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Ms Joan Walley (Stoke-on-Trent, North): Will my right hon. Friend take account of the fact that in someof our manufacturing heartlands there is greater unemployment? In my area, we have lost 2,300 jobs in the past 12 months. Will the study take account of the people who are out of work and cannot qualify for IB, although they may be unfit and could be eligible in other parts of the country? Will the Government consider linking the benefit to jobseeker's allowance?
Mr. Darling: My hon. Friend has taken the trouble to send me some very detailed proposals and I repeat that I will certainly consider them, but I do not want to give undertakings that I cannot deliver. My point was that we need to consider the cases in which people do a very limited amount of work for which they get no credit whatever. The clear message must be that if people are able to work and make that effort, we should be able to reward them.
The fact that we intend to take some account of occupational pensions when considering claims for incapacity benefit is the change that has been the subject of the most attention today. When I have explained the background, I will be happy to answer questions from right hon. and hon. Members.
In 1953, 28 per cent. of people had occupational pensions; now the figure for men is 86 per cent. and for women working full-time about 77 per cent. We have to bear in mind that nearly half the people who retire early on IB, with an occupational pension, are in the higher income bracket--in the top 40 per cent. It is right in principle that there should be a partnership between individuals and the state to share in providing for early retirement because of sickness or injury. There must be an insurance against such early retirement. We should take account of the changed circumstances and create that partnership.
If one were designing a system today, one could not and would not ignore the fact that, for example, almost 100,000 people on IB have an average pension of £230 a week, with incapacity benefit of £66 on top. I do not regard those as the most vulnerable people, as the hon. Member for Newbury (Mr. Rendel) said. We are taking account of the fact that people are making their own provision for the eventuality. The principle of partnership, allowing us to direct more resources to people who need the help, seems right to me.
The change will affect only a minority, who will, after all still be £50 a week better off than if they were getting IB alone. I believe that that approach is right. During the debate, many hon. Members expressed concern about the £50 threshold and its taper.
Dr. Lynne Jones:
My right hon. Friend omitted to mention that 140,000 people on IB have a pension of between £50 and £100 a week. They will be penalised by the changes. He also did not mention that only a third of disabled people--much lower than the average--have occupational pensions. He talks about people being in the higher income bracket. Will he confirm that that includes disability living allowance, which is supposed to recognise such people's additional costs? If we took off that amount, they would be unrepresented in the higher income bracket.
Mr. Darling:
I am grateful to my hon. Friend, but possibly not in the way that she intended. She was leafleting us in the Lobby last night, and I was handed a copy of the leaflet by a well wisher. The figures I have quoted do take account of the DLA. When the Government consulted on the figure of £50, we took account of the fact that 80 per cent. of people on IB have incomes of less than £50. The vast majority will therefore not be affected by the proposal. The Bill will not come into force until April 2001, and it was with that in mind that I told the House earlier this year that
Mr. Chris Mullin (Sunderland, South):
My right hon. Friend rightly identifies this issue as one on which Labour Members feel much unease, including those of us who feel we can live with targeting. What assurance can he give us today that the concern expressed in the House has been listened to?
Mr. Darling:
Concern has been expressed, which is why I said in February that I would keep the issue under review. I will have to lay regulations bringing in an appropriate figure towards the end of next year. I assure my hon. Friend that I shall listen to what people have to say. I am bound to consult on the matter and I shall propose a number to the House that I believe is fair and reasonable. I have no hesitation in giving my hon. Friend the assurance he seeks.
Mr. Mullin:
For the avoidance of doubt, I wish to confirm that my right hon. Friend is saying that the £50 that is presently proposed--and the rate of clawback--could be adjusted when he brings the regulations to the House in around a year's time?
Mr. Darling:
I said that on 23 February. The number does not appear in the Bill because it was always within
Dr. Nick Palmer (Broxtowe)
rose--
Dr. Desmond Turner (Brighton, Kemptown)
rose--
Mr. Darling:
I shall give way to my hon. Friend the Member for Brighton, Kemptown (Dr. Turner) and then I must make some progress, because my hon. Friend the Member for Kingswood needs to reply.
Dr. Turner:
I am glad to hear that my right hon. Friend has plans to be flexible about the level and the tapers, but will he explain why the only income that will be taken into account for means-testing purposes is pension income to which the person has contributed?
Mr. Darling:
It is because people contribute to their pensions and other such savings precisely to make provision for such contingencies. I repeat that it is right that there should be a partnership between individuals and the state to make provision in such cases, although I recognise that some of my hon. Friends disagree with me--[Interruption.]
Mr. Deputy Speaker:
Order. The Secretary of State would assist me if he faced the Chair. Interventions are not helpful at this stage [Hon. Members: "Oh!] I am talking about sedentary interventions. I request some quiet while the right hon. Gentleman is delivering his speech.
Mr. Darling:
I would dearly love to give way to my hon. Friend, without any knowledge of what he is going to say, but as I refused to take an intervention from two of my hon. Friends earlier, I cannot give way to him.
I want to cover one further point, spending--[Interruption.] Conservative Members do not like that one bit, and that is why they are heckling. Let me put the Bill in context. This year, we will spend £25 billion on benefits for the sick and disabled. The sum will increase by about £2 billion during this Parliament, mainly because of the growth of disability living allowance.
I ask the House to consider our proposals in the round, including the proposal to give carers and disabled people with broken work records access to the new state second pension, which will be of great benefit to low-paid people. Someone earning £6,000 a year at present who is on the state earnings-related pension scheme would receive only £13 a week as a pension. Under our proposal, that person would receive £46 a week. That is just one example of how the Government, unlike our predecessor, are helping people who need it most.
Our pension proposals will cost a further £2 billion over the years. The whole package that we are proposing and all that the Government are doing for the disabled are, on any view, fair, balanced and right things to do. They are right in principle and they are right in practice. No matter what the Tories say today, they told us at the weekend that they would pay for their tax cuts by slashing welfare handouts, as they call them. We know that there is a £6 billion black hole in their sums.
"the £50 threshold will be kept under review".--[Official Report, 23 February 1999; Vol. 326, c. 222.]
When the Bill was drafted in January, I wanted to ensure that the £50 level, and the taper, could be kept under review, and that is why the numbers do not appear in the Bill. I was determined to ensure that the principle of partnership was clearly established.
5.30 pm
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