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Mr. Steve Webb (Northavon) (LD): This is the five-year plan of the Department for Work and Pensions.
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Can the Secretary of State tell us what happened to "and Pensions" today? After seven years in office, all the Government have promised is a statement of principles in a couple of weeks that will underlie pension reform. What can Britain's pensioners expect by way of action? Have not women pensioners suffered injustice for long enough? In a five-year plan from the Department, will they not have expected something that amounted to action, not just a statement of principles? Can the Secretary of State update the House on how far he has got with persuading the Chancellor to adopt the Liberal Democrat policy of a citizen's pension? I welcome his openness on that front—how is he getting on with his mates?

On incapacity benefit, can the Secretary of State confirm that his central thesis—I quote from his statement—is that "benefit increases with time, creating an incentive to stay on it for longer"? Can he confirm his remark in the press—or was he misquoted this morning—that £75 a week of incapacity benefit was "comfortable"? That is the word that he used. Is it his thesis that people are comfortable on incapacity benefit of £75 a week and choose not to seek work? Where is the evidence for that basis of his reform? Can he confirm that incapacity benefit is high where joblessness is high and that, for many people on IB, there are not jobs for them to go for? Is there a danger that, under his incentive structure, a lot of those people will be forced to go through the motions of applying for jobs when there are not jobs there to take?

Can the Secretary of State confirm that, out of the 2.7 million on incapacity benefit, nearly 1 million get no money? Can he confirm that that is a fast-growing group and that real spending on incapacity benefit has fallen by £2 billion since 1997? What will he do for that group? As people in that group are not entitled to any cash from incapacity benefit, how does changing the rates of incapacity benefit affect their incentives? How will that group, which is the only fast-growing group of incapacity benefit recipients, benefit from his reforms unless he changes income support, too? Can he tell us, therefore, whether income support for disabled people will also be changed in the way he has described?

Seven years ago, it was said that 1 million disabled people wanted to work. Today, the Secretary of State used the same figure again, which is testimony to the failure of these repeated announcements to deliver. Is not incapacity benefit itself a barrier, because it is very much an all-or-nothing benefit? Is not it true that disability is much more shades of grey? Many disabled people can do some work, and the conditions of many fluctuate. Is not the system still far too rigid? Should not there be a partial capacity benefit to go with the grain of what people can do, instead of it being yes or no, black or white?

Britain's pensioners will be disappointed by the statement. We have yet to see evidence that people on incapacity benefit will get the support that they need to improve their life.

Alan Johnson: First, on pensions, as I made clear earlier, and it is in the five-year plan, we will publish a statement on our pension principles. The hon. Gentleman asks what we have done for pensioners. He should look at the Pensions Act 2004 and consider the fact that pensions credit has lifted 1.8 million pensioners
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out of abject poverty. A recent report by the Institute for Fiscal Studies, with which he has an intimate relationship, showed that, for the first time in history, pensioners are no more likely to be in poverty than any other group in society. That is significant. Age has always meant the workhouse—in Charles Booth's day in the early 20th century, it was linked to poverty. The measures that we have taken to deal with abject poverty are turning that situation around.

The Pensions Commission made the point that the last thing we want is for politicians to have a knee-jerk reaction to a problem that is 20 to 25 years down the road. Its advice is sound. There is no instant solution to that problem. We are keen to achieve a political as well as national consensus about where we should be in 2050, so that we can ensure that whatever we implement is consistent and remains in place.

I do not know where the statement about £75 came from. The hon. Gentleman keeps coming up with statements—

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): He makes them up.

Alan Johnson: My hon. Friend says from a sedentary position that the hon. Gentleman makes them up. I have never said that someone on £75 a week is comfortable—quite the opposite. Indeed, we are saying that those with chronic sicknesses, who will probably never be able to work again, require more support, as do people who can, with rehabilitation, get back to work, provided that they co-operate with the arrangements that we are putting in place. Therefore, I do not believe that anyone on £75 a week is comfortable.

As for where the jobs will come from, we now have not just the lowest unemployment for 30 years, the highest employment in the G8, the lowest redundancies since records began, 55 per cent. of lone parents in work, and more than 50 per cent. of disabled people in work, but 600,000 vacancies. We have a good, strong economy. The hon. Gentleman can come with the hon. Member for Havant (Mr. Willetts) to a pathways to work area to talk to people in Gateshead, south Wales and in difficult areas. It is not lack of jobs that is the problem; the problem is helping people to overcome the barriers to get back into work.

I know that it is difficult for the Liberal Democrats, who are kind of a trumped up think-tank. When it comes to implementing policies, it would be nice for them to say either what their policy is or what the problem with our policy is. We got a little hint of it in relation to the "shades of grey". We agree—we are pleased that the Lib Dems are adopting our policy—that there are shades of grey. The one-size-fits-all solution, the single benefit, no matter what the sickness is, with no flexibility for people to work without fear of losing their benefit, and the things that we have done on earnings, drive this reform. I look forward to the Liberal Democrats joining us in heralding it as the breakthrough that it is.

Mr. Frank Field (Birkenhead) (Lab): May I draw attention to the confidence of Labour Members and the country in the skills of my right hon. Friend in tackling welfare reform? I urge him, however, to be slightly more
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radical than he has suggested he will be today. Does not the fact that we now have a record low level of unemployment offer the opportunity to abolish benefit for the unemployed and for those on incapacity benefit, to have a single benefit for those of working age who are not in work and to assume that everyone, from the moment that they sign on, will, when they can, seek work, with all our efforts being tailored to get them to achieve that objective?

My worry about the scheme is that we as politicians are not very good at deciding who is capable of work and who is incapable. In my opinion, some of the people in Birkenhead who cannot get incapacity benefit ought to be getting it. Others are rightly claiming and getting it, but there are many other claimants who ought not to be getting it, but who spend all their energy on ensuring that they remain on it. How will my right hon. Friend's reforms address that issue? Does not the low level of—

Mr. Speaker: Order. The right hon. Gentleman knows that I have given him more than one supplementary.

Alan Johnson: I accept that, at a time of low unemployment, we can be bold and radical. I believe that the proposals are bold and radical, but obviously there is still a process to go through. It is a five-year strategy and, as I said in my statement, we need to talk to everyone with an interest in this issue about how we firm up these proposals.

I am not immediately attracted to the argument in favour of a single benefit. As I said to the hon. Member for Northavon (Mr. Webb), a one-size-fits-all solution is difficult to achieve, but my right hon. Friend is right to argue, as he has consistently done, for benefit simplification. Such simplification presents us with a big challenge. The various benefits in the system have been layered one on top of the other, and there is a real case for radical transformation and simplification. In doing so, it might be possible to provide some of the improvements that my right hon. Friend wants.

My right hon. Friend mentioned people on incapacity benefit in his constituency, which is an issue in many constituencies, particularly in the north. I have not given up on those people and I am not going to worry them by saying that a draconian measure will be introduced. In fact, the new measure, which applies to new benefit claimants, is not draconian. I want to help get those people back into work. Pathways to work is in its very early stages and we have yet to deal with the stocks; indeed, we have only reached those who have been on incapacity benefit for 12 months. We are discovering that there are real lessons to be learned about how to reach those people. A combination of reducing the inflow and reducing the number on the stocks—for the first time in years, the stocks are down by the albeit small figure of 9,000—is the way to ensure that, regardless of the economic situation, those people's lives are enhanced and transformed.

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