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Mr. Malcolm Wicks (Croydon, North): With my right hon. Friend the Minister for Welfare Reform, I have met young adults in Croydon with very serious learning difficulties--some have Down's syndrome--who are now in work, but some of those in residential care seem to suffer from a particular poverty trap, because, to get their residential care cost, they have to stay on income support. It is a technical matter. I am not expecting an answer now, but will the Department of Social Security look closely at that matter, so that those young adults with serious learning difficulties can work full-time, not just part-time?

Ms Harman: My hon. Friend has raised an important point, and we will certainly look into it. The system is full of disincentives to work for people who are on incapacity benefit, or are disabled because there was never an expectation that they would want to work or could work. I thank him for raising the matter.

I have talked about welfare reform being about work for those who can, and I turn to security for those who cannot. That brings me to pensions. It is a great concern

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that many of those heading to retirement face a drop in income that is far greater than it need be. It is a great scandal that many of the poorest people in Britain are pensioners--people who have worked hard all their lives, and now struggle to make ends meet.

For tomorrow's pensioners, we will reform the pension system, so that it tackles the growing inequality of income in retirement; extends occupational pensions to the many--up to 1 million--who currently do not join them; provides access to second pensions through our new stakeholder pensions for those who have no access to an occupational pension and for whom private pensions can be very poor value for money; provides second pension entitlements for those who care for an elderly or disabled relative or for children while they are young; and ensures that the growing number of the self-employed are properly provided for.

We will set out our pensions reform in a Green Paper, arising out of the work of the Under-Secretary of State for Social Security, my hon. Friend the Member for Southampton, Itchen (Mr. Denham), by the end of the year, but today's pensioners, particularly the poorest, cannot wait.

Hon. Members will remember that, while we were in opposition, pensions was an issue of some controversy within the Labour party. I was clear then, and I remain so, that we must recognise and take action to help all pensioners. We have done so with the cut in VAT and the winter fuel payment of £20 for every pensioner household, but I was also clear, and I remain so, that our priority must be to get help to the poorest pensioners--those on income support and those who are entitled to income support but not receiving it.

For pensioners on income support, we gave a winter fuel payment of £50.

Mr. Webb: The right hon. Lady rightly stresses the urgency of helping the poorest pensioners who are not claiming their income support. Does she accept that, on 1 May, when the Government came to power, half those1 million pensioners were already claiming a means-tested benefit--housing benefit--and that local authorities throughout the land have lists of those 500,000 people, ready to hand over to central Government? Why is it going to take until the end of this year to get a Green Paper on something that could have been done 18 months ago?

Ms Harman: The hon. Gentleman raises an important point: it is possible to find out who is not claiming and get help to them. If I may, I will tell him how we are progressing on that element of the pension review in due course.

Mr. Tim Loughton (East Worthing and Shoreham): Will the right hon. Lady give way?

Ms Harman: I am not going to give way.

We estimate that about 1 million pensioners are entitled to income support, but do not receive it. The previous Government were never interested in that. They did not even know the figures until I asked a parliamentary question. At first, the figure was that 800,000 pensioners

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were not receiving the income support to which they were entitled, and that rose to 1 million. That was a major failing of the previous Government--to leave 1 million pensioners not on the breadline, but below it. Again, I have taken action.

In April this year, I established, in nine areas, pilot projects to find ways in which to identify the poorest pensioners who are losing on their income support. In those pilot areas, we are searching our computer data and that of local authorities to identify those over pension age who look as if they might be eligible for income support but who are not registered as claiming it.

A personal adviser will then contact those pensioners, visit them and sort out their income support. The interim results of the research on those pilots shows that pensioners want help to find their way through the system--they cannot do it on their own, they do not want to wait in social security offices to get help, and they have simply no idea where to start. Our interim evaluation shows that some pensioners are losing 24p a week on unclaimed income support, and that others are losing up to £51 a week.

That is an indictment of the system that I inherited, and we are changing it. I visited one of the projects, in Paisley, Scotland, and met some of the pensioners and their personal advisers. The pensioners were delighted and relieved to be getting the extra help they need. The personal advisers were doing an excellent job--they, too, are changing the face of social security.

