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The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle):
As at 31 October, more than 154,000 pensioner households were receiving pension credit in Wales, with an average weekly award of almost £42 a week. In Monmouth, more than 3,000 households were receiving an average of almost £42 a week extra as a result of pension credit.
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Mr. Edwards: I welcome that answer. Does my hon. Friend agree that the 154,000 households in Wales, including the 3,000 in Monmouth, will find pension credit an incredibly valuable resource, but does she acknowledge that perhaps a third of the poorest pensioners who may be entitled to the credit do not get it? What is being done to improve take-up?
Maria Eagle: I acknowledge that some pensioners who are entitled to the credit have not yet taken it up, but we are doing a lot of work to try to improve the situation. I do not agree that it is necessarily the poorest pensioners who have not taken it up; in many instances, it is those who would receive only a small extra amount and have judged that it is not worth their while to claim it. We are none the less redoubling our efforts in the Department to re-contact people we think most likely to be entitled who have not applied, and our local service is working in all communities to try to improve take-up. In my hon. Friend's constituency there were 235 home visits in October, and since April there have been 1,482 home visits in south-west Wales. We are out there, day in, day out, trying to encourage pensioners to take up their entitlement.
Many pensioners from Wales who might have been eligible for pension credit have moved overseas, for all sorts of reasons, perhaps to live with their families, in countries where, unfortunately, the uprating of pensions does not apply. Can the Minister now have another look at those pensioners from Wales, and indeed the rest of the United Kingdom, who may be eligible but live in one of the 145 countries where the pension simply has not been uprated?
Maria Eagle: The hon. Gentleman knows perfectly well that there are different agreements with different countries, and there are ongoing court cases in respect of this matter. I would be interested to know if that was a pledge from the Back Benches of the Conservative party, even if it relates only to Wales, because we will add it to the extra cost of a Tory Government.
The Secretary of State for Work and Pensions (Alan Johnson): Nine out of 10 people expect to work again when they first claim incapacity benefits. The pathways to work project is helping them to realise that aim.
As my right hon. Friend the Chancellor of the Exchequer announced on 2 December, we will extend the pathways to work pilots to an additional 14 Jobcentre Plus districts from October 2005. This will mean that our pathways approach will cover about a third of the country and be available to about 900,000 people on incapacity benefits.
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Mr. Rosindell: I thank the Secretary of State for that comprehensive reply, but am I not right in believing that since 1997 there has been a 53 per cent. increase in the number of people claiming incapacity benefit on grounds of mental health or behavioural difficulties, which is nearly two out of every five claimants? Is not the truth that this rise is absolutely out of control?
Alan Johnson: The answer to both questions is no. The hon. Gentleman should refrain from believing everything he reads in the press. First, the number of people coming on to incapacity benefits has fallen by a third; had it continued on the same trend as under the Conservative Government it would now be more than 4 million rather than 2.7 million. Secondly, on this so-called explosion in the number claiming on mental health grounds, there were 210,000 in 1997, and there are now 230,000hardly an explosion. The same press report, which talked about 500,000 men who may have swapped their income because it was so profitable to go on to incapacity benefitthat is, 3,500 a yearcame from a Bank of England survey, which clearly stated that it was about what happened in the late 80s and early 90s in the context of massive economic decline. It said:
Mr. Stephen Hepburn (Jarrow) (Lab): What is the Secretary of State going to do to improve the standard of medical examination? Doctors are paid an absolute fortune to disbar genuine claimants from their rightful benefits on often very dubious grounds.
Alan Johnson: I have not heard that particular criticism before, but I am willing to look at any cases that my hon. Friend might want to raise with us. The personal capability assessment is one of the most stringent gateways to incapacity benefit in the world, as judged by the Organisation for Economic Co-operation and Development. Indeed, in terms of the medical profession's work, the problem lies not with the PCA but at the turnstile, as it were, in that the sick-note culture is putting many people off working when it would be better for their health to stay at work. My right hon. Friend the Chancellor of the Exchequer announced an extension of the existing trials to enable rehabilitation and to allow Employment Service people to get involved in GPs' surgeries, in order to ensure that people do not go down the incapacity benefit route. We should bear it in mind that the record shows that those who are on incapacity benefit for a year will remain on it for eight years, and that those who are on it for two years will die on it.
