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Pension Uprating System

3. Paul Flynn (Newport, West): What the current level of the basic state pension would be for a couple if the system used for uprating from 1980 to 1997 had been continued. [123521]

The Secretary of State for Work and Pensions (Mr. Andrew Smith): The basic state pension for a couple would have been £440 less this year if we had stuck to the pre-1997 formula—£115.30 a week, rather than £123.80. We have guaranteed that, for the remainder of this Parliament, we will increase the basic state pension by 2.5 per cent. or the September retail prices index, whichever is higher. So pensioners will continue to do better under our Government that they did under the Conservative party.

Paul Flynn : I am grateful to my right hon. Friend for that answer. Does it not prove that the various non-means-tested increases that the Government have introduced since 1997 have given pensioners a fair deal—the increases have been at least equivalent to the level that would have existed had the link between pensions and earnings been restored. Is not that a wonderful example? Are not the Government entitled to give themselves a slap on the back for being far fairer with pensioners than what happened during the 17 years of effective cuts, every year, by the mean-spirited, tight-fisted Tories?

Mr. Smith: Yes, and the lesson that the public must learn is: never let them take it away.

Sir Archy Kirkwood (Roxburgh and Berwickshire): Will the Secretary of State confirm that the recent Government response to the Green Paper is the Government's last word on uprating and other matters for the foreseeable future? Does he acknowledge the continuing concern about the relationship between the current architecture of state pensions provision and the

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private sector, particularly in regard to the possible disincentives to save? Will he consider extending Mr. Adair Turner's remit in the pension commission, so that he may continue to study that important problem?

Mr. Smith: Of course I studied carefully and responded to the very helpful report of the hon. Gentleman's Select Committee on those matters, including the suggestion that there ought to be more research about the interaction between the structure of the state system and levels of private and occupational pension saving, which, as he will know, is by no means a simple and straightforward matter. The terms of reference of Adair Turner's commission are very clear; they have been reported to Parliament, and I do not intend to change them, but they include provision for the commission to examine the effects of the state structure on private and occupational pension saving, so far as they are relevant.

Benefits Payment

4. Ian Lucas (Wrexham): What action he is taking to ensure that jobcentres advise customers that benefits can still be collected in cash at their local post office. [123523]

The Minister for Work (Mr. Desmond Browne): The Department is writing to most Jobcentre Plus customers affected by the changes in the way that state and war pensions and benefits are paid. A personal letter and leaflet will let them know about the change to direct payment and will give them the facts that they need to make an informed choice about which account option is most appropriate for them. New customers will have the options explained at the point of claim and, as jobseekers regularly contact our Jobcentre Plus offices as part of normal business, those occasions will be used as an opportunity to discuss direct payments.

Ian Lucas : I am grateful to my hon. Friend for that reply. Is he aware that Wrexham jobcentre has issued local information to customers, stating that they can have their benefits paid directly into private bank accounts but not saying that those benefits could be paid into Post Office card accounts? Will the Department please institute an instruction that jobcentres should advise all customers that they can have their benefits paid into Post Office card accounts?

Mr. Browne: I was aware of the historical position that my hon. Friend reminds the House of—indeed, I am as pleased as he is that the position has now been resolved—as he wrote to my hon. Friend the Minister for Pensions some months ago. I can assure my hon. Friend that all Department for Work and Pensions staff who deal with customers have received appropriate training about direct payments that highlights to staff the options available, including that of making payments into Post Office card accounts, which can be collected from their Post Office branch.

Mr. Oliver Heald (North-East Hertfordshire): The Minister will know that about one in four of the 2.8 million people who have been contacted so far about transferring to direct payment have failed to respond—

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almost 750,000, according to the Department's figures. Problems with changes in the benefits system are not unusual, but the question arises: what happens in 2005 if there are still hundreds of thousands of customers who have simply not told the Government whether they want their pensions and benefits paid into a bank account or a Post Office card account because they have simply not responded? At questions last month, the Secretary of State pledged that all those who wanted to access their cash at the post office could do so. Will the Minister therefore tell the House exactly what failsafe system will be in place to ensure that this pledge is met in all such cases?

Mr. Browne: The hon. Gentleman is turning scaremongering into an art form in relation to the payment of benefits and pensions. He is well aware, as he points out in the preamble to his question, that changes of this nature take some time to follow through. In our view, there is sufficient time to achieve the objectives that have been set. For those who are unable to collect their benefits in the fashion offered by direct payment, an exceptions system will be available, as he is aware.

Mr. Nicholas Brown (Newcastle upon Tyne, East and Wallsend): I congratulate my hon. Friend on his new appointment and wish him well with his new responsibilities. He will find in the modernisation of the working-age services provided by the Department great opportunities to help those who need our help the most. He will also find that there are great opportunities merely to deliver the services that we provide more efficiently. Can he tell us something about the impact of modernisation on the Department's fraud targets?

Mr. Browne: I thank my right hon. Friend for his characteristically generous remarks in welcoming me to my new position. He has served this Government and the people of the United Kingdom with great distinction in a number of key posts in Government and has considerably more to offer. I thank him for the inheritance that I received from him—not only the work that he did in relation to the roll-out of Jobcentre Plus but the significant work that he did in the creation and maintaining of the best labour force market statistics that this country has ever had.

