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6.27 pm
Mr. Andrew George (St. Ives): I follow the constructive contribution of the hon. Member for Hemel Hempstead (Mr. McWalter) by drawing attention to the theme of the debate--targeting the poorest, and how best we can do that. That is largely a technical matter. We may disagree on policy, but we on the Liberal Democrat Benches do not question the Government's intention.
In my brief contribution, I shall deal with take-up, following an earlier intervention from the hon. Member for Gedling (Mr. Coaker), whom I welcome back to the debate. We are discussing not merely an increase of 75p a week in the basic state pension but, according to the Government Actuary's report, a low increase of 1.1 per cent. across the board--for example, in jobseeker's allowance.
Personal benefit for those aged 18 to 24 will increase from £40.70 to £41.35, an increase of 65p, and personal benefit for those aged 25 and over will increase by 80p. Incapacity benefit will increase by 65p. We have not done justice to the fact that there are groups other than pensioners who face relatively low increases in benefit income.
The Government rightly want to find mechanisms to encourage people into work and off benefit. In the context of housing benefit, we are considering not simply those who are unemployed, but those who are in work on low incomes. They sometimes have the opportunity to do overtime, or to improve themselves, but the housing benefit system provides little incentive for them to do that. Several hon. Members have commented on the fact that the steepness of the tapers adds to severe social problems.
My constituency includes people on some of the lowest incomes in the land. Many people are already employed, but find that taking up overtime is hardly worth their while. For example, a constituent recently told me that doing overtime as a school cleaner because of another member of staff's illness was hardly worth while. Newspapers report today that there is some debate between the Department of Social Security and the Treasury about the possibility of an announcement on tapers. Such an announcement would be welcome. It would be helpful to hon. Members who take a deep interest in the matter if the Minister could throw any light on the press speculation.
I want to consider the take-up of disability benefits. A recent Government report shows an underspend in disability benefits of £754 million last year. That is greater than the effect of the cut in incapacity benefit for which the Welfare Reform and Pensions Act 1999 provides. Earlier, the hon. Member for Gedling referred to concern about the take-up of attendance allowance. Why is there no take-up campaign? The Government said that they were worried about the low take-up of income support generally. That applies especially to those who are elderly and disabled. Those who are eligible should claim attendance allowance. However, Government research shows that between 40 and 60 per cent. of eligible applicants claim. That means that a potentially large group does not. The figures are vague, but almost half of those who are eligible for attendance allowance do not claim it.
It is worth stressing that we are considering not only the poorest of the poor but those who are especially socially excluded: those who have neither the income nor the ability to go out. A recent Government report drew attention to that. The Government claim that pensioners are a priority, and we agree. However, little is being done to encourage those who are elderly and disabled to take up attendance allowance. I hope that the Minister will deal with that point, and, if he can, commit the Government to future plans to tackle it.
Mr. Rooker:
I shall not talk about attendance allowance because the order does not cover it. Attendance allowance is not a national insurance benefit. However,
Mr. George:
I accept the Minister's intervention in the spirit in which it was intended. [Interruption.] I am stimulated to refer to attendance allowance because, as my hon. Friends are pointing out, the order refers to it. I stress that we are considering one of the most socially excluded groups in the country. I am sure that the Government agree that we should concentrate on that group and do all that we can to ensure that they are enabled to take up the benefits to which they are entitled. I hope that a Labour Government want to take action to remedy previous Governments' failures to deal with the matter.
Mr. Rooker:
The hon. Gentleman homed in on attendance allowance and was right to say that take-up is low. However, unlike pensions and other contributory benefits, and minimum income guarantee, which is means-tested, another group of benefits are not means-tested. The reasons for the low take-up cannot, therefore, be stigma and other reasons that are associated with minimum income guarantee. The reasons for the take-up of various benefits are different. We are considering a serious matter, which must be addressed, but stigma cannot be responsible for the low take-up of attendance allowance.
Mr. George:
I agree with the Minister. There is no reason to hang back on promoting attendance allowance. Department of Social Security research report 94, which was published in July last year and entitled "Disability in Great Britain", referred to a survey on the number of outings that disabled older people made. They were asked how many outings they had made in the past four weeks. The report said:
Mr. Jeremy Corbyn (Islington, North):
I am disappointed that there are not more hon. Members present; it seems that, on a Monday evening, the House of Commons is as empty as the millennium dome.
