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Mr. Darling: I must say that I had no idea that the hon. Gentleman was a champion of people on low incomes. That escaped my attention during all the years during which he was a Minister and I sat on the Opposition Benches. I do not recall him expressing any such concern.
The Government have done a number of things to help people living in council houses and elsewhere—principally getting people into work and ensuring through the working families tax credit that work pays, and by introducing measures to help older people. A whole range of measures have boosted the income of people on low pay. The hon. Gentleman did not of course mention that he is against each and every one of them.
Mr. Andrew Dismore (Hendon): When going around my constituency explaining pension credit to my constituents, I have met pensioners who are somewhat suspicious of the programme—not for the reasons given by the Conservatives, but because they thought it was too good to be true that, at long last, a Government were recognising their long-standing complaint that they had been saving all their lives but had nothing to show for it. On behalf of the thousands of pensioners in my constituency, I congratulate my right hon. Friend on his statement. What plans does he have to make sure that all those who are entitled to it take up that important benefit?
Mr. Darling: On my hon. Friend's first point, I am sure that once pension credit starts to be paid, from October 2003, more and more pensioners will come to realise its benefit. If I were my hon. Friend, I would not worry too much about what the Conservatives say. Remember, theirs is the party that said that pensioners would not like the winter fuel payment—so certain were they of that that they intended to abolish the winter fuel payment. They have changed their mind, as they have on the minimum wage and other measures. That suits me fine: if the Tories want to take money away from people, Labour Members will be absolutely delighted to test that policy at the next opportunity.
My hon. Friend raises an important point about entitlement. When people retire, we have to write to them to say what their basic state pension is. Our objective is to make sure that at the same time we calculate their guarantee element and the credit. We intend to fix the award to pensioners over the age of 65 for five years so that we do not have to trouble them unless some major change in circumstances occurs. All that plus the IT to which the professor referred will ensure that in future we will have a far easier and a far better system for getting pensioners the money to which they are entitled.
Hywel Williams (Caernarfon): We in Plaid Cymru and the Scottish National party are concerned about the operation of the means test and its differential effect in areas such as ours, where incomes are low and there are many pensioners. Will the right hon. Gentleman tell us,
not the number of people who are claiming minimum income guarantee but the percentage of people who are not claiming it? Does he foresee that percentage falling as his measures are applied?
Mr. Darling: The hon. Gentleman is right in one respect. The effect of pension credit is differential; basically, it gives more money to poorer people as well as rewarding those who have modest savings. I regard that as a good thing. Unfortunately, Scotland and Wales have more than their fair share of poor pensioners. That is why the minimum income guarantee proved so successful and popular in both countries and why I believe the pension credit will prove successful in both countries. When the hon. Gentleman has had a chance to reflect on his party's position—no doubt, the Scottish nationalists will do the same—I think that he will see that the pension credit will be welcomed in both countries. If those parties want to take a different view and to oppose the measure, I shall be extremely happy.
Gillian Merron (Lincoln): I welcome the announcement of more money going into the pockets of all pensioners, especially the poorest, as well as the simplification of the minimum income guarantee claim form—a change that was warmly welcomed by Age Concern in Lincoln. May I ask my right hon. Friend to ensure that his Department increases its efforts to find new ways in which to promote the take-up of minimum income guarantee, so that we can be sure that every pensioner who is entitled benefits both from the benefit and from the recent increases that he has announced?
Mr. Darling: I certainly intend to do that. I want two things to be developed in the coming years as new and better IT is implemented. We are starting to send annual pension forecasts to the working population, but we have a problem in that no one has to tell my Department when they move, so we do not always keep in touch with them. Once more regular contact is established, it will be much easier to get in touch with people as they approach retirement and tell them what their basic state pension is likely to be, as well as asking them about second pensions and so on.
