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Caring for the Elderly

I have been generous in giving way. To get through the rest of my remarks, I will not be so generous. I merely observe that in May, when the right hon. Member for Witney was asked whether he would rule out abolishing the winter fuel payment, he refused to do so. The Government have legislated for the most radical pension reforms since the basic state pension was introduced. Those changes will sharply narrow the gender gap in pensions, delivering fairer outcomes for women and carers. In 2010, more women will be able to claim a full basic state pension than ever before. The number of qualifying years will be reduced from 39 to 30, which means that around three quarters of women reaching state pension age in 2010 will be entitled to a full basic state pension in their own right, compared with around only 30 per cent. now. Our reforms will enable more women to build up a state pension based on their own contributions. For the first time, paid and credited contributions for caring will be recognised equally for basic state pension and state second pension purposes. It is a great step forward that the invaluable caring work done by millions of women up and down the country is finally to be recognised, valued and rewarded in that historic reform. The Pensions Act 2008 also introduced a vital measure to allow eligible people, mainly women and carers again, to buy an additional six years of voluntary national insurance contributions. We estimate that as many as 500,000 women will benefit from that change alone. The Opposition have claimed that we have not been clear about the restoration of the link with earnings, but that change is already enshrined in law. We have been clear that we will restore the link between state pensions and earnings in 2012 or by the end of the next Parliament at the latest. From 2012, radical changes to private pension saving will start to come into effect. Those changes will be the most significant changes to pension provision since the state pension was introduced 100 years ago. We will see between 6 million and 9 million workers either newly saving or saving more in workplace pension schemes. That will be supported by the introduction of the personal accounts scheme, which will fill the gap in the pensions market for workers on moderate or low incomes. Annual pension contributions are estimated to grow to around £10 billion a year by 2015 as a result of those changes. Around £6 billion of that is estimated to be new saving. That represents significant steps toward tackling under-saving for later life, as well as a boost to the industry. Through the Budget this year, we introduced two important changes for pensioners with savings. From November, the capital disregard for pension credit will be increased from £6,000 to £10,000. That will benefit 500,000 people, with an average weekly gain of £4, and it means that 88 per cent. of pension credit recipients will be unaffected by having benefit deducted because of their savings. From October, we will increase the amount that the over-50s can save in an individual savings account to £10,200. Those measures, when taken with the planned changes to personal allowances announced in the Budget last year, will mean that around 600,000 more pensioners will pay no tax at all. Overall, that means that 60 per cent. of pensioners will pay no tax. Maintaining confidence in pensions is undermined by scaremongering about the state of the industry. Unlike in previous downturns, this Government have put in place arrangements to ensure that people are not left without a pension, even when their employer goes bust. This Government set up the Pension Protection Fund to ensure a strong and clear protection regime for people whose pension scheme fails. The Pension Protection Fund provides a safety net for 12 million members of defined-benefit schemes. It has £3 billion in assets and is currently paying out around £4.2 million a month in compensation to those whose employers have ceased to trade. Given those numbers, there is no question but that the Pension Protection Fund is sustainable and that people can have confidence that pensions savings can be maintained. After inheriting a situation in 1997 where pensioner poverty had been growing, this party has made genuine progress in helping the most vulnerable. For the first time in history, we in Britain have broken the link between age and poverty. Thanks to the policies of this Government, people are now no more likely to be poor because they are old. That is an achievement of which we on the Government Benches are rightly proud. We have also laid strong and lasting foundations for the future. We are not only taking action to deliver real help now to Britain's pensioners, but planning for generations to come. Our pension reforms mean that generations will benefit from a fairer and more generous state pension and that millions more will be saving in workplace pensions. Being old need no longer mean being poor, thanks to the action that we are already taking. That is the agenda of a Government who are on the side of the people, not markets—a Government of action who will not sit idly by and do nothing. We have published our strategy to build a society for all ages, and we will take action to bring forward the review of the default retirement age. Yesterday, we published a Green Paper looking at the care and support system, which encompasses many of the important issues that have struck such a chord outside this House, such as personalisation and the national carers system. I commend the Prime Minister's amendment to the House.