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Mr. Willetts: The hon. Gentleman is correct to say that the Government have got into an extraordinary position in respect of the £200 and £150 payments. The Opposition's package consolidates the £200 into the basic pension and then uprates it. We have formulated the package on that basis, and it has been agreed with my right hon. Friend the shadow Chancellor. The problem with special payments is
that they are not included in the basic pension and there is no requirement to uprate them. Thus, in some years they are not uprated and in others they are cut. Indeed, the Government's official position, on which I have received a more explicit written answer than that to which the hon. Gentleman referred, is that they will cut the rate next year.
Mr. Webb: I am afraid that the hon. Gentleman cannot get away with that, unless he thinks that the general election will take place in the current financial year, which I assume he does not. Let us assume that the general election will happen in May. Government spending plans for 2001-02 include a winter fuel payment of £150. Consolidating that in the pension, if that is what he proposes, represents £8.50, not £9.50. Strictly speaking, I am straying somewhat, so I return to the orders.
Another issue relating to the pensions strategy is take-up. It was clear on Monday that the Secretary of State was trying to run a line. I accept unreservedly and on the record that there is a role for means-testing--there always will be. I do not query that, but balance is important. We have criticised him for using an approach that relies so heavily on means-testing. He says that the Government have put a lot of money into the means test, which is true. When we ask about those who do not take up benefits, the Government refer to the take-up campaign. However, there is less to the campaign than meets the eye.
The Government sent letters to 2 million people offering free money. A third replied. Of that third, it appears that about 60,000 or 70,000--perhaps a few more--have received their money. Government figures suggest that 500,000 pensioners are not taking up their entitlement to income support, and Thora Hird and friends have reached 70,000 of those. That leaves 430,000. The Secretary of State's line is that there is no stigma in the mind of pensioners about applying for income support, but 2 million pensioners received a letter offering them free money and two thirds did not reply. To me, that suggests that fear of complexity and stigma may be out there, alive and well. Even on Government estimates, and even with the 70,000 taken off the figure, 430,000 pensioners entitled to income support are not receiving it. Almost all of them have received a letter from the Government telling them about their entitlement, but have not responded.
I would be interested to hear from the Government about those 430,000 people. Presuming that most received the letter, why did they not respond? What aspect of the system put them off replying?
Mr. Willetts: I am grateful to the hon. Gentleman for giving way a second time, because I know that he follows these issues carefully.
There is another puzzle that the Minister might tackle in his winding-up speech. The hon. Gentleman assumes that 500,000 pensioners are entitled to but not claiming the minimum income guarantee, but if he reads the Government's annual statistics on entitlements to means-tested benefits he will find that they have retrospectively reduced their estimate. Before the figure of 500,000 gains currency, it is worth remembering that,
until recently, the Government estimate was, from memory, about 500,000 to 800,000. They have cut their estimate of the number of non-claiming pensioners for reasons that are not entirely clear.
Mr. Webb: At the risk of allowing the debate to degenerate even further into an academic seminar, I think that the Government have discovered that pensioners are under-reporting their capital in the family resources survey. Therefore, they are making a further adjustment. The 500,000 figure is the mid-point of the current range of estimates, but in opposition Labour went into the election campaign having a go at the Tories about the missing million. The figure of 1 million was at the top of the range, but the Government now tend to use the middle figure, which is much more sensible.
Will Ministers discuss take-up with their officials, many of whom I used to work with on take-up statistics at the Institute for Fiscal Studies? Will Ministers consider whether more resources might be provided to bring the take-up figures up to date? We have only just received take-up figures for 1998-99, although we have received the 1999-2000 poverty figures--those for households below average income. I appreciate that extra processing has to be done between getting the survey and producing both the HBAI figures and the take-up figures, but, given that take-up is central to the Government's means-testing strategy and that we rely on figures that they say are years out of date, that is unsatisfactory. I hope that they will consider the timeliness of the take-up figures, especially as the take-up campaigns are taking place now. Whenever we criticise the Government's figures, we are told that they are out of date. Well, that is not our fault.
Mr. Rooker: I am grateful to the hon. Gentleman for giving way and apologise for being absent for the early part of the debate.
The take-up figures are behind time, but the take-up campaign marks the difference between the past and the present. It is freely admitted that all past take-up figures and those in the system are estimates based on statistical surveys, not on real people. We have written to almost 2.5 million individuals by name, and that has given us a much better idea of the level of unmet need. I am not saying that the system is perfect, but although the take-up campaign will take some time, as I have acknowledged in answers to parliamentary questions, the information that we will gather as a result of it will make a big difference. All previous estimates are just that: gross statistical estimates based on small sample surveys. With the best will in the world, they do not represent real people.
Mr. Webb: One knows where the Minister is coming from, but the family resources survey, which is one of the biggest social surveys, receives responses from 25,000 households a year, and a good chunk of those are pensioner households. Every pensioner whom the survey identifies as entitled to but not receiving income support is a real person. Short of talking to all those 2.5 million people, we will never get to the whole lot. However, the survey is a legitimate way to arrive at a figure, and those who reply are real people.
I do not have a problem with the take-up campaign, but saying that it proves that there is no stigma attached to claiming puts a gloss on matters. The campaign proves the contrary; two thirds of those offered free money said
no because they were bewildered by the system or did not like the means test. The Minister shakes his head. Will he do any follow-up work or research on those who received the letter but did not reply? I hope so, because that might help to resolve the issue.The key point is that the Government have relied heavily on means-testing, and they will double means-testing by introducing the credit. Their answer to the take-up problem is, "We have a take-up campaign." The campaign has got money to 70,000 people, whether one describes that figure as good or bad. That is great for the 70,000, but more than 400,000 people at least--that figure is still our best guess--are entitled, but not receiving. They were offered free money, but turned it down. Where do the Government go next with them?
Mr. Coaker: I tried to make a thoughtful contribution, and the hon. Gentleman is doing the same, because the matter is immensely difficult. Take-up of the minimum income guarantee is not the only problem because those who will not claim it are prepared to claim means-tested housing benefit and council tax benefit. There is also a difficulty with take-up of non-means-tested attendance allowance. That is a big issue and we all need to address the problem. The Government are trying to consider all the ways that they can of encouraging people to take up benefits, whether means-tested or non-means-tested.
Mr. Webb: The hon. Gentleman makes a number of good points. Clearly there are take-up problems with non-means-tested benefits as well, and those need to be tackled. Support and advice are necessary, and I would like citizens advice bureaux to be backed by central Government at local level. It is unacceptable that local councils are left to their own devices--some help, some do not--when local citizens advice bureaux, which do a fantastic job on take-up, struggle from hand to mouth.
Heavy reliance on means-tested benefits represents a structural problem: it will hit the target for some, but miss it for others. Despite Thora Hird's best efforts, the target is being missed for 400,000 or 500,000 people who, by definition, are the poorest pensioners in the land. Their income is less than income support, which itself does not even cross the poverty line. They do not receive income support, which is why my party is committed to the basic state pension and why, like the hon. Member for Havant, we are particularly committed to increasing substantially the pension for older pensioners--not by 46p, or whatever the figure is, but by £5, £10 or £15. Older pensioners should be guaranteed that money, which is why we decided on such a strategy.
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