My right hon. Friend asked me a specific question in relation to fraud, which I am pleased to answer. He knows that more than 100 pensioners have their order book stolen every week. Of course, direct payment modernisation will eliminate that risk. He knows the effect that lost or stolen giros can have on the delivery of the principal business of Jobcentre Plus—getting people into work—which I saw for myself last week in Willesden. He also knows that if modernisation has the effect that we hope it will have on fraud, we shall save at least £80 million every year.

Pension Service

6. Norman Lamb (North Norfolk): If he will make a statement on the performance of the Pension Service, with special reference to the speed of dealing with cases. [123526]

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The Minister for Pensions (Malcolm Wicks): The new Pension Service is committed to providing the best possible service to its customers. However, I am of course aware of particular difficulties relating to staffing in the Norwich pension centre, and that pensioners in the east of England are not receiving an acceptable level of service. That is not good enough, and I apologise to those affected. The regional team has developed a recovery plan, which I have discussed with the Pension Service chief executive. This plan will improve processes and increase the number of trained staff to deal with the work load over the coming weeks.

Norman Lamb : I am grateful to the Minister for confirming what the situation is like at the Norwich regional office. Many pensioners are becoming desperate while they wait weeks on end for their claims to be processed. What confidence can we have about the introduction of the pension credit later this year, given the current debacle in local pensions offices, and given what happened with the introduction of the child tax credit earlier this year?

Malcolm Wicks: We have special centres dealing with pension credit applications. With regard to the Norwich pension centre, which I visited in the early days of my career as a Pensions Minister a week or so ago, more staff are being recruited. A further 11 front-line telephone agents joined the centre this week, and last week a further 80 were recruited and are now undergoing training. I am keeping under close attention the situation in Norwich and have apologised to constituents for the poor service. I invite the hon. Gentleman to visit the centre and see for himself what improvements are taking place.

Mr. Tom Harris (Glasgow, Cathcart): I, too, have received a number of complaints from pensioners in my constituency about the length of time taken and the process involved when applying for several of the benefits. However, they are vastly outnumbered by the pensioners in my constituency who are materially better off thanks to some of the benefits introduced by the Government, notably the minimum income guarantee. Will my hon. Friend assure the House that criticism of the process will not divert the Government from their main task of materially improving the quality of life of the vast majority of pensioners in the United Kingdom?

Malcolm Wicks: I thank my hon. Friend, not least for acknowledging the hard work of the very good staff in the Pension Service. When there are problems, we will acknowledge them, but we are moving in the right direction. The service is new and there are many new buildings, as is the case in Norwich, and new staff have been trained. The objective is clear: we want to offer more support for many of the poorest pensioners in our community. That is why pension credit is so important, not least to elderly women, who tend to be poorer than men. Indeed, two thirds of those benefiting from pension credit are women.

Andrew Selous (South-West Bedfordshire): The Minister will know that the script used by members of the Pension Service mentions the Post Office card account very much as the last option available. Will he

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reassure the House that when Pension Service members talk to the public, they will mention the Post Office card account on an equal basis with other means available? If he does not do that, suspicions will persist that the Government do not favour that type of account.

Malcolm Wicks: In all our literature—I am happy to look it at with the hon. Gentleman because I take the matter seriously—and the script used by our colleagues in the centres, the Post Office card account is given prominence alongside other options. Significant numbers of people, not least pensioners, are asking for the Post Office card account—about half those pensioners are asking for that account. That is fine because it meets the pledge that those who want to continue to go to the post office to get their pension will be able to do so, and I assure the hon. Gentleman that that is the case.

Mr. Graham Allen (Nottingham, North): Does the Minister accept that on Friday, a post office in Nottingham, North received the first ever urban post office grant in order to keep it open? The subsidy is worth about £50,000 and we are very grateful. However, the postmaster told me that he needed the subsidy because when pensioners in the area phone the Minister's Department, the Pension Service or the Inland Revenue, they are often told that they should open a bank account but not told to use their local post office. Will he ensure that there is joined-up thinking so that some Departments do not encourage people to withdraw from post offices while others subsidise post offices so that they may be kept open?

Malcolm Wicks: We have to lay out the options to people honestly and fairly. If anything ever goes wrong with that, we will investigate it seriously because that is important. Large numbers of people are asking for the Post Office card account, which is important for the Post Office because if we are to save our post office networks—both rural and urban—post offices must become modern banking centres for the Post Office card account and, increasingly, a place where customers of other banks and building societies may get their money out. That will add to the economic value of post offices in the future.

Mr. Nigel Waterson (Eastbourne): May I begin by congratulating the hon. Gentleman on his recent promotion to Minister of State? Given the Secretary of State's description of the Department's computer systems as "very decrepit", what steps is he taking to ensure that the introduction of pension credit does not degenerate into the sort of fiasco that we are witnessing on tax credits and the Child Support Agency?

Malcolm Wicks: I thank the hon. Gentleman and welcome him to his post. I look forward to his recovery—although we might have verbal brawls, we have not been involved in anything more serious.

The computer system that we are using is tried and tested. We know that it works and it will work in this instance, as the record will show. We are confident that we will deliver pension credit. Let us remember that the poorest pensioners will receive on average £400 a year pension credit and many will get more. Whatever our

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differences on the policy approach, I hope that every Member of Parliament will get behind the measure, because many thousands of people in the average constituency stand to gain from it.

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