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Vernon Coaker: Does the hon. Gentleman not agree that a pension service dedicated to pensioners is more likely to attract them to contact it when they need to than is the current arrangement? Is this not a good change that is taking place?
Mr. Boswell: I hope that I can agree with the hon. Gentleman, but Ministers must handle this matter with more attention than we have publicly been aware of, or at least allow us to have a debate about the issues. If this service works seamlessly as a one-stop shop, and if people in the service are capable of answering questions on child benefit, for example, or of getting a prompt answer delivered to a pensioner, that will be fine. If it does not work properly, however, and pensioners are shuffled from, say, Burnley to Bootle, it will be very bad news.
Implicit in this debate has been a concern on both sides of the House about take-up, and the way in which the system works in practice. It will be great if it works, but it is quite clear to all of us that it does not work as it is intended to. It may even be clear to some of us that if it did work as it was supposed to, take-up would increase to a level that might give rise to concern for the Chancellor in relation to some of the benefits being paid. However, that is perhaps an argument for another day.
More attention should be paid to the delivery of the pension service than it has hitherto received. Let me be positive, however, and say that I am pleased that Ministers propose to involve the voluntary sector in the delivery of services, but that must be genuinely bureaucracy-free and comprehensive. That is my response to the point made by the hon. Member for Gedling (Vernon Coaker).
The Minister has ample time to reply and I shall be friendly to him, as I hope I always am, by reminding him that the late Iain Macleod—a great fellow Scot, though a Conservative, whom I admired immensely—always advised young politicians against shooting Santa Claus even when Santa Claus was one legged. I do not suggest that Ministers have been tremendously generous, but they have made advances and a further concession has been wrung out of them today.
Although there are matters that can be welcomed—we shall not divide the House on the orders—it is clear from the tone of the debate that there are serious questions to be answered by Ministers. Frankly, the climate for pensions generally and for the income of pensioners, whatever its level and whatever their status and way of life, is deteriorating. If Ministers remain in denial and do not address that, we could all end up losers.
9.21 pm
The Minister for Pensions (Mr. Ian McCartney): I thank hon. Members for what has been, for the most part, a useful and interesting debate—it says here. Before proceeding, I must tell Opposition Members and my colleagues that I shall answer the points made tonight, so I give the hon. Member for Daventry (Mr. Boswell) a word of caution. I do not intend to go over the ground covered in our previous two pensions debates in the past few weeks.
I do not say that as a criticism, but much of the hon. Gentleman's contribution and of his hon. Friends' speeches was about general pension issues, which I am more than happy to debate on Second Reading and in Committee when we discuss the State Pension Credit Bill and when we examine over the coming months a range of issues, such as the simplification review, the Sandler review and the rest of it.
Mr. Boswell: I feel particularly generous tonight and I am also conscious of the rather tight nature of the orders and the debate that flows from them. I am content for the Minister to reserve his responses on the wider matters for other and perhaps more appropriate occasions, but will he at least undertake to consider seriously the points made by a number of colleagues about the current situation, which genuinely concerns us? Ministers must not resort to denial.
Mr. McCartney: I thank the hon. Gentleman for his kind remarks and reassure him that my colleagues and I always take the comments of hon. Members seriously, even when they do not deserve the seriousness that we attach to them. A number of specific points have been raised and I shall try to answer them.
My hon. Friend the Member for Gedling (Vernon Coaker) raised issues about attendance allowance, and I am happy to meet him to discuss them. His point was about take-up, which relates to the pension service, and I shall write to colleagues about the next stage of its development. I remind the hon. Member for Daventry that at each stage we have written either directly to the Members of Parliament for the constituencies concerned or to Members generally.
I have no problem with maintaining a close working relationship with colleagues during the delivery of the pension service in a rolling programme over the next few years. I want Members on both sides of the House and their staff to be involved proactively so that we are as one on that. This Government are not a secret society, believe it or not, and we want to engage with colleagues in respect of development and delivery of the service.
The orders confirm our conviction that it is essential to provide effective support for those who cannot work or are retired, while promoting the principle of work for those who can. We are continuing to put right the wrongs of the past. Over the 18 years before we came to power, millions were discarded to a life of poverty. Listening to the hon. Member for Daventry, I would never have thought that the Conservatives were in government for 35 of the past 50 years. In government, we have done something about hospital downrating, we have done something about means-testing and we have done something about pensioner poverty—to cut it rather than to create it. That is an aside. I shall not get partisan. [Laughter.] I shall try my best not to be too partisan.
There are some key figures. The estimated cost of the uprating for 2002-03 is £2.985 billion: £2.06 billion for the elderly, £480 million for the sick and people with disabilities, £330 million for families, £65 million for the unemployed, and £50 million for widows and others with special needs. We are taking action to cut the costs of economic and social failure with a combination of sound economic management and policies to increase employment. We are investing in public services to tackle issues such as health inequalities and poor housing, and to get extra help to priority groups.
