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Ms Harman: The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) has failed to address pensioner poverty and to say whether he thinks that we are right to tackle that problem by investing in help for pensioners and giving the greatest help to the poorest, who have been left behind. If, in addition to the help that we are giving all pensioners, we gave them the £2 billion that we have set aside for the poorest pensioners, the poorest would get just pence--they need pounds. We cannot limit the help that is needed by the poorest to that which we could prudently give to all. The problem is that the pensioners who have fallen behind--the very poorest--need extra money.

I shall tell the hon. Gentleman about one of the pensioners I met yesterday. She is an elderly widow who had been identified through our pilot project and given extra help. She told me that, instead of being able to buy only two apples at a time, she could now afford to buy a

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pound of apples. We are talking about people who are living on the margins, while the hon. Gentleman is pursuing high-blown theory. The proposal aims to tackle pensioner poverty and give pensioners the help that they need.

The hon. Gentleman said that the proposal will lead to means testing and bureaucracy. He has not listened. Personal advisers will not have to visit all 10 million pensioners. Of course that is not our proposal. We are doing what his Government did not; we are using the data that we already hold on our computer systems to identify those who are likely to be vulnerable. The personal advisers will visit only those people, who are screened by new technology, so the question is not simply one of bureaucracy.

The hon. Gentleman said that there will be a massive increase in means testing. Presumably he opposes the measure, but he has no proposals to stop the poorest pensioners falling behind, and none to tackle the problem of the 1 million pensioners who, under his Government, fell through the net altogether.

The measure has nothing to do with the devastating effects on the incentives to save, which were caused by the rip-off of private pensions, in which £1 in every £4 was eaten up in costs and administrative charges. The devastating effect on personal pensions was caused by the scandal of pension mis-selling. This is a practical, sensible and socially just proposal for giving immediate help to those who are most in need, and we are right to make it.

The hon. Gentleman talked about overall spending figures. He made two points. He accused us of being misleading about the figures, and he took issue with the overall spending plans. He said that we had hidden social security administration figures. We have not; they are not hidden. They are on page 16 in table 1 of the comprehensive spending review, clear for all to see. Those figures cover three years.

The hon. Gentleman said also that the working families tax credit was an accounting fiddle and a broken promise. It is not; it is a promise being kept, to give more help to low-income working families and to make sure that work pays as part of our welfare-to-work programme.

Mr. Duncan Smith: The Government have fiddled the figures.

Ms Harman: We have not fiddled the figures. There are times when figures move, as they did under Conservative Governments, from the social security budget to the health budget, from health to social security and in and out of the tax system.

I shall give examples. Did not the hon. Gentleman's Government remove spending on residential care in nursing homes? That was switched from the Department of Social Security to the Department of Health under community care. We did not argue that it should be put back into the DSS figures. It moved from the social security budget and the same amount was dealt with under community care. The Conservatives removed the cost of statutory sick pay from the social security budget. We did not argue that it should put back, because it was being paid differently.

We are restructuring the help that we give to low-income families in work. We are rightly paying that money through the tax system as part of a major reform of tax and benefit. All the figures are there to see, and we have accounted for them properly and publicly.

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The hon. Gentleman talked also about the level of social security spending. Under the Conservatives--we have their record on which to judge them--the social security budget rose from 9.7 per cent. of gross domestic product to 12 per cent. Under this Government, it is set to fall from 12 per cent. to 11 per cent. While the social security budget was increasing in cash and percentage terms, poverty was also increasing. There was less help for those who needed it, but extra help was being given overall because more people depended on benefits who could and should have been in work. That is why we have said that we shall cut the cost of social and economic failure.

We shall invest, through the new deal, in opportunity and help those who can to work. All the lone parents who have gone to work under the new deal are, on average, better off by £39 a week than they were on benefit. That is tackling poverty. However, their benefit dependency has also decreased by £42 a week on average. That is our approach. We are investing in opportunity and cutting the cost of social and economic failure. At the general election, we set out what we would do to tackle poverty and social exclusion and to broaden opportunity. We said that social security would be part of reforming the welfare state. We have done that.

Mr. Malcolm Wicks (Croydon, North): Despite the icy-hearted response from the Conservative Front Bench, a great number of British people will applaud the measure to support citizens, many of whom are in their 80s and 90s, who are not only some of the most decent people in this country who have served us so well over the years, but some of the poorest.

