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Pension Funds

7. Dr. Nick Palmer (Broxtowe): If he will take steps to require pension funds to facilitate full transferability of accumulated rights to other funds without deductions. [446]

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): Measures are already in place to ensure that people get a fair value for their rights when they transfer from one pension scheme to another.

Dr. Palmer: I congratulate my hon. Friend on her new responsibilities.

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People who spend their entire lives in a rut working for one company are often better paid when they retire than those who switch between different employers. In some countries, that is prevented by the requirement on pension funds to pay the same amounts that they would require the employee to pay in if he was joining the company, but in Britain it is possible for someone to lose out successively every time he changes jobs. Does the Minister agree that that is undesirable in principle, and that pension funds should be encouraged to pay the full value?

Maria Eagle: I thank my hon. Friend for his good wishes, and for asking me what is an extremely easy question for me to answer on my first day at the Dispatch Box.

I understand my hon. Friend's point, but it is important to bear in mind the fact that different schemes provide different benefits, and that transfer values between schemes must be fair both to the person who wants to leave and to all the other members of the scheme.

I cannot agree with my hon. Friend that staying in one job for many years means that a person is dull. I hope to stay in my present job for a good many years yet.

Michael Fabricant (Lichfield): The hon. Lady will be aware that some funds suffered more damage than others owing to the £5 billion stealth tax imposed by the Labour Government soon after they took office. What assessment has she made of the final amount by which pensions will be reduced as a result of the stealth tax? Is it true that it could be as much as 23 per cent. in the case of those in their 40s and early 50s--such as myself?

Maria Eagle: The hon. Gentleman is being a little disingenuous in telling just one side of the story. He is well aware of the fact that we cut corporation tax at the same time as we introduced those other measures.

Pensioner Poverty (Scotland)

8. Sir Robert Smith (West Aberdeenshire and Kincardine): What measures he proposes to take to alleviate pensioner poverty in Scotland; and if he will make a statement. [447]

The Minister for Pensions (Mr. Ian McCartney): Our record speaks volumes. Around 2 million of the poorest pensioner households are now at least £15 a week, or £800 a year, better off in real terms as a result of Government measures since 1997. That is a real-terms rise in living standards of at least 17 per cent.

Sir Robert Smith: I am sure that the Minister will recognise that the poorest pensioners in our society are those who are entitled to the minimum income guarantee but who fail to claim it. What is his current estimate of the number of people who fail to claim the MIG? What target will his Department set for take-up before it will recognise that the MIG is not succeeding for those pensioners and another way will have to be found?

Mr. McCartney: This is a parliamentary first: a Rab C. soundalike answering a Rab C. lookalike. I would take the hon. Gentleman's point more seriously if it were not

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for this fact. In 1997, the Liberal Democrats' policy was clear. They offered a minimum income guarantee credit. They have now changed their position. In doing so, they have divided themselves from the Government.

The Government are committed to ensuring that no pensioner in Britain lives in poverty. The uptake of the MIG is considerable. Earlier, my right hon. Friend the Secretary of State made it clear that, following the latest take-up campaign, over 100,000 pensioners are now receiving £20 a week more. When we think about it, for a small investment, we are taking people out of poverty for their lifetime. Under the old system, people lived in poverty for the whole of their lifetime. The Government are ensuring that every pensioner in Britain will have a minimum income guarantee, and we will improve on that when we introduce the pension credit Bill.

Minimum Income Guarantee

9. Paul Goggins (Wythenshawe and Sale, East): If he will make a statement on the level of the minimum income guarantee. [450]

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): The level of the MIG was increased significantly in April. Single pensioners are now £15 a week better off in real terms than in 1997 owing to that increase and to other measures.

Paul Goggins: I thank my hon. Friend for that answer and join hon. Members in welcoming her to her new post.

