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Habitual Residence Test
10. Ms Oona King (Bethnal Green and Bow): If he will make a statement on the habitual residencetest. [68015]
The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): Our review of the habitual residence test is on-going. We shall make our recommendations for its future once we have received and considered the judgment of the European Court of Justice in the case of Mr. Robin Swaddling, which is due to be given on 25 February.
Ms King: I thank my hon. Friend for that reply. Is she concerned by claims that, although the Government save about £30 million annually by refusing claimants under the habitual residence test, an almost equivalent amount is paid out to families facing destitution under the Children Acts and the National Assistance Act 1948? Moreover, many people on benefit are discouraged from seeking employment in the European Union because of the risk of losing benefit when they return. Will the review take those two points into consideration?
Angela Eagle: We should remember that 89 per cent. of United Kingdom nationals who take the test pass it, and that 85 per cent. of all those who take it pass it. My hon. Friend will remember as well as I do the test's origin--a certain singalong performance at Tory party conference a few years ago. We shall consider the points that she has raised--especially in the light of the European Court of Justice statement, on 25 February--and continue to investigate how best we can balance the right of United Kingdom taxpayers not to subsidise people with very little connection to the United Kingdom with the understandable rights of United Kingdom citizens.
Mr. Nicholas Soames (Mid-Sussex): Does the hon. Lady consider that issuing identity cards would make that type of work much easier?
Angela Eagle: The identity card issue is really one for my right hon. Friend the Home Secretary. However, on the habitual residence test, the benefit of changing policy to quite the extent suggested by the hon. Gentleman would be like using a sledgehammer to crack a nut.
Consultation Papers
11. Dr. Lynne Jones (Birmingham, Selly Oak): If he will publish summaries of responses to his Department's consultation papers. [68016]
The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): Lists of those organisations and academics who responded to our consultation papers, excluding those who requested
confidentiality, have been placed in the House Libraries. Copies of their responses are available on request from the Department.
Dr. Jones: Will my hon. Friend confirm that submissions to Government consultations are all read, that his Department collates them and that an assessment is prepared for Ministers' consideration? If that information is readily available--as one would expect, otherwise Government consultations would be shown to be a sham--and the Government are committed to openness and transparency, what is the problem with publishing it? Will he publish his Department's assessment of responses to Green Papers, including the important welfare reform Green Paper?
Mr. Bayley: All the responses are read and considered by the Government; they inform Ministers' decisions. Summaries of the sort that my hon. Friend suggests are not prepared for Ministers. Any summary that the Government published could not give a totally balanced view. It would inevitably be open to the criticism that some important comments had been excluded or that a Government gloss had been put on others. We believe that all the comments should be available. I believe that my hon. Friend has requested copies of 49 of the submissions that have been made. We can make them available to others who request them.
Mrs. Theresa May (Maidenhead): Is the Minister aware of the responses made to his paper proposing changes to disability benefits by representatives of the Disability Benefits Consortium at a meeting in the House before Christmas? The Government's proposals to means-test incapacity benefit were described as a betrayal and one disabled person said that he was incensed that, although the Government were encouraging him to save for a pension--which is often difficult, given that a disabled person may not have the same working pattern as others--he would now find them putting their hands into his pocket and taking some of that money away. Will not the Government's proposals result in some disabled people having their incapacity benefit cut and many failing to qualify for it? If he does not receive summaries of all the responses to his Green Paper, can the Minister be sure that he has taken all the comments into account? If he does not, what kind of consultation is it?
Mr. Bayley: I have read the consortium's views. I should be a foolish Minister not to do so when forming an opinion on the views that have been submitted. It would not be sufficient simply to look at a summary. One needs to consider the whole document.
The changes to incapacity benefit are an attempt to modernise the system and target resources where they are most needed. The majority of people save for their retirement through a pension. Some 86 per cent. of men in full-time jobs and 77 per cent. of women in full-time jobs do so, as do a far higher proportion of women in part-time jobs than was the case when out-of-work sickness benefits were introduced. It is not sensible to ignore the provision that people have made for themselves. Those who make their own provision will be considerably better off. The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) always talks about means testing. He is as wrong now as he has been in the two recent debates.
Savings (Retirement)
12. Mr. Ian Pearson (Dudley, South): What proposals he has to encourage saving for retirement. [68017]
The Minister of State, Department of Social Security (Mr. Stephen Timms): The reforms described in the pensions Green Paper published on 15 December should raise the incentives to voluntary saving through better-quality, better-value second pensions and restructured state support.
Mr. Pearson: I congratulate the Government on the pensions Green Paper. It is about time that someone grasped the nettle of modernising this country's pensions industry. I am confident that the proposed new framework will be a major improvement. When working out the detail, will my hon. Friend ensure that those who change their jobs frequently or take career breaks are not penalised and are given effective options? Will he also ensure that the Government lead the way and build in a right to an employer contribution to a pension plan for any employment funded indirectly through grants, such as the single regeneration budget programme?
Mr. Timms: My hon. Friend is right. There has long been a need for the changes that we have proposed. For far too many people, a good-value funded pension--or one that they can access on reasonable terms--is not available, and they are exactly the people at whom the stakeholder pension is aimed. We are committed to ensuring that everybody who can afford to save for retirement should have every encouragement to do so, and the proposed framework will have that effect. I will be happy to have a look at the question of the single regeneration budget, to which my hon. Friend referred.
Mr. Peter Viggers (Gosport): Is it not becoming increasingly clear that the combination of the guaranteed minimum pension and the increase in means testing will mean that many people who have saved for their retirement will be worse off than people who have made no provision for themselves at all? The Secretary of State may shake his head and Ministers may duck and weave, but that is a fact, and the Government are creating a monstrously unfair system. Is the Minister aware that, when people look behind the bland words of Ministers and see the facts, they will be deeply resentful?
Mr. Timms: The hon. Gentleman is mistaken. The aim of the framework proposals is that those who are able to save should do so, but that there should be security for those who are not able to save. The state second pension is a 100 per cent. contributory scheme which will ensure that everyone who has worked and contributed throughout his or her life will retire on an income above the minimum income guarantee level, which will mean that he or she has the full benefit of all their savings. There is no disincentive to save; we are increasing the incentive to save. I hope that Conservative Members agree that even the least well-off pensioners should share in rising national prosperity.
Mr. Lawrie Quinn (Scarborough and Whitby): Will my hon. Friend reassure those on low and modest incomes
that the Government's proposals for modernising pensions will target them, and afford them the same support that the vast majority of people in this country get at the moment?
Mr. Timms: My hon. Friend is right. The state second pension will provide modernised support for people on low incomes, and will double the accrual rate on the state pension for people on £9,000 a year. It will treat people on incomes below that level as if they had been earning £9,000 a year throughout their working lives. That will be done on the basis of the existing 4.6 per cent. state earnings-related pension scheme contribution, without any addition. That is a very important step forward for people on low earnings--those about whom my hon. Friend is rightly concerned.
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