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Means Tests (Pensioners)
9. Mr. Simon Hughes (Southwark, North and Bermondsey): How many more pensioners will be means-tested in the next financial year under measures announced in the pre-Budget statement. [141809]
The Secretary of State for Social Security (Mr. Alistair Darling): We estimate that a further 500,000 pensioners will benefit from the significant increase in minimum income guarantee rates and capital limits from next year. The poorest pensioners will gain £12.45 a week as a result of the measures that we announced last November alone.
Mr. Hughes: If someone applies for asylum and does not succeed, the Government and others call him a bogus asylum seeker, but someone who applies for the minimum income guarantee and does not succeed--most applicants appear not to--is simply called someone who did not succeed. I hope that the Government will apply some consistency in their language.
I have a simple question. What increase in the basic pension would the Government have to make to ensure that the majority of applicants for the minimum income guarantee received it?
Mr. Darling: They would not get it. The hon. Gentleman is attempting to grapple with a problem. Many people have expressed an interest in the minimum income guarantee, but he and others have argued that people are reluctant to claim it because of the stigma that is attached to claiming. Those arguments do not stand up. We have identified the fact that people are unsuccessful either because they have too much money in the bank--we are getting rid of the capital limits to remove that artificial prohibition on receiving help--or because they have too much income, and we are dealing with that by raising the minimum income guarantee to £92 next year and up to £100 the year after that.
On the hon. Gentleman's specific question, when we increase the capital limits next year as a stepping stone to getting rid of them, nearly 500,000 people will gain as a result.
I remind the hon. Gentleman and other Liberal Democrats that their policy at the previous election was not based on a huge across-the-board pensions increase. They said:
- We will create an additional top-up pension for pensioners with incomes below the income support level. This will be indexed to earnings and tapered as outside income increases.
Mr. Bob Blizzard (Waveney): It has been claimed that many elderly people are simply too proud to claim the minimum income guarantee. I have yet to find any such person in my constituency. I find that, when people know about the guarantee, they want to claim the money. Some people still do not know about it, so will my right hon. Friend think of ways in which we could further increase awareness? For example, we could use local media outlets, local campaigns and local officials who could visit sheltered accommodation and places where many elderly people live to promote awareness.
Some claims have not succeeded because of the savings limit, so will my right hon. Friend write directly to all the people who have been affected and advise them of the doubling of the limits and of their eventual disappearance and replacement with the pensioner credit?
Mr. Darling: We will get in touch with the people who have just missed out. It is important that they realise that they may be eligible for help after next April.
My hon. Friend makes an important point. It is not stigma or a reluctance to claim that is the problem. The problem is that artificially low limits have been imposed on the amount that pensioners can save. We want to make sure that those artificial limits are removed, which is why we are getting rid of the capital limits.
We also want to make sure that we can do far more than an across-the-board increase could ever do for the poorest pensioners, and that leads me on to another difference between us and the Conservatives. At present, if people do what successive Governments have told them to do and save for their retirement, they will lose out and be penalised. That is why the pension credit will ensure that, when people save for their retirement, they will receive a cash top-up to reward them for their thrift. That is a strategy to encourage more people to save for their retirement and will remove the problem that we inherited.
In this, the fourth largest economy in the world, we were left by the Tories with 2 million pensioners who did not have enough to live on. That state of affairs has no place in a decent society.
Mr. Peter Viggers (Gosport): Before the Government were elected, their spokesmen made moving speeches about abolishing means-testing for pensioners, but now that they are in office, 55 per cent. of all pensioners will be on means-tested benefits within three years. Has there been a change of policy or has something gone wrong?
Mr. Darling: More pensioners are getting more money under Labour. I hope the hon. Gentleman has got that.I hope that that situation continues because I would not want to leave pensioner poverty in the same state as the Conservative party left it. Pensioner poverty has no place in a decent society and we are going to make absolutely sure that it does not happen. There will be more pensioners with more money under Labour.
Winter Fuel Payments
10. Mr. Lindsay Hoyle (Chorley): How many pensioners in Chorley will benefit from the winter fuel payment. [141810]
The Minister of State, Department of Social Security (Mr. Jeff Rooker): Some 17,600 winter fuel payments have been made to people in Chorley who are entitled to them.
Mr. Hoyle: I welcome that. The payment is warmly welcomed in Chorley and its residents look forward to it being paid in years to come. Will my right hon. Friend assure me that that will be the case for the lifetime of this Government and that, unlike the Conservatives, we are committed to providing that payment?
Mr. Rooker: Yes, following the exchanges on Question 4, it is clear that we are committed to that payment. It is extremely popular and it gets money to people over the age of 60. I do not want to fall out with you, Mr. Speaker, but I hope that that is taken on board by my hon. Friend's Tory opponent at the general election.
Fraud
11. Dr. Lynne Jones (Birmingham, Selly Oak): What his estimate is of the annual cost of fraud in the social security system. [141811]
The Minister of State, Department of Social Security (Mr. Jeff Rooker): Social security fraud is estimated to cost the country at least £2 billion a year. We recently published figures that show a significant fall in fraudulent claims for jobseeker's allowance and income support. As a result, we are on target to reduce fraud by 10 per cent. by 2002 and to halve it by 2006.
