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The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): Under the new deal for disabled people, a number of innovative schemes are already testing ways in which both employees and employers can be helped when a person becomes ill or disabled in work. We have also announced plans for job retention and rehabilitation pilots, beginning from next year, which will test the effectiveness of early work- focused employment and health strategies.
Mr. Borrow: I thank my hon. Friend the Minister for that answer, but may I emphasise the need for close monitoring of the way in which Government Departments and employers work together? A disabled constituent of mine was offered a job last summer, but it has taken the relevant Government Departments and the employer until this month to get their act together and ensure that the proper adaptations for a disabled worker were in place. That case may be an exception, but will my hon. Friend ensure that the pilot schemes are monitored closely to ensure better co-ordination in the future?
Mr. Bayley: May I start by paying tribute to the close way in which my hon. Friend works with disability bodies in his constituency? I was there just last week at a meeting that he organised with voluntary bodies representing the disabled.
I can assure my hon. Friend that the access to work provisions made by the Department for Education and Employment work smoothly and efficiently in the vast majority of cases. I am concerned to hear his comments about this particular case, and I am sure that my colleagues in the Department for Education and Employment will look at it. We will, of course, be monitoring our pilot studies very closely.
Mr. Edward Leigh (Gainsborough): Every penny lost through fraud means that less money goes to the genuinely disabled. What is the total amount lost in fraud on the disability living allowance? I ask this question because, according to the recent article in The Economist, the amount is now so large that the Government have stopped calculating it. Indeed, the article calculates that fraud amounts to between £3 billion and £7 billion. There are entire sleeper rings working in the Minister's Department who are garnering information, before they go out to work, to commit fraud. Is this a new form of welfare to work?
Mr. Bayley: The Government are doing things to target disability benefits on those who merit them. We are, as a result, tightening the gateways. However, in relation to rehabilitation pilots, the hon. Gentleman needs to focus on the fact that every week, 3,000 people leave long-term sickness benefits and go on to incapacity benefits. Some 90 per cent. of them remain on incapacity benefits for life, although most would like to get back into work. That is what we are focusing on. We are avoiding the need for people to go on to incapacity benefits.
Ms Helen Southworth (Warrington, South): Along with many of my constituents, I welcome the rehabilitation pilots which will be started next year. I think that they will be very beneficial. As people in employment who become disabled are likely to need considerable health intervention and treatment, will my hon. Friend make sure that
Mr. Bayley: The rehabilitation and retention pilots are a three-way collaboration between the Department of Social Security, the Department for Education and Employment and the Department of Health. They can work only if there is joined-up government between those three Departments. That is how they were conceived, that is how they will work and that is why we believe that we will achieve real results for disabled people.
Mr. Tim Boswell (Daventry): As disability issues should not necessarily be a matter for political controversy, I am sure that the Minister will be as concerned as I am that 3,000 people a week leave the work force for permanent benefit and that the Post Office estimates that a single medical retirement can average some £80,000 of cost to the employer. In addition, there is the evidence of the report last week that ill-health retirement is concentrated in, although not exclusive to, the public sector. Will the Minister therefore bear in mind the experience of the disability pilots, particularly the St. Loyes transformation project in Exeter, which I know that he has visited, and make sure that these roll forward to adoption as soon as is practically possible? In addition, will he ensure that all those involved in providing disability advice to employees and employers have a proper, practical knowledge of the needs of the private sector and of what employers are looking for, showing them that it may well be cost-effective to retain the employee in employment and not simply to rely on benefit, which gives rise to the concerns that have been expressed from these Benches today?
Mr. Bayley: I think that the hon. Gentleman is mistaken to draw a distinction between the private and public sectors. There is good practice and bad practice in both sectors. There is also very different practice between large firms which can carry people on long-term sickness benefits paid by the company, and smaller firms which cannot. The rehabilitation pilots seek to enable all businesses, whether in the public or private sector, to retain the employees they have, in whom they have invested by spending money on their training and building up their skills. At a time when unemployment is so low--the lowest level for 20 years--more and more employers want to retain people because they know that it is so hard to find others if they let employees go.
The Secretary of State for Social Security (Mr. Alistair Darling): Research shows that we inherited one of the highest rates of poverty in the western world. As a result of policies that we have announced so far, we will lift over 1 million children out of poverty as well as tackling pensioner poverty.
Mr. Darling: The new deal for lone parents almost pays for itself, so there would be no great saving if it were cancelled. Indeed, the position would be quite the reverse. My hon. Friend is quite right to say that we inherited a scandal: Britain is one of the richest countries in the world, but the number of children living in poverty trebled during the 18 years to 1997. She was also right to identify the importance of measures to get more people into work. The number of people living in workless households is falling, but it is necessary to do more, such as increasing child benefit.
The Conservative party has a point to answer. The Opposition are determined to find £16 billion in public expenditure cuts. We all remember that they froze child benefit when they were in office, which offers a pointer to the sort of thing that they would do. Those who would suffer are many of the children who still live in poverty and who rely on us to lift them out of it.
