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Pension Service
6. Annabelle Ewing (Perth): What plans he has to improve the operation of the Pension Service. [117288]
The Secretary of State for Work and Pensions (Mr. Andrew Smith): The Pension Service is working well. It is geared to providing a high-quality personal service that puts the needs of pensioners first. Both its call centres and local service have been well received by pensioners. A key task is the delivery of pension credit from this October, for which preparations are well in hand. I will be publishing quarterly updates on overall progress during the run-up, the first in July and the second in October. The figures for October will be published in November and there will be regular monthly reports thereafter.
Annabelle Ewing : I thank the Secretary of State for his answer, but has not centralisation of services led to
difficulties for pensioners such as those in my constituency, who have had to travel far greater distances to obtain comprehensive advice? Taking into account the imminent implementation of the pension credit, can he today give an assurance that we will not see a repeat of the recent tax credit fiasco?
Mr. Smith: One of the things I sensibly did, anticipating the question, was to check whether the Dundee call centre, which serves the hon. Lady's constituents, had had any problems with its telephony. I was assured that it had not. Indeed, the system was working very well and at least 94 per cent. of calls got through first time, which is a good record for any call centre, whether in the public or private sector. On personal access, I know that there are surgeries every Thursday at the A.K. Bell library in Perth, on the first Tuesday of the month at the Kinloch Rannoch medical practice, and on the last Wednesday of every month in Crieff library, as well as at Kinross-shire day centre in Kinross on the last Tuesday of every month. If the hon. Lady or indeed other hon. Members have suggestions as to how the surgery arrangements for constituents offered by the Pension Service can be improved, I and the Pension Service will be very pleased to consider them.
Miss Anne Begg (Aberdeen, South): I have heard a couple of anecdotal stories about some pensioners who are having to wait up to three months to get their first pension payment once they reach the age of 60 or 65. I have written to the Department, and am awaiting a reply, on whether that happens only occasionally or is more widespread. Will my right hon. Friend assure me that he speaks to people from the Inland Revenue to make sure that lessons are learned from the implementation of the child tax credit—particularly with regard to the scanning-in of documents, which sometimes leads to the misreading of information—so that such hiccups do not happen when the pension credit comes in?
Mr. Smith: On my hon. Friend's first question, after the statement, I shall go back to the Department to find an answer concerning her correspondence. I do not believe that such delays should be in any way typical and I should be disturbed if they were. I shall look into the specific case that she raises.
On the lessons for the roll-out of the pension credit, and our telephony, scanning-in and other services, I assure my hon. Friend that we are learning from other tax credits. That is one of the reasons why, in introducing the pension credit, we have been careful to phase the publicity and the projected take-up, so as to align them with the capacity that the system must have in place to meet demand. It is early days, but I have had positive reports of pensioners' experience in applying for the pension credit using the telephone system.
Retirement (Financial Independence)
8. Mr. Peter Viggers (Gosport): What steps the Government are taking to promote financial independence in retirement. [117290]
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): We must renew the pensions partnership between Government, employers, employees and the industry to ensure that individuals feel that saving for their retirement is worth while and safe. The recent Green Paper sets out our proposals for greater security, simplicity and better information to promote pensions saving.
Mr. Viggers : The Government have presided over a crisis in pensions provision. The savings ratio has halved and 40 per cent. of final salary schemes are closed to new members. Some schemes have collapsed completely, resulting in millions of 30 to 40-year-olds no longer looking forward to independence in retirement. Those are matters of fact. My question is this: is this the result of incompetence on an epic scale, or does it suit the Chancellor's tendencies towards socialism to have a rising two thirds of all pensioners on means-tested benefits?
Maria Eagle: The hon. Gentleman's original comments gave too bleak an assessment. What he calls "means-testing", we call giving current pensioners some decency in retirement. The pension credit will end the weekly means test, while giving an extra £400 a year on average to half of all pensioner households, tackling pensioner poverty. His party is committed to keeping means-testing by abolishing the pension credit. He is committed to a weekly means test, pound-for-pound withdrawal of benefit and impoverishing today's pensioners as some kind of incentive to today's working-age people to save. After all, that was the policy of his party when it was in government.
