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Mr. Butterfill: Before the hon. Gentleman leaves the computer system, is he aware that each of the seven different types of benefit that are payable by the Benefits Agency has its own separate computer system, none of which is capable of interfacing with the other systems? Even if the Government get NIRS2 right, they cannot get the benefit right.
Mr. Webb: The hon. Gentleman is right. There are fundamental issues that have gone unaddressed by consecutive Governments. I shall give some evidence of the scale of the problem. The Financial Times reports that
I understand that Age Concern is taking the Government to the European courts on the issue of widows' SERPS. The Government have said that men--it is typically men--who inquired about SERPS rules in the early 1990s and were given duff information can claim protected pension rights, on condition that they can show that they
would have or might have acted differently.
I shall set out the Liberal Democrat approach to the issue. First, I shall reflect briefly on the Government's strategy for pensioners. Almost certainly, "strategy" is completely the wrong word. It is a dog's breakfast. The Government have been making it up as they have gone along, and there is still a lack of coherence. A few months after the general election, there was a massive increase in the level of the means test, and a renaming, which is essential. It is the minimum income guarantee.
About 500,000 pensioners are not claiming the money to which they are entitled. When the Government said that they are prioritising the poorest pensioners, they have it wrong. The poorest pensioners are not those who claim their entitlement. There are about 500,000 with an entitlement who are living below the poverty line but do not claim.
To be fair, the Government have ridden into battle. Thora Hird was brought forward to tackle the issue. The most recent figure that we have been given in a written answer--perhaps the Minister can update us--is that 30,000 of the 500,000 have now claimed their benefit. After the millions of pounds spent on publicity and on sending nearly 2 million letters to pensioners--at least three quarters of them did not have an entitlement--they have managed to increase by 30,000 the numbers of those who claim. Therefore, 470,000 pensioners are still going without. Aiming for a target of 500,000 and hitting 30,000 is a pretty poor performance. Is the Minister satisfied with that?
Reliance on the means test--which, of course, the Chancellor will increase massively on Wednesday--means missing the poorest pensioners in the land. The basic state pension reaches those pensioners like nothing else. That is why we believe in it.
Mr. Rammell: The same Liberal Democrat manifesto as my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) mentioned commits the Liberal Democrats not only to increasing the pension in line with prices, but to introducing a top-up of the basic state pension to meet the needs of the poorest pensioners. How is that different from the minimum income guarantee?
Mr. Webb: The hon. Gentleman is right. I am well aware of what the manifesto said. We committed ourselves to ensuring that the incomes of those pensioners would rise at least in line with earnings. That is the basis on which we will work, but we need to go beyond that.
The minimum income guarantee sounded like a good idea. The Government thought that if they changed the name, came up with a new scheme and got Thora Hird involved, all would be well, but there was a problem. They realised that by creating a chasm between the basic pension and the means test, they were also creating a savings trap. They were discouraging pensioners from saving for the future and saying to today's pensioners who had already saved, "What was the point of saving? You've got your small pension, but all it's doing is disqualifying you from the minimum income guarantee."
What do the Government do? Instead of closing the gap between the pension and the means test, they increase it. If the Chancellor does what is widely expected of him on Wednesday and puts a fiver on the pension and takes the MIG up to £90, he will increase the gap between the basic state pension and the means test, which will push more pensioners on to means testing. I recently asked how many extra pensioners will be means-tested as a result of the increase under the new package, and was told that nearly 100,000 extra pensioners are to be means-tested.
The Government decided to do something else to deal with the hole that they had dug themselves into by creating a huge gap between the basic pension and the minimum income guarantee. Instead of putting the pension up, they decided to have another scheme called pensioner credit, but because it is so complicated, they have said that it will be years before they can introduce it.
In the meantime, however, they needed something else, which I think the Chancellor called transitional measures. What transitional measures could the Government possibly take between now and 2003? Well, let us think: what is happening between now and 2003? Oh, an election, so the Government decide to introduce transitional measures which will put money on the basic state pension, the very thing that they have spent several years telling us is a bad idea.
The Government have said that they could not possibly put money into the basic state pension because it is poorly targeted, but they have now decided to pay £150 to every pensioner regardless of means. It is a complete mess.
Mr. Tom Levitt (High Peak): If the hon. Gentleman wants all funding for pensioners to be given through the basic state pension, what would be an adequate amount to replace what he is describing as gimmicks and what we describe as targeting resources where they are most needed? How would he pay for that?
Mr. Webb: The £150 winter fuel payment, to which I presume the hon. Gentleman's remarks also refer--he is not indicating whether that is so--goes to every pensioner household in the land, regardless of means. It is impossible to imagine anything more untargeted. It is so untargeted that his right hon. Friend the Minister of State will get it this winter.
Mr. Deputy Speaker (Mr. Michael Lord): Order. There are far too many interventions from a sedentary position on both sides of the House, but particularly from Labour Members. The hon. Gentleman must be allowed to carry on with his remarks.
Mr. Webb: There is a rag bag of schemes--take-up campaigns, publicity campaigns and new schemes to deal with the problems of the old schemes. Even the free television licence scheme is a shambles. Many other hon. Members may have had my experience of receiving a letter asking whether I am over 75 and want to claim. Plenty of pensioners have received cheques to refund the money that they spent on the licence. Many pensioners do not have bank accounts, so they are being asked to send the cheques back so that they can have some money to take to the post office. This lot could not organise--well, it is a complete shambles.