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Means-tested Benefits

6. Mr. Peter Viggers (Gosport): What research his Department is currently evaluating into the advantages and disadvantages of means-testing benefits. [99066]

The Minister of State, Department of Social Security (Mr. Jeff Rooker): The Department is not currently carrying out any research on the advantages or disadvantages of means-testing.

Mr. Viggers: The Government's pensions Green Paper, published a year ago, had as one its objectives the aim of giving

It acknowledged the resentment felt by those who, having saved for their retirement, are therefore disqualified from receiving benefits. Are not the Government, with their guaranteed minimum pension for the improvident, doing the opposite of the priority that they set out? Moreover, there has not been the promised review of capital disregards for those with modest savings. Have not the Government, once again, said one thing and done another?

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): Disgraceful.

Mr. Rooker: I understand the reasons behind the question but it is disgraceful, as my hon. Friend says, to describe as improvident people in receipt of the minimum income guarantee. Such people, because of the nature of their employment, may never have had the opportunity to contribute to an occupational works pension or superannuation scheme.

However, I take the point that the hon. Member for Gosport (Mr. Viggers) makes about capital limits, which have been fixed for many years. We are committed to

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reviewing those limits and we will do so, because we do not wish to send a signal that thrift does not pay: we must send a signal that it pays to save. The fact that capital limits were frozen year after year was a disgrace, but we shall correct that by reviewing them during this Parliament.

Mr. Peter L. Pike (Burnley): I am sure that my hon. Friend recognises the complexity and duplication in having to produce information for many means-tested benefits. What progress are the Government making on one-stop benefits, which will help people and save cost?

Mr. Rooker: We are piloting the one-stop benefit around the country. Eight new pilots start today.

Mr. David Willetts (Havant): Does the Minister recall the Chancellor's statement to the Labour conference before the election, in which he said:

Does the Minister understand that if the basic state pension is increased in line with prices and the minimum income guarantee is increased in line with earnings, we will end up with more means testing, not less? Why will he not admit that that is the clear, deliberate, conscious policy of this Government and that it deters people from saving?

Mr. Rooker: I am not clear what solution the hon. Gentleman advances--he would probably argue that that is not his job. Too many pensioners are on the means test, and that has been the case for many, many years. Without the proposals in the Green Paper mentioned by thehon. Member for Gosport (Mr. Viggers), 3.5 million pensioners--one in three--would be on the means test in 2050. The proposals in the Green Paper on the stakeholder pension and on the second state pension will reduce that figure considerably. We do not intend to tip pensioners into the means test, as the Opposition allege.

Mr. Willetts: There is no point in talking about such long-distant visions if, year on year, the Government spread means testing. Does the Minister accept the calculation of the Institute for Fiscal Studies that people will need a fund of £130,000 to avoid being trapped on the Government's minimum income guarantee? If he does not, will he offer an alternative calculation? People planning for their retirement must know how much to save to keep themselves above the Government's means tests?

Mr. Rooker: Yes, indeed. The No. 1 priority of people should be to plan for their retirement throughout. They were never told that by the previous Government; they were left high and dry and too many have ended up on the means test. As we have made clear, there must be a policy for today's pensioners and for tomorrow's--but not the same policy. There are pensioners who have to be helped today, which is why the minimum income guarantee was introduced. As the hon. Gentleman well knows, helping those pensioners by an across-the-board increase would not put an extra penny in their pockets. We are determined to target resources on today's poorer

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pensioners while making adequate plans and preparations in law to ensure that tomorrow's pensioners retire on a decent income above the means test.


8. Mr. David Kidney (Stafford): What assessment he has made of the obstacles raised by social security rules to volunteering. [99068]

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): We are keen to encourage voluntary work. We recognise that it can play a significant role in preparing people to enter work, especially those who may have been out of the labour market for some time. People who are in receipt of social security benefits may do unlimited amounts of voluntary work without it affecting their benefit, as long as other eligibility conditions continue to be met.