We were not prepared to allow generation after generation to suffer the indignity of poverty, be it relative, absolute or persistent. We have addressed the legacy of pensioner poverty head-on, introducing the minimum income guarantee so that poorest pensioners will be at least £15 a week better off. Rough and ready the guarantee may have been, but we were the first Government ever to challenge pensioner poverty. From a standing start, 1.7 million pensioner households and 2 million individual pensioners are now receiving the minimum income guarantee. We are the first Government to intervene in the cycle of pensioner poverty—a cycle for which I refuse to apologise. The Conservative party created it; the Liberal Democrats talk about it; at least this Government are doing something about it.
We have made significant progress towards reaching our long-term objective of ending child poverty within a generation, and halving it within 10 years. We have introduced a range of tax and benefit reforms to give help at the time when families need it most. We have made record increases in child benefit, extended the mobility component of disability living allowance to three and four-year-olds, and delivered wide-ranging reforms to ensure that work pays and to make work possible. Measures such as the national minimum wage and working families tax credit have helped to ensure that people are better off in work.
The history pages will make clear the Tories' legacy. They failed to provide help for those who needed help most; it is now up to us to do so.
We know that it is particularly hard for families on low incomes to bring up children with disabilities, so we are again providing substantial extra help for disabled children. The order gives an additional £5, on top of normal uprating, for the poorest families, bringing the disabled child premium to £35.50 a week. There has been an increase of more than £15 a week since 1996. That will benefit about 80,000 children.
To help remove the barriers to work from people with severe disabilities and to make sure that work pays for them, their earnings or their partners' earnings will no longer be taken into account for independent living fund assessments. The hon. Member for Daventry acknowledged that. The change will be worth an average of £130 a week to those families. We will also extend help to people with savings of up to £18,500 by increasing capital limits in relation to the fund. That is in addition to the increase in the independent living fund from £109.6 million in 1996–97 to £131.3 million in 2000–01.
We are doing more than ever to help families balance their work and home lives. That was raised by the hon. Member for South-West Bedfordshire (Andrew Selous), although I think he took a somewhat different line. We actually believe in helping families. It does not matter to us whether they are single-parent families, or whether a parent is absent; children are the most important aspect. They are our future, and every child in the country counts.
The standard rate of maternity allowance and statutory maternity pay will rise from £62.20 to £75 a week. That will benefit about 340,000 families a year, and is the largest weekly increase in the benefit since February 1958. The sure start maternity grant will rise from £300 to £500, giving a further substantial increase to mothers on low incomes. The new deal and other measures have already helped 100,000 single parents into employment and out of poverty.
We are again giving significant help to the elderly. We are committed to the demise of pensioner poverty. We will, as promised, increase the minimum income guarantee in line with earnings, to £98.15 for a single person and £149.80 for a couple. That shows our continuing commitment to ensuring that our pensioners benefit directly from the growing prosperity of this country. As a direct result of the minimum income guarantee, a single person will be at least £15 per week better off and a pensioner couple £23 per week better off than in 1997. In conjunction with winter fuel payments and free television licences, that will make a single pensioner at least £18 per week better off, while a pensioner couple will have gained more than £27 per week.
We shall debate pension credit soon. That is another significant measure in the modernisation of the welfare state, giving positive support to more than 5 million pensioners.
Between now and the introduction of the credit, we will continue to ensure that those on low and modest incomes can share in the growing prosperity. The transitional arrangements introduced in last year's order and continued in this year's order allow for that. As promised, the basic state pension will be increased by £3 to £75.50 a week in April 2002 for single pensioners and by £4.80 to £120.70 for couples.
The state second pension that is being introduced this April will, as it builds, give more help to those on lower earnings or with broken work records such as carers and people with disabilities. That will mean additional help to 18 million people who are left out of the current system because of the modernisation of the pension system through the introduction of the state second pension.
As my right hon. Friend the Secretary of State announced earlier, we have reviewed the rules governing the reduction in benefit when one of our clients goes into hospital. Put simply, we will no longer downrate benefit, whether it be for pensioners or other customers, after the recipient has been in hospital for six weeks. In effect we have doubled the six-week rule so that benefit will continue to be paid in full for 13 weeks. As most hospital stays, including those of pensioners, are shorter than 13 weeks, most people will not see a reduction in their weekly income. An estimated 26,000 people will benefit at a cost of around £40 million. Approximately 20,000 of those beneficiaries will be pensioners.
One would have thought from the churlish response of Opposition Members, whether Liberal Democrat or Conservative, that they had debated the matter, done something about it, or even spoken about it. The truth is that they said nothing and did nothing until a public statement only a few months ago by organisations representing older people.
However, we had already made it clear in the public domain that we were reviewing the matter. We have not responded to older people's organisations. Their contribution to the debate came after I had made it clear that we were going to look at the matter with the Department of Health. We have done that. We have been honest and loyal to that pledge. Having done it, we have come forward with proposals.
The hon. Member for Daventry asked what other beneficiaries were affected. This has been a comprehensive statement by the Government. It has related not just to the
retirement pension but to bereavement allowance, widow parents' allowance, widow mothers' allowance, widow's pension, age-related widow's pension, incapacity benefit, severe disablement benefit, unemployment supplement, industrial death benefit, income support, the minimum income guarantee, pension credit, housing benefit and council tax benefit. I would have thought that the hon. Gentleman would be less churlish.
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