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3. Mrs. Sylvia Heal (Halesowen and Rowley Regis): What support his Department is providing forcarers. [102929]

The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): Invalid care allowance and the carer premium in income support are specifically designed for carers, who may be entitled to other more general benefits, depending on their circumstances.

Mrs. Heal: Is my hon. Friend aware that the position of carers can be improved not just by those benefits, important though they are to carers, but by improving the help that is available to the disabled people for whom they care?

Mr. Bayley: I agree with my hon. Friend. Measures that help both deserving groups are especially valuable. I am therefore particularly pleased to announce extra help for disabled people who have to spend time in hospital. The change will also benefit carers. I intend to lay regulations to provide that people receiving disability living allowance or attendance allowance will be able to receive benefit for the days both of admission to, and discharge from, hospital. The regulations will also ensure that all disabled people receiving DLA or attendance allowance who pay the full cost of their care and residential accommodation, however it is owned or managed, will be eligible for benefit.

Mr. David Ruffley (Bury St. Edmunds): Can the Minister explain why someone who is on income support, reaches the age of 65 and wishes to become a carer should not be allowed the carers premium? Is that not an outrageous example of ageist Government policy?

Mr. Bayley: Benefits for carers were introduced by the previous Labour Government under Jim Callaghan. In the 18 years in which the Conservatives were in power, they followed a policy that was adopted before they came to power: that an income replacement benefit, such as invalid care allowance, should not be paid in addition to another income replacement benefit, such as retirement pension. That policy was operated under the previous

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Conservative Government, the previous Labour Government and the current one, and there is no intention to change it.

Mr. Jeremy Corbyn (Islington, North): The Minister will be well aware that caring is a difficult job and hard work; that many carers are themselves elderly; that provision of respite care is desperately important for all of them; and that there seems to be no national basis for the respite care provided by local authorities. Is he prepared to examine the current situation--in which different standards of respite care are offered--and ensure that every local authority is required to provide sufficient places, so that every carer is able each year to have at least a few weeks away from having to care for the elderly, the disabled or people with learning difficulties?

Mr. Bayley: My hon. Friend raises an important point. I am glad to say that my colleagues in the Department of Health have improved availability of respite care by making available an additional £140 million as part of the national carers strategy, and that they are creating a charter for long-term care to address the type of issues raised by my hon. Friend. Additionally, the measure that I announced today--which will reduce the amount of benefit lost by those who go into hospital for respite care--will make respite care more generally available.

Mr. Eric Pickles (Brentwood and Ongar): Although the extra two days are welcome, Opposition Members were disappointed with the Minister's response to my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley). Substantial change is occurring within the population, and, in the next 10 years, the greatest challenge facing people in care will be the number of carers who are themselves relatively elderly, but who take care of frail parents or look after disabled children. If the state were to provide that care, the bill would be considerable. Surely it would make sense to help those people to continue to care by getting rid of the age restriction of 65 on invalid care allowance and carers premium. Will the Government reconsider their position?

Mr. Bayley: Invalid care allowance was introduced as a benefit to replace the income of people of working age who were forced to give up full-time work because they were caring for someone who needed care for more than 35 hours a week. It is a benefit for people of working age: it was introduced for that purpose, and it has always been a benefit for that purpose. In the 18 years in which the previous Conservative Government were in power, they did not seek to change the benefit. I am surprised that, having done nothing about it in their 18 years in office, they have suddenly changed their mind.

Mr. Gordon Marsden (Blackpool, South): I welcome the new initiatives that my hon. Friend has announced today. They will make a considerable difference to people in my constituency, many of whom are elderly or disabled carers. However, I underline the important point made by my hon. Friend the Member for Islington, North (Mr. Corbyn). There is somewhat--to put it mildly--of a lottery in local authority social service provision for carers. Will the Minister, in addition to making available

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the funds that he announced today, ask his officials to consider encouraging--if encouraging does not work, requiring--local authorities to take the matter on board?

Mr. Bayley: My hon. Friend is right to raise that point. The Department of Health is responsible for making services available to carers and for social services policy throughout the country. I have no doubt that Health Ministers will take note of what has been said in the House today. They are already acting on the basis that my hon. Friend suggests.