David Winnick (Walsall, North): May I tell my hon. Friend about a 57-year-old constituent who, along with all the other employees of the company mentioned earlier by my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase), Chart Heat Exchangers, lost his job, after 23 years, and his pension? Can my hon. Friend understand the feelings of my constituent, who faces a retirement of absolute poverty because the company did not defend or pay into the pension scheme, as it promised? How would we as Members of Parliament like it if we were treated with such contempt when it came to our retirement?
Maria Eagle: My hon. Friend is right to reflect the feelings of his constituents, and I should be happy to meet him and other right hon. and hon. Members with constituents affected by this closure. If we are unable to renew our pensions partnership in order to have simpler pensions, to balance simplification and clarity, to help employers to deliver their pensions promises, to improve security and to ensure that members receive the benefits they have paid in for, our system of voluntary provision will not survive. That is why the Green Paper outlines our proposals. If we are not able to do that, we will have to be more radical and, as many hon. Members think, look to compulsion. The Pensions Commission is there to look at that if necessary.
Mr. David Willetts (Havant): May I explain to the Minister that our policy is that pensioners should be less dependent on means-tested benefits and should enjoy
greater financial independence through more funded savings? That is very simple and it is what pensioners want. On the statement that we will hear from the Chancellor later today, 11 million pensioners who care about their independence will be worried that he is going to change the index used for uprating their benefits from the retail prices index to the new index: the harmonised index of consumer prices, known as HICP. Will the Minister give us and those millions of pensioners an assurance that there will be no reduction in the value of the uprating of their benefits if the index for measuring price inflation is changed?
Maria Eagle: Pensions and benefits are linked to the retail prices index, which is a slightly different measure from the one that the Chancellor is considering changing in respect of these other matters. We have already committed ourselves to increasing pensions by more than the RPI for the rest of this Parliament, as the hon. Gentleman knows. There is no question of any of the changes that my right hon. Friend the Chancellor might deal with later, to which the hon. Gentleman refers, having an impact on that.
Mr. Tony McWalter (Hemel Hempstead): Can my hon. Friend give any help or succour to Mr. Humphrey, a constituent of mine whom The Guardian named on Saturday, and who was part of a delegation that marched to Downing street yesterday? Having worked for a company called Dexion in my constituency, he was looking forward, at the age of 58, to a pension of £150 a week. That pension has been slashed by 80 per cent. to £30 a week. Does my hon. Friend accept that, if she cannot give any comfort to people in that position, surely those who are responsible for such dreadful administration of a pension scheme should be brought to book somehow?
Maria Eagle: Cases such as this, which Members have come across in various situations in their own constituencies, have ensured that we have had to look at how to renew the pensions partnership. Unless we can have better safety and security, people simply will not save into pensions products in future. Of course, in such a situation everybody would be worse off. The Green Paper will introduce our proposals shortly, in response to the question of how to renew that partnership. If we do not do so, there will be problems in the future in respect of everybody.
Mr. Paul Goodman (Wycombe): Since the Government's assumed take-up of the pension credit for next year is 67 per cent.—an assumption that they themselves describe as ambitious—does it not follow that they expect non-take-up to be 33 per cent.? In other words, more than a third of our vulnerable pensioners will gain nothing at all next year from the pension credit.
Maria Eagle: We want everybody who is entitled to pension credit to take it up as soon as they can get on the telephone and put in their applications. It is simply not the case that we want to place some form of ceiling or cap on those who are entitled to claim. Of course, we have working assumptions about what we want to get done within a certain time, but those are targets, not ceilings. We hope to outstrip them, and we want
everybody who is eligible for the pension credit to claim it. If hon. Members would get behind the Government, stop calling the provision means testing and urge their constituents to claim their entitlement, perhaps more might claim rather sooner.
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