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Malcolm Wicks: I am following the hon. Gentleman's argument, but does he accept that one of the problems
 
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with putting all the money into the national insurance pension is that many vulnerable people, particularly elderly women, do not have full national insurance contributions records, and would not therefore benefit? How does his critique of the £100 payment for the over-70s—I am not sure whether he is criticising winter fuel payments—relate to his party's policy of age-relating the basic pension in favour of the older elderly?

Mr. Webb: The Minister makes two good and perfectly fair points. That is why we believe that when we try to improve the pension, we should do it on a citizenship basis. It may not be feasible to do that for all pensioners in one go, but the starting point needs to be that a citizen, particularly an older citizen, qualifies for a pension, and recognition of the fact that because many older people have inadequate contribution records because of caring responsibilities and because, as women, they have spent a lot of time out of the labour market, they have suffered. For as long as the Government insist on using the contributory basis to go forward with pensions policy, the groups that he has highlighted will continue to suffer. That is why our citizenship proposal will benefit older pensioners and women in particular. He is right to highlight that group. I am grateful for that, and I am glad about his concern for that group. We will address that group's problems with our policies, and it is time that the Government did so too.

On the issue of how best to support our pensioners, clearly, the hon. Gentleman has mentioned restoring the earnings link, which we will discuss at greater length next week on the Pensions Bill. If we are concerned about the effect of council tax on pensioners, increasing a woefully inadequate pension by a few percentage points above inflation is not the way to do it. In part, that is precisely because of the reasons that he gave—many poorer pensioners do not get full pension, so they will get less from the restoration of the earnings link—but it is also because the pension is so inadequate.

To raise a few issues to which we might return in Committee, I agree with the hon. Gentleman about the eligible date for this payment. When dealing with winter fuel payments, some of the recipients are not yet state pensioners, so there might be an argument that more time is needed to include them in the system, although I have some doubts about even that. A more credible argument is that given that we are not paying pensions to some of those people, but they are 60, they qualify for winter fuel payments, and because those people must be identified, a time lag is needed between the day on which they qualify and the day on which we pay the money, although I think that that argument is overdone.

That argument does not apply to the over-70s, however, as they are all in the system already, and I presume that practically all of them will already be getting winter fuel payments. Therefore, why do we need a qualifying date in the third week in September to pay them the money by Christmas? To coin a phrase, we know where they live and who they are. Given our desire to support older pensioners, why do we have to say that someone who is 70 in October cannot have a payment to help them with their council tax in December— when they will be 70 and two months—because they were not
 
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70 in September. Given that they are already in the system, and the Department knows their date of birth—even its crumbling computers will know that, as it will be paying their winter fuel payments—there seems no reason for that early entitlement date. Changing it would not cost the Government huge sums of money. A set of pensioners will feel aggrieved that they do not qualify for the payment, even though they are 70 in December, because they were not that qualifying age three months earlier in September, even though the Department knew all about them—[Interruption.] I am happy to give way if the Minister wants to challenge that.

Mr. Pond: I am rather puzzled, because wherever one sets the point of qualification, some people will be on the wrong side of the line. I am afraid that that is inevitable.

Mr. Webb: With respect, that is not the point. My point is that there is a three-month gap between the date on which someone becomes eligible and the date on which they get the money. Why must it be three months? Because those people are already in the system, November could be the eligible date, for example, which would allow more people who are 70 at the time of payment to get the money, which is surely what we want.

Mr. Waterson: I am following the hon. Gentleman's point, not least because it mirrors to an extent one that I made. Can he see—because I cannot—any practical objection to making the payment to anyone who becomes 70, or is 70, during that council tax year?

Mr. Webb: I see where the hon. Gentleman is coming from. I guess that his suggestion is that perhaps it should be a 70th birthday present of some sort, so that it might be paid at different points throughout the year. I can see the administrative attraction of making all the payments in one week, give or take a little, and of drawing attention to all the publicity at a particular point rather than steadily through the year. There are attractions in bunching the payments. That said, I cannot see why three months are required to work out who is 70.

Mr. Chope: Does the hon. Gentleman accept that his answer to my hon. Friend the Member for Eastbourne (Mr. Waterson) does not address the issue of someone who is 70 now, and who is part of a household in which no one else is over 70, and who dies in August but has already had to pay the council tax bill for this year?

Mr. Webb: That is a fair point. The honest truth is that we all know that this is nothing to do with the council tax. For as long as the Government want to maintain the fiction that it is, however, the hon. Gentleman has a perfectly fair point. One would sympathise hugely with a household that has already started to pay council tax at the high levels that people must pay, but has never got help because sadly it suffered a bereavement during the year.

Andrew Bennett: There is a slight flaw in that argument. It is very sad that someone dies, but at the point at which they die, the household will almost certainly get the single person rebate on the council tax.