However, I have a suggestion. As personal advisers will be calling on that group, could we ask them also to find out whether they are missing out on other parts of the welfare state, such as insulation grants--some elderly people make a choice in winter between eating and heating--and to advise them about the new free eye tests? Those are just two examples. The personal adviser system will be relatively expensive, and rightly so, but could we use it more generally as a human access point for the wider welfare state for people who ask so little but deserve so much from the rest of us?

Ms Harman: My hon. Friend makes a very important point. The pensioner personal advisers--I pay tribute to the work that they are doing--are changing the face of social security and bringing help to people who have fallen through the net. They also advise on free eye tests and insulation grants.

Yesterday, I spoke to one pensioner and her personal adviser in Wales. She had a problem with another bill altogether--she was told that she owed more than she did--and her personal adviser helped her to sort it out. It is an overall service that helps vulnerable people with their problems and gets them help in their own homes when they need it. It is less expensive than spreading help thinly to all pensioners, although we are concerned about all pensioners: that is why we are providing free eye tests, concessionary travel and winter fuel payments and will retain the basic state pension as a foundation of income in retirement. However, we must get extra help to the very poorest.

Mr. Steve Webb (Northavon): Unlike the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith),

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I congratulate the Secretary of State, first on not keeping the Prime Minister's pre-election promise to cut welfare spending, and secondly on focusing help on poorer pensioners, about whom I have made representations on many occasions.

I welcome her statement this morning, but does she accept that, when history comes to judge the first two years of the new Labour Government, it will view them as a wasted opportunity because of the unnecessary adherence to Tory spending plans? Does she accept that, for many very elderly pensioners who are in the last years of their lives, two years is too long to wait? Would it not have been better as an immediate measure to increase the basic state pension for all older pensioners so that people got the money straight away?

Does the Secretary of State propose to link the proposed pension guarantee to earnings or prices? We very much welcome the above-inflation increase next April, but beyond that what will happen? If it is not linked to earnings, first, the Government will break their manifesto pledge that pensioners would share in general prosperity, and, secondly, the growth in pensioner income inequality that the Secretary of State professes to oppose will continue. So I hope that she will reassure us that it will be linked to earnings.

Finally, does the Secretary of State believe that she is subject to the Trade Descriptions Act? Can the minimum income guarantee to which she referred justify the word "guarantee"? For want of a better word, is it guaranteed, or is it the case that, even when the so-called guarantee is in place, tens of thousands and probably hundreds of thousands of pensioners--particularly those who are not claiming benefit--will still miss out, so that it is not a true guarantee?

Ms Harman: Before the election, my right hon. Friend the Prime Minister promised to cut the cost of economic and social failure--the cost of people who depended on welfare and benefits but who could and wanted to work--and that is what he has delivered. I am happy to acknowledge that the hon. Gentleman and many of his hon. Friends have urged that we should give extra help to the poorest pensioners and criticised an approach that simply gave help to all and allowed the poorest to fall further behind. I acknowledge the part that his arguments have played in the change.

Reform of the welfare state has been under way since we took office. Last July I set up the new deal for lone parents. That is welfare reform, extending opportunities to those who did not have them before in order to increase their incomes and cut the cost of economic and social failure.

We started pensions reform very shortly after taking office, by investing millions of pounds in establishing pilot projects. We would not be in a position to target help nationally to the poorest pensioners had we not conducted piloted projects. The previous Government made no attempt to help the poorest pensioners. As soon as we were elected, we set about establishing pilot projects in order to be confident that we could take the policy forward. We are not announcing the start of activity, but going national on activity that we have been piloting, and I hope that the hon. Gentleman acknowledges that.

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The hon. Gentleman asked whether the minimum income would be guaranteed. That is an important question, as it goes to the heart of the issue--those who are falling through the net altogether. We have not simply announced an increase and said that it is there for those who can get it; we shall make sure that we get it to those who need it through our system of data matching and personal advisers. We are investing in a new delivery system. It would have been the utmost cynicism to announce in the House a guaranteed minimum income for pensioners who were already identified and claiming income support. It is right that at the same time we are introducing a new delivery system to reach something like 1 million forgotten pensioners.

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