Our action is about ensuring that there is work for those who can and security for those who cannot, and getting benefits to those who are entitled to them. We are also stopping benefits going to those who are not entitled to them. I shall conclude by telling the House how we are transforming delivery of service and tackling fraud.

Social security reform has to deal not only with who gets money and how much they get, but with how the service is provided. That work is being ably led by the Under-Secretary of State for Social Security, myhon. Friend the Member for Manchester, Withington (Mr. Bradley). We are pioneering one-stop shops, so that those who are claiming do not have to go from the jobcentre, to the social security office and then to the council.

We are sorting out the forms, so that we do not ask those who are claiming three times for the same information, most of which we already have. We are also piloting telephone claims services for pensioners, introducing a new complaints system, and tackling fraud--work which was being ably developed by the Under-Secretary of State for Social Security, my hon. Friend the Member for Itchen but is now being carried forward by my right hon. Friend the Minister for Welfare Reform.

In November 1997, I launched the benefit fraud inspectorate--which has already published its first report, on housing benefit fraud in Blackpool. Today, my right hon. Friend the Minister for Welfare Reform published a Green Paper on fraud, which he is working on tackling.

In this debate, I have explained to the House--at some length, for which I apologise--actions that amount to a major programme of welfare reform that is already up and running. After 18 years of the system going in the wrong direction, we never expected to turn it round overnight. However, substantial welfare reform is under way in

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every part of the social security system. It is practical action--making a real difference to people's life--which is what matters to my constituents, and to those of other hon. Members on both sides of the House. That is a record on which I and my ministerial team are proud to be judged.

8.11 pm

Mr. David Rendel (Newbury): I do not think that any hon. Member would dispute the fact that, since the general election last May, there has been a great deal of confusion and even dissent at the Department of Social Security. We have seen open rebellion by Labour Members on the issue of lone parent benefit cuts, and a complete lack of long-promised policies to tackle the causes--as opposed to merely the symptoms--of pensioner poverty. We have seen, as recently as last week, the failure to produce a fair and workable solution to the problems of child support caused by the complex nature of human relationships. We have seen also what should have been key projects implemented in a disastrous manner.

It was therefore interesting to hear the Secretary of State concentrate in her speech almost entirely on the policies that she still intends to introduce in the future, rather than on the level of incompetence with which she and her colleagues have handled their portfolio in the past year. That latter point is the main subject of today's motion by the Conservatives.

Let us take, for example, the benefits integrity project. What a misnomer that was. The project's main outcome seems to have been to accuse unfairly many who have acted with complete integrity, only for those accusations to prove to be completely unfounded. The project that was supposed to evaluate entitlement to disability living allowance, and thereby to restore integrity, has managed simply to strip away the dignity of many of those who were investigated.

The Social Security Committee's report was uncompromisingly damning in its assessment of the project, and the project's outcome is now widely acknowledged as a failure. The Department of Social Security failed to uncover almost any fraudulent claims. Meanwhile, many of the most severely disabled people had their benefits reduced or even stopped. Some people--perhaps primarily Labour Members--seem to think that the Prime Minister is capable of walking on water. However, even he hit problems when the Government's solution to patients who are quadriplegics was to tell them to rise from their beds and work.

It is to be hoped that the newly established disability benefits forum will achieve its aim. It would be nice to think that it will go some way towards rebuilding trust between those who are disabled, their organisations and the DSS itself. However, I suspect that it will take a very long time to rebuild that trust. I should be grateful if the Secretary of State told us, in line with the report's recommendations, what action she has taken to review the rules of conduct and good practice for general elections, to minimise the risk of such errors of judgment occurring in future.

Then there are smart cards--which are not so smart, as it turns out. The £1.5 billion contract awarded, in 1996, to ICL to computerise benefit payments at post offices is currently running two years behind schedule. By March 1998, only 40,000 claimants were using the new system,

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compared with the 19 million people nationwide who should have been able to use it. Although it is claimed that the system will eradicate £150 million in fraud each year, the DSS has already incurred huge costs in consolidating all its benefits payments on to one central database, to make it compatible with the Post Office automation system. Although the costs may well be as much as £200 million--rather more than the Government are expecting to regain in combating fraud--the DSS is still waiting, as it will be waiting for at least another two years, for potential savings in reduced fraud to be made.