I want to consider two matters: the effect of social security on poverty, and the uprating of pensions. I represent an inner-urban area that is variously described as chic, wealthy and the home of new Labour; and as a centre of poverty and unemployment. It might be all of those things. An inner-urban area with high rates of unemployment inevitably has high levels of poverty.
In some schools in my constituency, 70 per cent. of the children receive free school meals. That is possible only if parents are on income support.
Statistics show that my constituency has one of the highest long-term unemployment levels in the United Kingdom. That is due to a combination of the loss of manufacturing industry and small workshop industries; to increases in IT-related industries; and to the fact that many people do not have appropriate skills for such jobs. It is advantageous for an employer to sell anything resembling a workshop or manufacturing unit anywhere in inner London for private housing development, which they can do at phenomenal prices. That is a product of the property boom, to which I shall return shortly. There is a paradox: there is a property boom and huge profits are being made from speculation, but that does not benefit local people on housing waiting lists and it helps to create high unemployment.
The effect of social transformation in my area of inner London is not that different from the effect in many other areas around the inner-London ring, such as Tower Hamlets, Hackney, Camden, Lewisham and Lambeth. The poorest people cannot get council housing or housing association property because there is hardly any investment in them. Last year, the princely total of 200 new affordable rented properties were created in the whole borough. The housing waiting list is about 10,000. The transfer list is about 12,000. An unknown number of single people cannot even register to get on the council house waiting list in the first place.
Younger people either have to pay high private rents to get a place to live or move out of the area. In turn, that creates a sense of isolation and anger among the elderly who no longer have extended family networks around them or the joy of meeting or seeing grandchildren frequently. They live increasingly isolated lives and one detects a degree of bitterness about what is happening in their community. I realise that the social security system cannot address that issue, but the debate is about social security, so I want to discuss it. The other aspects of Government policy that impinge on poverty have to be considered within the system.
I am not altogether critical of a lot of what the Government have done in areas of poverty. The introduction of the minimum wage has had a good effect in my constituency, even though it is not one of the lowest-paid in the country. The working families tax credit has likewise had an enormous impact--a lot of people have benefited from it hugely--as have the single regeneration budget and the support provided through the new deal, which has enabled people who have been on benefits in the long term to return to work.
However, I am worried about those who are removed from benefit altogether because they fail the actively seeking work test or a restart interview. I am disturbed that a large number of people are on no benefit whatever and have poor lives. They end up homeless or on the streets as they refuse to undertake training courses that they believe are inappropriate for them. Perhaps my right hon. Friend the Minister will deal with that in his winding-up speech. That is the downside of the effort to reduce the number of people on benefit, and it must be addressed seriously. People disappear from the statistics altogether because they are no longer on benefit, seeking work or claiming anything. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), the Chairman of the Social
Security Committee, is present, and I hope that his Committee--and the social exclusion unit--will take that on board and consider it seriously.
I welcome the money being spent on the single regeneration budget, which is specifically targeted on inner-urban areas of great poverty where long-term unemployment is a problem and a large proportion of the population are on income support. In parenthesis, I stress to my right hon. Friend the Minister that that has to be accompanied by significantly greater public sector investment in good-quality rented housing--otherwise, all the problems that I have described simply will not go away.
The order that we are asked to approve mentions housing benefit tapers. A few Members have referred to them and to the whole system of housing benefit. I was a local councillor when housing benefit was introduced and its administration was rather unfairly put on local government which, by and large, is not particularly well equipped to administer what is in effect a social security benefit. Indeed, if the experience in my own community and neighbouring London boroughs is anything to go by, the administration is something akin to abominable or appalling--depending on whether I am in a good or very good mood when I describe it. Indeed, the administration of a company named IT Net, which operates in Islington and Hackney, is so poor that a large number of people have been threatened with eviction because their rent is allegedly in arrears, although they are not in arrears at all. The incompetent delivery of housing benefit puts them in arrears and they are therefore threatened with eviction. Many such people have been evicted by that company on behalf of private sector landlords.
I look to my right hon. Friend the Secretary of State to consider a number of issues such as the cost to local authorities of administering housing benefit. Local authorities pay a direct penalty, as administration represents a cost unless they are fantastically efficient. If they are lucky, they may achieve a nil deficit. There is a positive disincentive to administering housing benefit in the way that it ought to be administered.