Dr. Jones: Will my right hon. Friend clarify whether those figures include the cost of measures that have been introduced to detect fraud? Does he agree that prevention is better than cure and that designing out fraud is as important as rooting out fraud? Will he report on progress
in simplifying the social security system so that more people can understand it and in reducing dependency on means-tested benefits and credits?
Mr. Rooker: My hon. Friend asks several questions. The answer to the first is no. The figure that I gave of£2 billion of fraud is established as a loss. Other figures have been bandied about, but they are based on strong or mild suspicion. We have a programme protection system. It costs several hundred million pounds a year to run and it protects a budget of £100 billion. However, it is necessary.
We have made considerable savings in the cost of fraud in this Parliament. We have saved more than £1 billion by implementing checks on new income support claimants, which is an improvement on the situation that prevailed before we took office. We have introduced several measures, which I could read to the House, and new legislation was forecast in the Queen's Speech. It is important to ensure that the correct benefit is paid to the correct person at the start of the claim and to keep that right. That is the one way to prevent fraud from entering the system.
Mr. Edward Leigh (Gainsborough): The Minister might recall that in a previous Question Time I referred to an article in The Economist, which suggested that the amount of disability fraud is now so large and prevalent that the Government have given up trying to calculate it. The Minister was unable to estimate the level of disability fraud, but as time has now passed will he share such information with the House?
Mr. Rooker: No, not without being given notice of such a specific aspect of fraud. It is true--there is no question about it--that it is at a high level. We shall introduce legislation to fill gaps in our armoury against fraud, which I hope all hon. Members will support.
We have better-trained fraud investigators than ever before. The Department has recently taken on the former deputy director of MI5 and the former head of investigations at Customs and Excise. We are bringing into the Department people with better experience of rooting out fraud within the system. There is too much fraud, and we must do everything possible to cut it, whether it occurs in claims for disability benefits or other benefits.
Mr. Jeremy Corbyn (Islington, North): Would the Minister care to consider for a moment that there is another form of fraud that his Department urgently needs to address? I refer to cases in which the administration and delivery of housing benefit is contracted out to various companies, which blatantly fail to perform that task. That results in thousands of people mistakenly being assigned rent arrears and, if they are local authority or housing association tenants, being threatened with the loss of their home, or, in the case of many private tenants, losing their home.
Is the Department prepared to look seriously at the appalling record of many of those companies--particularly IT Net, which administers the service in Islington and Hackney--with a view to terminating those
contracts, ensuring that the job is done efficiently in-house and removing for many people the threat that they will lose their home?
Mr. Rooker: My hon. Friend raises important issues. In the administration of housing benefit, there are incompetent local authorities, just as there are incompetent private companies. The contracts to which my hon. Friend refers are awarded by the local authority, and it is not within my Department's competence to terminate them. The benefit fraud inspectorate scrutinises housing benefit authorities and publishes reports. In some cases there is collusion between tenants and landlords, and we must take steps to root that out as well.
It is outrageous that someone's home should be put at risk because of the straightforward incompetence of the private company to which benefit administration has been contracted out or the public sector that has not supervised the contractor sufficiently.
Mr. Eric Pickles (Brentwood and Ongar): Does the right hon. Gentleman regret the answer on benefit fraud that he gave me on 13 November at column 640, when he said that the guidelines on the protection of customer information were identical to those that had previously been issued? It is clear that the discretion given to staff under the new guidelines is much greater than before and that there are other material differences.
Does the Minister also regret the written answer that he gave on 30 November, promising to deposit the old guidelines in the Library so that Members could compare them with the new ones? A few minutes before Question Time began, those guidelines had still not been placed in the Library.
Unarguably, paragraph 519 of the guidelines makes it clear that the Department will withhold from the police the identity of burglars, muggers and thieves. It is also clear from paragraph 511 that assaults on the Department's staff warrant disclosure, but assaults on members of the public do not. Is the Minister aware that, despite the guidance given in paragraph 517, the police are still struggling to get co-operation on matters as serious as murder? Is it any surprise that police morale is at an all-time low? Will the right hon. Gentleman stop defending the indefensible and change the guidelines?
Mr. Rooker: May I, first, apologise to the hon. Gentleman about the placing of the guidelines in the Library? Frankly, there has been a complete and utter breakdown. I answered a question and gave specific instructions. I rewrote the answer to the effect that, for comparison, I would put the previous guidelines in the Library until the last day of this year. They should be there, and I regret that they are not. I hope that they will be there by the end of Question Time. The delay is unforgivable and I apologise to the hon. Gentleman.
In a letter to the hon. Gentleman or in one of my answers I said that there were on-going discussions between my Department and the Home Office. They went on for a considerable time, and they have been concluded to my satisfaction and that of the Minister of State, Home Office, my hon. Friend the Member for Norwich, South (Mr. Clarke). A new concordat will be written and agreed by my Department, the Home Office and the police, so that there will be no complaints about the police not being
able to get the information that they need from DSS officers in the pursuance of crime. There will be a change, as I forecast in one of my answers to the hon. Gentleman.
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