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Mr. Nigel Waterson (Eastbourne) (Con): I am grateful to the Minister for giving way, as I appreciate that he wants to make progress. When did he first become aware that the payment required primary legislation?
Malcolm Wicks: That is a favourite question at the moment. I am happy to write to the hon. Gentleman with as much precision as I can. Our early thinking was that legislation would not be necessary, but lawyers—
Mr. Eric Forth (Bromley and Chislehurst) (Con): Not good enough.
Malcolm Wicks:
I am being heckled by a well known heckler, but some of us want to have a grown-up debate. I am trying to answer the hon. Member for Eastbourne (Mr. Waterson), so perhaps the right hon. Member for Bromley and Chislehurst (Mr. Forth) would listen along
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with his Front-Bench spokesman. After legal advice, we realised that in fact we needed primary legislation, which is why we introduced the Bill.
Mr. Henry Bellingham (North-West Norfolk) (Con): We have always had civilised dialogue with the Minister in the past, so could he tell the House the extra cost of having to legislate? Is a figure available for the cost of legal advice, the deployment of civil service resources, printing, time taken and so on?
Malcolm Wicks: I do not think that there is a figure to hand. We may receive an explanation from the hon. Member for Eastbourne, the Conservative spokesman, but I am not sure why the hon. Member for North-West Norfolk (Mr. Bellingham) is puzzled. We obviously operate on a legal footing. If the payments could have been made through regulations, we would have taken that route. The legal advice, however, was that we needed primary legislation. It is the purpose of Parliament to debate primary legislation, which is why we are here today.
Malcolm Wicks: I need to make progress soon, but first I shall give way to the hon. Member for Northavon (Mr. Webb), the Liberal Democrat spokesman.
Mr. Steve Webb (Northavon) (LD): To return to the point about timing, one has a slight sense that the decision was made rather late in day. The Minister said he would write to the hon. Member for Eastbourne (Mr. Waterson), but can he tell us when the Department for Work and Pensions became aware of the Chancellor's intention to make the payment?
Malcolm Wicks: I said that I would do my best to let the hon. Member for Eastbourne know exactly when we realised that primary legislation was necessary, but I am not in a position to write up in one long letter any modest diaries that I may have kept as a Minister. I suspect that it would not be a bestseller, and would be a step too far.
We believe that it is particularly important to target pensioners over 70, as most people in that age group have long since stopped working and are on fixed incomes, so are disproportionately affected by council tax increases, which often take up a larger portion of their income compared with younger households. The evidence supports that conclusion, and our own experience as Members of Parliament is that the very elderly tend to be more financially disadvantaged than people in their 60s. We shall take steps to ensure that the administration of the payments runs smoothly, which is why they will be administered through the tried and tested winter fuel payments system.
The hon. Member for North-West Norfolk, who asked about costs, will be interested to know that the age-related payment will be included with the winter fuel payment, which is currently made to more than 11 million people. That will also keep administrative costs to a minimum—not more, we estimate, than £6.8
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million. The entitlement and payment rules are set out in the Bill. To keep the process simple and transparent, there will be no need to make a claim in the vast majority of cases. People over 70 should get their payment automatically if they have received a winter fuel payment before and their circumstances have not changed, or if they claimed a winter fuel payment this year. We will do all that we can to ensure that the very small number of people who need to make a claim are made aware of the payment and are given the opportunity to receive it.
Although we intend to make the payment for one year only, the Bill provides a regulation-making power so that, if circumstances warrant it, future payments may be made to people over 60 in specified groups. It stipulates that any such regulations will be subject to the affirmative resolution procedure, and will therefore be subject to full parliamentary scrutiny as well as scrutiny and investigation by the Social Security Advisory Committee.
Mr. David Wilshire (Spelthorne) (Con): The Minister said that the payments were for this year only. In the almost certain event that the Government make a further mess of local government finance and force even greater increases in council tax, will he return to the House next year to increase the £100 as compensation?
Malcolm Wicks: I do not accept that Tory hypothesis at all, so it would be ludicrous to try to answer a question more in the realm of social science fiction than fact.
Let me remind the House of the Government's record on pensioner issues. It is this Government who have made sure that no pensioner need live on less than £105 a week for a single pensioner and £160 for a couple. When we came to office in 1997 the amounts were just £75.80 for a single pensioner and £115.15 for a couple. I am sure hon. Members will want to reflect on that contrasting record in their own speeches.
Mr. Bellingham: I accept what the Minister says, but is he aware that the majority of pensioners in constituencies such as mine are worried about the extent of means-testing that is going on? I appreciate that the payments under discussion will not be means-tested, which is a plus point. How many pensioners are now means-tested? What is the total figure, and what was the figure five years ago?
Malcolm Wicks: I had intended to deal with our record on pension credit, albeit briefly, to provide some context. As a result of pension credit and the other measures we have introduced since 1997, the poorest third of pensioners are, on average, £1,750 a year, which is more than £33 a week, better off than they were in 1997. The disproportionate increase for the poorest is because of targeting. Does the hon. Gentleman think it wrong that we are giving more money to the poorest third?
As I said recently at oral questions, I do not think that any of us, as MPs, would want to go up to elderly people in our constituency who have benefited from pension credit and tell them they are victims of some terrible means-testing. Indeed, an application for pension credit
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is usually made over the telephone and the form is filled in by an expert, rather than by the elderly person. There is a whole new approach to the notion of income-testing.
David Winnick (Walsall, North) (Lab): As regards targeting, or means-testing, is it not a fact that before we came to office, and before there was any winter fuel allowance, the only help that pensioners got was the cold weather payments, and it had to be freezing for seven consecutive days, no less, before the allowance was paid, and they had to be on income support to receive even the miserly £7 or £8 a week? Compare that with what we have done in office.
Malcolm Wicks: There is a further comparison to be made between the former Administration and our Administration in respect of VAT on fuel. On a theme that is dear to my hon. Friend's heart and mine, as he knows, the energy efficiency programmes are also important.
Through pension credit the Government are for the first time rewarding those who have saved and who so often just missed out in the past under the old minimum income guarantee system. Despite the constant knocking by those on the Opposition Benches, pension credit is working well. It is already helping 2.4 million pensioner households—nearly 3 million individuals—across our country. And we must not forget that it is this Government who introduced the winter fuel payment and increased those payments from £20 in 1997 to £200 today, with an extra £100 for those over 80. Also, it is this Government who give free TV licences to the over-75s.
We will be spending about £10 billion extra on pensioners this year as a result of the measures introduced since 1997—£10 billion. This includes about £5 billion that is being spent on the poorest third of pensioners—targeting, again, the very people who need help the most. That is almost £6 billion more than if the basic state pension had been linked to earnings since 1998 and nothing else had happened.
Around 80 per cent. of recently retired women pensioners do not have a full state pension because of broken national insurance records—something often forgotten by those on various sides who are campaigning to restore the earnings link. We are supporting women particularly through pension credit. More than half—54 per cent.—of those eligible are single women, and two thirds of those who benefit overall from the new credit are women.
The measure before the House today will benefit a large number of elderly people. About 5 million households will receive the payment at a cost of around £500 million. We are again able to give extra help to our eldest pensioners. The Bill represents yet another step in our mission to tackle poverty in old age. Alongside many other measures, it recognises the contribution that our elders have made to our country.
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