Advance Corporation Tax

5. Mr. Tim Loughton (East Worthing and Shoreham): What discussions he has had with the Treasury on the effect on pensioners of the abolition of the ACT dividend tax credits. [102931]

The Secretary of State for Social Security (Mr. Alistair Darling): The Government withdrew the tax credits as part of a wider package of reforms that will help companies and benefit the economy overall.

Mr. Loughton: Will the Secretary of State come clean and acknowledge that one of the most iniquitous effects of the Government's stealth tax on pensions was to deprive the less-well-off pensioners who are not liable for tax of a few hundred pounds in tax credits, on which many of them greatly depended? Will he stand by his soundbites about giving a fairer deal to poorer pensioners and lobby the Chancellor hard to give back those ill-gotten gains to the 300,000 poorer pensioners who really need them, including many in my constituency?

Mr. Darling: The changes that we made after the general election have been widely welcomed because they will benefit companies and the economy overall. [Interruption.] The shouts from the Conservatives would have more credibility if they were committed to restoring the previous ACT system--I do not think that they are. Since the abolition of ACT in 1997, there has been a positive cash flow of £1 billion to business. In addition, because of the action that we have taken, two thirds of pensioners do not pay income tax. We have taken 200,000 pensioners out of tax and 1.5 million pensioners will benefit from the extension of the 10p starting rate of income tax by an average of £55 a year. Every one of those measures was opposed by the Conservatives.

Mr. Paul Goggins (Wythenshawe and Sale, East): Is not one of the most effective ways of helping pensioners with modest incomes to take them out of the tax system? Will my right hon. Friend continue to press his Treasury colleagues for above-inflation increases in the pensioner's personal allowance?

Mr. Darling: As my hon. Friend said, the Government have done a great deal to help those pensioners who previously paid tax. Two thirds of pensioners now do not pay tax. We have taken 200,000 pensioners out of tax. Across the board, regardless of whether pensioners pay tax, the Government are honouring their manifesto pledge to ensure that pensioners share in this country's rising prosperity, not just through the tax system but through the

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winter fuel payment, the minimum income guarantee and other measures that help them a great deal. That help was never there under the previous Tory Government.

Mr. David Willetts (Havant): Does the Secretary of State agree with his former ministerial colleague, the right hon. Member for Birkenhead (Mr. Field), who was a Minister at the time that the changes were introduced? He says that they imposed a £2.5 billion tax hit on pension funds in 1997-98. If the Secretary of State does not agree, will he give his estimate of the impact on pension funds of that horrific change in their tax treatment? Of all the Government's stealth taxes, is not that the biggest and the worst?

Mr. Darling: The hon. Gentleman's protestations would have more credibility if he were committing his party to the restoration of the ACT system. I do not believe that business in this country wants another change to corporation tax. As a result of the changes that we have made, there has been a £1 billion cash advantage to businesses and we have the lowest-ever rate of corporation tax. That has increased the profitability of companies. On top of that, we have a healthy and stable economy and an end to the boom and bust that characterised the Tory years. Most businesses welcome the way in which we are running the economy. By helping businesses and the economy, we help pensioners as well.

Mr. Willetts: I asked a simple, factual question to which we are still waiting for an answer. If the Secretary of State will not take responsibility for pension funds as a whole, will he at least accept some responsibility for the ACT burden that he has imposed on public sector funded pension schemes? Will he confirm the figures in Pensions Week today that show that local authority pension schemes around the country face enormous extra charges because of the change in the tax regime: £30 million for Greater Manchester; £33 million for Cornwall and £75 million for Staffordshire? We will find that, along with the pensioners referred to by my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) and future pensioners, council tax payers will pick up the tab for the hefty increase in tax on pension funds. However, we do not have a simple answer to a simple question about how big the tax hit is.

Mr. Darling: The answer is that our tax changes will benefit the economy and companies in this country and, because of that, will benefit pensioners and pension funds. We have reduced the rate of corporation tax, and we have some of the lowest interest rates that this country has seen for years. We have a benign economy that is helping companies to increase their profitability, and that will help pension funds. The changes that we have made are in the best long-term interests of the economy. I assume that the hon. Gentleman is saying, on behalf of the Conservative party, that he intends to scrap the system and go back to the old one. That would be another reason for British business to regard the Tories as hopelessly out of touch with the needs of this country.

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