Mr. Paul Goodman (Wycombe) (Con): The figures quoted by my hon. Friend the Member for Romford (Mr. Rosindell) were official figures, not press figures, and according to them incapacity benefit claims made on mental health and behavioural grounds now number more than 1 million for the first time. But regardless of that, if the Secretary of State believes that these claims are under control, can he tell us when they will stabilise or fall?
They have already fallen for the first time. According to the most recent labour market statistics, there has been a very small fall of 4,000.
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[Interruption.] The hon. Gentleman shakes his head but they are the statistics. Of course, we want to go much further, but I should make the rather obvious point that we are still dealing with the problems arising from the Conservative Government's policy of transferring people from unemployment benefit to incapacity benefit; indeed, my hon. Friends still have to deal with such problems day in, day out in their constituencies. That policy left us with 2.6 million people on incapacity benefit when we took office.
The hon. Member for Wycombe (Mr. Goodman) is of course right to say that this issue needs to be tackled, and it is being tackled effectively for the first time through pathways to work, which is enabling the Government to give a helping hand to those who really want to re-engage with society, but who did not have the necessary help and financial support in the past.
Kevin Brennan (Cardiff, West) (Lab): Many people on incapacity benefit are not capable of holding down conventional full-time jobs but are nevertheless keen to work, and they might be able to hold down part-time jobs if the right opportunities are provided. What are the Government doing to help such people?
Alan Johnson: My hon. Friend will have been pleased to hear the Chancellor announcing in the pre-Budget report that we will look at the rules on permitted work. That will go a long way towards helping my hon. Friend's constituents and others who are in that situation.
The Minister for Pensions (Malcolm Wicks): For most people, a good occupational private pension will be a key part of a comfortable retirement. We are therefore keen to increase private pension provision, which is why we introduced stakeholder pensions and why we are taking forward our radical programme of pension reform. The Pensions Act 2004 will make it easier for employers to run pension schemes, and along with our programme of informed choice, it will help people to plan for and save for their retirement. The Turner commission is advising us on the future of pensions, and under the terms of the 2004 Act the pension regulator plays a crucial part in providing security and integrity. I am pleased to announce that David Norgrove has been appointed chairman of the new pensions regulator. He will take up his post in January.
Given that one of the Government's excuses back in 1997 for their £5 billion annual raid on pensions was the strong rise in the UK stock market under the previous, Conservative Governmentsince when the UK market has been one of the worst performing major markets in the worlddoes the Minister not feel duty bound to take rather more seriously the plight of private pension holders facing a £100 billion black hole? I am thinking not least of constituents of mine approaching retirement with
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Turner and Newell pensions, whose enormous prospective shortfalls will not be remotely covered by the Government's compensation scheme.
Malcolm Wicks: As the Secretary of State said, we are looking at the matter of Turner and Newell very carefully. We have the institutions, the financial assistance scheme and, more importantly, the PPF in place, should any further action on any scheme be required. On the abolition of payable tax credits, the hon. Gentleman is making a very partisan point. It was an essential part of a package of corporation tax reforms that included both the main and small companies. [Interruption.] While the Secretary of State is enjoying the heckling coming from the hon. Member for East Worthing and Shoreham (Tim Loughton), the question is whether the Conservative party would abolish the policy
Rob Marris (Wolverhampton, South-West) (Lab): May I suggest to my hon. Friend that the way to increase private pension provision is to continue doing what the Government have been doing, which is to bolster confidence in the private pension system? Given that £14 billion a year goes on tax relief and that Department for Work and Pensions research shows that it has no effect on bolstering those pensions, I seek my hon. Friend's reassurance that tax relief for private pensions will not be increased and that the Government will continue to bolster confidence and to bolster the state system.
Malcolm Wicks: As my hon. Friend knows, issues of tax incentives are a matter for the Chancellor. There are certainly some major tax incentives in the system to encourage people to invest in occupational schemes. Our priority is to ensure that the many millions of people who are not in decent work or occupational pensions have the opportunity of being so, and we would like it to be on a voluntary basis. The Employer Task Force on Pensions has made some interesting recommendations, but whether or not compulsion is necessary is a matter that we have asked the Turner commission to review for us. We will look at its recommendations and make a judgment in due course.
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