I also want to refer to the sum that society spends on housing benefit, which is absolutely phenomenal. Very high rents apply in inner-London areas and possibly in the inner-urban areas of other cities. The normal council rent for a two-bedroom property might be about £70 or £80 a week, but a house sold under the right-to-buy scheme and let out privately could be rented out for £150, £200 or £300 a week. Often, that is paid by housing benefit. House A, which receives housing benefit, might cost £80 a week, but house B could cost us, the community, two or three times as much because the right to buy was exercised some years ago. Private rented one-bedroom flats cost £150 week, and houses £400 a week. Through the rent deregulation introduced by the Tories, the housing benefit system is creating property millionaires through public sector expenditure.
I look to my right hon. Friend the Secretary of State to do something about that. He must be prepared seriously to consider the reintroduction of rent controls and the need for investment in good-quality public sector housing. We are pouring money into the pockets of landlords when we ought to be putting it into bricks and mortar to house people in desperate need. Those issues are extremely important.
I have spent many years working with the Islington Pensioners Forum and am pleased to have been able to do so. I work also with the Greater London Pensioners Association and the Greater London Forum for the Elderly, which meets quarterly in the House. When one considers history, one sees the great determination of 110 or 120 years ago which eventually led to the introduction of the state old-age pension in the Lloyd George Budget. [Interruption.] Before the Liberals get completely carried away, I have in my possession a book entitled "No Thanks to Lloyd George: the Introduction of the State Old-Age Pension", which was presented to me by the Highbury Pensioners Forum. Apparently, the old charlatan had to be driven to it at the last moment; he had not the slightest intention of doing it. I shall leave that for a Liberal Democrat history workshop. I should be happy to come along and discuss the whole question with them. We could have a fascinating debate.
The old-age pension was introduced about 100 years ago--essentially as a result of pressure from radical groups such as Churches, trade unions and elements of the Liberal party--and began fairly modestly. As a proportion of average earnings, it fell at various times and at one point was worth very little indeed. The great reforms in the pension system occurred in 1975 when Barbara Castle and Brian O'Malley introduced a Bill that linked the state pension with earnings and recognised that a large number of people in work were not eligible to enter an occupational pension scheme because they were part-time, on short-term contracts, or working for a company that did not have such a scheme. SERPS was developed to take over from previous schemes that were meant to mop up those who were not covered.
The incoming Tory Government inherited a good situation. By 1980, the state pension was rising in line with earnings and the number of people with access to either a low or a nil-contribution occupational pension was very high indeed. Former Chancellor Geoffrey Howe described the abolition of the link between the state pension and earnings in 1980 as his greatest achievement. A great achievement it certainly was: as a result of that single act, the state pension as a proportion of earnings has been reduced from about 24 per cent. in 1980-81 to about 14 per cent. at present--if my memory serves me correctly.
A Bill that the right hon. Member for Huntingdon (Mr. Major)--the former Prime Minister--helped to guide through the House as a junior Social Security Minister in 1986 falsely claimed that SERPS was unsustainable, and therefore must be revalued. The purpose of that Bill--which became the Social Security Act 1986--was to create a market for the private pensions industry.
After 18 years of Tory Government, we have a state pension linked to prices rather than earnings, which has fallen dramatically in value. We have also seen a massive mis-selling of private pensions as a result of the 1986 legislation. I think there is a good deal of common ground between the Liberal Democrats and Labour: both parties believe that the situation is appalling, and that the poverty of many pensioners must be addressed.
Pensioners whom I meet are extremely angry about their lot. They are angry about their poverty; they are angry about being told that they will receive an increase
of 70-odd pence this year; and they are angry--I think they are right to be so--about something else. They have contributed to national insurance-related benefits all their lives, and their generation created the welfare state consensus of the post-war period. They now feel that they are being sold something that they do not want: something that should be very different.
"over 40 per cent. of the most severely disabled people (severity 9-10) and a quarter of disabled people aged 70 and over had not been out shopping, to visit family or friends or on any kind of excursion in the four weeks prior to interview. A quarter of more seriously disabled people said they would make more outings were help available or facilities better."
That is a matter of shared concern. I am not criticising the Government; it is helpful that they undertook the research.
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