, we have the highest fuel tax in the whole of Europe. That is all driven by this Government.
Mr. O'Brien: Let me remind the hon. Gentleman that when we came to office in 1997, the amount of money spent by the state on pensioners was £62 billion a year. It is now £90 billion a year. A certain degree of humility on the part of his party is needed on the matter.