No one disputes the important and laudable objective of eliminating fraud. However, those examples illustrate how poor management at the Department has hampered efforts on that front and done little to enhance public confidence in or regard for the benefits system.

Then there was the Public Accounts Committee's report on the failure of the NIRS 2--national insurance recording system--project. The report highlights gross incompetence within the DSS. The Department awarded a contract on the basis of flimsy information and a rushed timetable. It failed to ensure that it was getting value for money, or to make contingency plans for potential delays in the project. It failed also to gain adequate compensation when the project did not start on time. The Contributions Agency itself assessed the proposals by Andersen Consulting as


It is quite clear from the PAC report that the agency's actions went beyond the margins of acceptability.

There have been failures even in implementing policy. Winter fuel payments have already been mentioned in the debate and are a case in point. For a start, the Chancellor's use of the description "pensioner households" caused much confusion at the DSS. Calculating payments using that definition required data correlation in about15 million computer records, involving 15 qualifying benefits across nine computer systems. It was therefore no surprise to learn that, last winter, administration costs alone were 10 per cent. of overall expenditure.

On top of huge delays in sending out cheques, implementation was such a huge disaster that £1.7 million was spent on what should have been a totally unnecessary advertising campaign, telling people that it was all right to cash the cheques that landed on their doorsteps. Anyone would have thought that one could assume that it is all right to cash a cheque that lands on one's doorstep. The fact is that 40,801 invalid girocheques were sent out with an incorrect date on them; 649 pensioners received two lots of £50 payments; and in 434 cases, both the invalid and the replacement cheques were cashed. I understand that letters have now been sent out "inviting repayment".

What about the so-called crisis in welfare spending? Although for many years there certainly has been growth in welfare spending, growth is now levelling out. As a percentage of gross domestic product, social security expenditure in Britain is forecast to fall. By the Government's own figures, planned social security expenditure in 1998-99 is lower by £588 million than it was projected to be in last year's expenditure plans. The biggest problem that we face with such expenditure is not the total amount, but the failure to target benefits properly on those who need them most.

As has been mentioned, an estimated 1 million pensioners still do not claim the income support to which they are entitled and, as a result, do not qualify for other

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associated benefits. As my hon. Friend the Member for Northavon (Mr. Webb) pointed out, the names of half those people have been known to local authorities for years, yet the Secretary of State is only just getting around to pilot projects to address the problem.

I should like to raise another aspect of all those failures--the fact that Conservative Members seem to have gained tremendous powers of hindsight since their defeat last year. Several of the schemes in which they correctly identified significant problems have at their root the way in which they were established under the previous Administration. In the case of the benefits integrity project, NIRS 2 or smart cards, it is no good their standing up and accusing the new Government of mismanagement, without acknowledging their own part in the problem. The Conservatives would do well to remember that some of the projects were set up years before the election.

In respect of the benefits integrity project, the Social Security Committee report described as "regrettable" the failure of the former Minister of State to consult disability organisations. Further, it stated that it was "totally unacceptable" to have formally launched the BIP before the general election and before incoming Ministers had had the opportunity properly to assess the project that was then set in motion. Perhaps the most important point to recognise is that many of the mistakes associated with the BIP occurred at the inception of the project. They date from the moment at which the previous Government failed to consult disability organisations, and ploughed on with the project without regard for the people it was targeting.

If we are talking about incompetence, Conservative Members might care to look a little more closely at the so-called incompetence index that they published last month. It was drawn up as an illustration of ministerial incompetence at the Department of Social Security. It refers to cold weather payments instead of winter fuel payments, which are a very different matter. If one is complaining about incompetence, it is important not to be incompetent. People who live in glass houses should not throw stones.

As the debate has developed, it has become increasingly clear that it is the second social security debate introduced by the Conservatives in two weeks that is rapidly turning into something of an own goal.


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