I welcome the impressive increases in the level of the minimum income guarantee that have been initiated by the Government, but a retired pensioner whom I met recently was living on £72 a week, unaware that she was entitled to an extra £20. I am pleased to say that she is now receiving that extra amount, but will my hon. Friend's Department redouble its efforts to identify all pensioners who are eligible and encourage them to make a claim?

Maria Eagle: I am pleased to hear the example that my hon. Friend has related. It is one of many. Of course, we will ensure that as many people as possible who are entitled to the minimum income guarantee claim it. That is the purpose of our take-up campaign. As my right hon. Friend the Secretary of State has said, over 100,000 people are now an average £20 a week better off as a result of taking up the MIG.

Mr. Geoffrey Clifton-Brown (Cotswold): I welcome the Minister to her post. Hard work and perceptiveness on the Public Accounts Committee have been duly rewarded.

What does the Minister intend to do about the 40-page form that one has to fill up to apply for the minimum income guarantee? It includes such gobbledegook questions as:

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Maria Eagle: I thank the hon. Gentleman for his kind words at the beginning of his remarks, which turned into a bit of a rant. I remind him that it was his Government who invented those questions. I assure him that, from October this year, the 40-page form will be down to 10 pages and all those questions will have gone.

Mrs. Anne Campbell (Cambridge): I warmly welcome my hon. Friend to her new responsibilities. What progress has been made on eliminating that complicated form? Many pensioners are still unable to face the complication of filling in an application form and may be ignorant of the benefits that filling it in would bring. If we could give them the minimum income guarantee without the need for an application form, many more people would benefit.

Maria Eagle: I thank my hon. Friend for her kind remarks. I assure her that we want to minimise the inconvenience and difficulty that people have to go through to receive the minimum income guarantee. We have to ask some questions to determine whether people are eligible, but those will be kept to the minimum. My hon. Friend will no doubt be pleased to hear that those who are trying to claim can receive help on the telephone from those who know how to fill in the forms. We are trying to ensure that those forms are as simple as possible and that there is as much help as possible for those who need to fill them in.

Miss Anne McIntosh (Vale of York): May I add my congratulations to the hon. Lady on assuming her new position? Does she share my anxiety, and that expressed by Age Concern, about the forecast that the percentage of households eligible for benefits which fail to take them up because they are means-tested will increase to more than 50 per cent under this Government? What assurance can she give the House that that will not happen over the lifetime of this Parliament?

Maria Eagle: The hon. Lady calls it means testing, but I call it ensuring that those who have never had a decent pension have a chance to receive one. There may be a different perspective on the matter, but the fact is that we are ensuring that those who have always had too little money to live on in their old age will now have proper provision. That is to be welcomed.

Income Support

10. Mr. Peter Luff (Mid-Worcestershire): If he will make a statement on the application of the habitual residence test in assessing eligibility for income support. [452]

The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks): The habitual residence test ensures that income-related benefits, including income support, are paid to people with reasonably close ties to the United Kingdom and who

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intend to settle here. Its underlying principle is that the taxpayer should not have to subsidise people with very tenuous links to this country.

Mr. Luff: The Minister should be aware from my correspondence with his Department that I have specific concerns about the application of the test in the case of my constituent, a British-born pensioner who, after a long absence, returned from former Rhodesia and, subsequently, from South Africa. She has received contradictory advice about how the test will affect her. That is not really surprising, however, as the sheer unknown quality of the test--its general principles are known, but its details are not--leads to highly subjective decision making by local authorities and appeal tribunals. Is it not time to be specific about the test?

Malcolm Wicks: The hon. Gentleman would not expect or desire me to discuss his constituent's case in the House. I understand, however, that she is appealing. We must await the outcome of that, and I shall be happy to discuss the matter with him after that. Factors include the length of stay, future intentions, previous links with the United Kingdom and, in the case of people returning to the United Kingdom, the reasons for their absence. I assure the hon. Gentleman that, in 89 per cent. of cases, people pass the test. People also have a right to appeal, and a proportion of them do pass on appeal. However, I shall discuss his constituent's case at the appropriate moment.

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