Mr. Webb: For several months while that person is still alive, however, the household will pay the full
 
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council tax at the higher rate that people must pay, yet it will not get anything towards the bill for that period—the discount will only apply for the remainder of the year.

I always want to save the Government money if I can. In relation to winter fuel payments, I recall that the Government were taken to court—and they lost, if I remember rightly—by British citizens living elsewhere in the EU. I do not know if the Minister has a view on this, and he may want to deal with it in his winding-up speech. As I recall, at first, winter fuel payments were meant to be paid only to UK citizens living in Great Britain. A court case was then held, and I think that I am right that winter fuel payments can now be paid to British citizens living elsewhere in the EU. What I am not clear about is whether this Bill, which tries to restrict payments to people who are resident in Great Britain during the qualifying week, will be subject to the same legal challenge, because winter fuel payments now have to be paid across the EU. I am not clear as to why these payments will only be paid to Great Britain residents. Clearly, the argument will be that people elsewhere in the EU do not pay the council tax, but the Bill does not mention the council tax, because it is nothing to do with it. I merely wish to save the Government the trouble of a legal challenge.

As I said at the outset, we know what the Bill is all about. We will not stand in its way, as none of us begrudge £100 for elderly pensioners who certainly need the money. The key point, however, is that once again the Government are producing a sticking plaster to deal with problems elsewhere in the system. We have an unfair local tax system that is not being dealt with satisfactorily through an ineffective rebate system, so we need a sticking plaster. We have an inadequate basic pension which is not being dealt with satisfactorily through an ineffective means-testing system, so we need another sticking plaster. One day, I hope—and I hope that day comes soon—we will have a Government who introduce fair local tax and decent pensions, and we will not need Bills like this.

2 pm

Sir Paul Beresford (Mole Valley) (Con): Before you took the Chair, Mr. Deputy Speaker, the Minister carefully explained—notwithstanding what the hon. Member for Northavon (Mr. Webb) said—that the Bill was intended to help pensioners with their council tax. He went through the usual performance of explaining that council tax rises had been dramatic over the past couple of years—which they have been—and blaming local authorities. I believe that if the Government examined the real causes of the increases they would see that had they adopted a different approach earlier, we would not need the Bill and we would not need the money for pensioners. Indeed, that might be the case if they adopted a different approach even at this late stage. Pensioners in my area will of course welcome the money. Pensioners aged 70 and above, and those under 70, will be worried by the council tax rise that they face—courtesy, again, of the Government.

About two years ago, ODPM Ministers explained that the council tax was reasonable. The huge outcry that prompted this panic reaction was generated at that time because people, especially in London and the south-east, were hurt by the tax. I believe that the
 
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Government are largely responsible for that. The Minister blamed local authorities, and I accept that some are to blame. Many Labour and Liberal councils' running costs are exorbitant compared with those of Conservative councils. The Liberals' idea of a different tax system should be taken with a pinch of salt: in Mole Valley the group led by the Conservatives and Independents raised the council tax by 5 per cent., but the Liberals wanted to raise it by 18 per cent. Nevertheless, I believe that central Government are the main cause of the increases.

The English council general fund has increased by 72.5 per cent. over the past 10 years. It consists of councils' running costs, and is directly reflected in council tax. One of the main reasons for the increase, in my view, is the Labour Government's paranoia, and their wish to centralise and control. They have introduced best value comprehensive performance assessments, various inspections, including Audit Commission and school inspections, and complex social services procedures. In addition, they have produced target after target. If there is a difficulty with local authority performance in any area, the Government will come up with yet another target—and all that costs money. The cost of inspections, and reactions to inspections, is reflected in council tax—dramatically, because of the gearing effect—and in the position of our pensioners.

The Government's last thought is for output and whether value for money has been obtained. By abolishing competitive tendering, they have hurt some councils that have tried to save council tax. Many hidden costs—best value and CPAs, for instance—can paralyse council staff for many weeks as they prepare for inspections, and in addition there is the process of the inspections themselves. All that is reflected in the additional cost to pensioners, whom the Bill is intended to help.

The Select Committee on the Office of the Deputy Prime Minister is conducting an inquiry into the costs, and there has been quite a reaction. Some councils' costs are fairly dramatic. A Havering councillor tells me that the Government have imposed extra planning requirements on the council, which cost another £150,000. Performance indicators add another £400,000 and external inspections a further £400,000. Best value reviews mean another £150,000; responding to Government consultations, another £100,000; Government returns, another £200,000; and bidding for grants, another £300,000. All that goes on to council tax, with gearing attached—at a time when the Government have reduced funding for London and the south-east dramatically year on year.

Yesterday, Somerset county council told the Committee that it had lost £30 million year on year as a result of the change in the funding formula. Surrey had lost £39 million. Those losses, which came at very short notice, prevented the councils from responding with savings to cut costs for all pensioners—indeed, for all local people.

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