In the coming years, we will get better, but in the immediate future we will, as my hon. Friend rightly urges us to do, continue to step up efforts to ensure that people get the money to which they are entitled. It has been our experience that as we increase the amount of money available, interest tends to increase. I am pretty confident that, as the years pass, more and more people will receive their entitlement. In future, people will wonder why it took so long for any Government to start to work to eradicate pensioner poverty and, critically, to reward those 5 million people with modest means who should have been helped long ago.
Mr. Gerry Steinberg (City of Durham): I welcome my right hon. Friend's proposals. The greatest grievance about which I heard in my constituency was from pensioners complaining that they were being penalised for saving when they were younger. The majority of pensioners to whom I have spoken are delighted with Government policies. They tell me that they are much better off than they have ever been.
I still have a big worry. Will my right hon. Friend assure me—I ask him to explain more fully—that his latest proposals will not mean that some pensioners will lose out in terms of council tax relief and housing benefit? When pensioners have been given increases in pensions, they often lose out in that way. They find that they are worse off at the end of the day. Can my right hon. Friend assure me that that will not happen this time?
Mr. Darling: My hon. Friend raises an important point. I can do no better than refer him to page 6 of the pension credit document, which he can send to his constituents. The passage clearly reads:
- "Nobody will lose Housing Benefit or Council Tax Benefit as a result of the Pension Credit."
Mr. Chris Mullin (Sunderland, South): I am grateful to my right hon. Friend the Secretary of State for the fact that Sunderland is to be included in the pilots for the new programme that is aimed at the hard-core unemployed. The working families tax credit and the new deal have been of great benefit in Sunderland, where we have some of the most intractable unemployment problems.
May I put it to my right hon. Friend that the best way of dealing with the vast benefit culture that we inherited from the previous Conservative Government is to widen the gap between the world of work and the world of benefit, as we have been doing? Will he confirm that it is his intention to continue widening that gap?
Mr. Darling: My hon. Friend is right to say that it was necessary in the reforms that we put in place to ensure that it really did pay to work, and that people could see the difference. That is what the working families tax credit has done.
We shall keep these matters under review. Despite the fact that my right hon. Friend the Chancellor of the Exchequer is no longer sitting next to me, I do not think that I can give an undertaking on his behalf to widen or improve the working families tax credit just like that. However, my hon. Friend can take it from me that it is the Government's strategy progressively to ensure that it makes a real difference to people if they are in work.
In the programme that I have outlined, there will be a pilot in my hon. Friend's area. A single person who goes into work will be £40 better off a week than if they had stayed on the jobseeker's allowance. That is an example of how much better off people will be, but we certainly want to continue to do more.
Mr. Anthony D. Wright (Great Yarmouth): I thank my right hon. Friend for his statement, and certainly for the inclusion of Great Yarmouth in the new deal for the long-term unemployed. He will be aware that unemployment has fallen by 44 to 45 per cent. since 1997. However, we still have 5.5 per cent. unemployment. The new deal for the long-term unemployed will certainly be welcome.
Will there be any restrictions relating to the age of those who can come on to the scheme? Will there be restrictions on the numbers of people who are eligible for it? There are more than 900 long-term unemployed people in my constituency.
Mr. Darling: These are pilot programmes. They are aimed at people who have been through the new deal and are still out of work post six months. However, many people go into work immediately after being on the new deal. To start with, and as part of the pilot programme, we want to ensure that as many people as possible can get on to the programme and benefit from it. We shall evaluate the position and see how well they do with a view to extending the programme.
I am aware that in my hon. Friend's constituency—I have visited it on a couple of occasions—he has some intractable problems. Great Yarmouth has gone through some quite substantial structural changes. I believe that the experience that we build up from the pilots will show us new approaches which work, and we want gradually to roll them out. It is critical that we ensure that we can do more, and not only in this area. It should be remembered that there is also a new deal for disabled people, a new deal and other measures for lone parents and a new deal for the over-50s. They are all designed to ensure that they help people. I hope that a combination of measures will result in people getting into work.
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