Mr. Kidney: On Saturday, I co-hosted a conference in Stafford for voluntary organisations about recruiting and retaining volunteers imaginatively entitled "Desperately Seeking Volunteers". Those present were complimentary about the Government's attitude to allowing people to undertake voluntary work, but they identified two residual areas where obstacles remain. The first was the obstructive attitude of a small number of staff at the Benefits Agency and the Employment Service who tried to get in the way of their volunteering. The second was the medical eligibility test for benefits such as incapacity benefit and disability living allowance, where, if people put their heads above the parapet for voluntary work, they run the risk of being ruled as fit for paid work. Does my hon. Friend agree that, with a little central direction from her, both those minor obstacles could be smoothed away?

Angela Eagle: If there are pockets of obstruction, perhaps my hon. Friend will let me know where they are and I will see what I can do to put an end to them. When we abolished the 16-hour rule for incapacity benefit, we made it quite clear that we encourage people who are currently on benefits to volunteer. There is no limit to the number of hours for which they may volunteer. If my hon. Friend can give me further details on that matter, I shall deal with it.

Mr. Laurence Robertson (Tewkesbury): Does acting as a local councillor qualify as voluntary work? If so, should a local councillor be able to collect disability benefits?

Angela Eagle: I understand that there is a disability benefit disregard for those who serve on councils. If the hon. Gentleman has a particular point of detail, perhaps he will write to me and I shall certainly deal with it.

Benefits Expenditure

10. Mr. Owen Paterson (North Shropshire): If he will make a statement on his Department's forecasts for expenditure on social security payments. [99070]

The Secretary of State for Social Security (Mr. Alistair Darling): Social security spending is growing at well under half its rate during the previous

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Parliament, and is now taking a declining share ofnational income--an achievement that the Conservative Government never managed.

Mr. Paterson: That is exactly the answer that I received during the statement about two weeks ago. When the Prime Minister spoke at Church house on 7 May 1997, he said that one of his main priorities would be to reduce social security spending. In that case, why does table B12 of the Government's figures in the pre-Budget report show that social security benefits will increase from £93.3 billion to a massive £103.6 billion?

Mr. Darling: I am glad that the hon. Gentleman is now getting the message that social security spending is growing at well under half the rate that it did under the previous Government. Of course, it is growing slightly, but it is growing at half the rate that it did under the previous Government. He may be interested to learn that so far in this Parliament, as a result of getting more people into work, we have saved more than £7 billion. That is a direct result of the Labour Government's economic policies and of our policy of getting people back into work.

Mr. Frank Field (Birkenhead): Will my right hon. Friend draw the Opposition's attention to the simple fact that, if more and more of us live for longer in retirement, the social security bill--for example, that for pensions--will rise? Is not the important commitment made by the Government that, although the total social security bill will rise, the proportion met by taxpayers--if we consider public and private provision--will fall?

Mr. Darling: My right hon. Friend is right. The Government's strategy, as set out in the Green Paper published a year ago, is to ensure that all those who can make provision for themselves should do so. The first leg of improvements needed to implement that is part of the Welfare Reform and Pensions Act 1999; the second is in legislation that will be put to the House shortly.

Mr. David Willetts (Havant): Will the Secretary of State confirm that the second most important reason for the reduction in social security plans between March and November is the £1.7 billion fall in disability benefit expenditure? Will he explain why, over the past seven months, he has miraculously reduced his forecast for disability benefit spending by £1.7 billion? Does that have anything to do with the means-testing of benefits that was put through the House only the other day?

Mr. Darling: When the hon. Gentleman thinks about the matter--he has a reputation for thinking about things--he will realise that the changes in the Welfare Reform and Pensions Act do not come into effect until 2001. There are two reasons for the reduction in expenditure, the first of which results from changes introduced by the Conservative Government in 1995. Secondly, we are tightening all the gateways to the social security system to ensure that those who are not entitled to benefit do not receive it. If they are entitled to benefit, we ensure that we give more help than ever before. Those changes will be welcomed by most reasonable people.

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