Mr. Steve Webb (Northavon): The Secretary of State is right to point to the high poverty that he inherited. On 1 May 1997, many people hoped for a break in the long-term rapid growth of a divided Britain. Does he share my dismay, therefore, at figures produced by his Department last week showing that the trend continues, particularly among pensioners? How confident is he that the measures that he has introduced since those figures were published will reverse the trend and return pensioner poverty to the level that he inherited? Over what time scale will we begin to see serious inroads into the problem?
Mr. Darling: Let me deal with the point on pensioners. The hon. Gentleman is right to say that the number of pensioners living in poverty has risen slightly. The reason is that although the proportion of pensioners living in poverty remains exactly the same, the pensioner population is increasing. He has not mentioned, however, that the minimum income guarantee and other measures were introduced only from April 1999 and do not, therefore, affect last week's figures.
We knew that many pensioners were in poverty. That is why we introduced the minimum income guarantee. If we had provided an across-the-board increase, we would not have solved the problem of pensioner poverty. The measures that we have introduced will do so. Year on year, people will see improvements as we reduce the number of pensioners living in poverty. In addition, we
Mr. Michael Connarty (Falkirk, East): I am glad to hear the Secretary of State focus on pensioner poverty. I support the minimum income guarantee, which I, like others, have pushed hard in my own constituency. Does he accept, however--as I have said to him privately--that other measures such as the heating allowance are, according to the pensioners who have spoken to me, seen as gimmicks? What pensioners want, and what everyone wants for the sake of the Government's credibility, is a good, across the board increase for all pensioners. Will the Minister argue with the Chancellor for such an increase, on top of all the other measures, and when will pensioners receive it?
Mr. Darling: I shall not repeat what I said privately to the hon. Gentleman. He draws attention to the minimum income guarantee; since we launched our take-up campaign earlier this year, more than 130,000 claims have been received, showing that the availability of the guarantee has begun to extend beyond the 1.5 million pensioners already receiving it.
I disagree with the hon. Gentleman on the winter payments. The advantage of making those payments in their present form is that they are tax free and are not taken into account for benefits. If they were added to the pension, the very pensioners about whom he and I are concerned--those on low incomes--would lose out. I must disagree with him on that point.
Mr. David Willetts (Havant): What a fascinating exchange. At last, the Secretary of State admits that the number of pensioners in poverty has gone up, and his hon. Friend the Member for Falkirk, East (Mr. Connarty) rightly speaks for millions of pensioners who do not want the gimmicks; they want a reliable, basic state pension that is worth something. Buried on page 170 of the document that the Secretary of State published last week are some devastating figures. Do they not show that the number of families in poverty--with below half average income--has risen by half a million since Labour came to office? Many of those people are pensioners. Is that not a fraud perpetrated on the pensioner population?
Mr. Darling: What is a fraud is to suggest that the Tory party had nothing to do with the problems that we inherited or, indeed, to suggest that the Tories would do anything in the future. We came into office inheriting a situation in which the number of children living in poverty had trebled and almost 200 million pensioners were living in poverty. The problem arose because, whereas some pensioners saw their income go up by as much as 80 per cent. during the past 20 years, far too many pensioners saw their income go up by substantially less than that.
The problem with an across the board increase is that it does not help the poorest pensioners. The best that could be said for the proposals the Tories announced a month or so ago was that some pensioners would get 42p extra a week before tax and before they started to lose benefits. Of course, 2 million pensioners would lose out as a result of their proposals--those pensioners are the poorest in the country.
We are determined to help alleviate pensioner poverty. We want to lift pensioners out of poverty and we will do that. The report published by the Government last week shows the scale of the problem that we inherited, as did the UNICEF report published a few months ago. Unlike the Conservatives, we are determined to lift pensioners and others out of poverty. Unlike the Conservatives, we have got, and are prepared to spend, the money to do so.
Mr. Willetts: The Secretary of State well knows that our proposals on pensions would go to all pensioners, including those who pay tax and those who are on means-tested benefits. Our proposals are costed on that basis.
The Secretary of State is always keen to blame everyone else and to blame his inheritance. Let me quote from another report. A report from the Cabinet Office, drawn up while the Labour Government were in office, made the following statement on their record on poverty:
Mr. Darling: I am surprised that the hon. Gentleman did not refer to the UNICEF report that is the subject of the question. When it was published two months ago, a Conservative party research bulletin was issued on the same day as the hon. Gentleman was quoted as saying:
Of course, it will take time to turn that around. The difference between us and the Conservative party is that we are spending some £6.5 billion more on supporting pensioner incomes than they plan to do. We are spending a similar amount on helping families with children--especially on alleviating child poverty. Yes, it will take time, but the difference is that, at the end of this Parliament, people will be able to see that we are turning the situation around. If they ever have the Tories back, there will be more pensioner and child poverty in this country.