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Mr. Willetts: I am grateful to the hon. Gentleman for giving way a second time. I understand what he is saying, but moving from 75 to a lower age will get more and more difficult and expensive to do as the gap gets wider. Although he wants to get rid of the cliff edge, it is getting higher as every year passes because the gap between the pension between the ages of 65 and 74 and the pension at age 75 upwards will surely get wider under his approach.
Mr. Webb: At the same time, however, there will be growing accruals of second-tier state pension rights as well. As the hon. Gentleman suggested, the goal must be not two grotty state pensions and a failing means test on top, but one decent state pension. That must be where we head.
I return to the adequacy of benefit, especially for childless people. Because the Government rightly accept that children were very important, they have a child poverty target. Although they consider pensioners important, they do not have a goal of abolishing pensioner poverty, as far as I am aware, or perhaps that is another target in the statement that none of us can remember ever reading. There is no target to abolish poverty among childless people, but surely that matters as well. What are we doing about benefit rates for childless people who are left on benefit? Clearly, if they can get into work, that is great and we will support it, but not all of them will. It would be odd to have a big debate about the rates of benefit for next year without any of us raising the question of their adequacy.
I shall use two words that are seldom heard in the House: social fund. People on the social fund are, in many ways, the forgotten masses. I strongly suspect that many of them do not vote and are not floating voters. I do not suppose that any of the polling that any of the parties do flags the social fund as a big issue for target voters in marginal seats. In principle, access to cheap credit ought to be a good thing, yet people have accumulated so much debt that hundreds of thousands of them are not living at the benefit rates in the orders, but below those rates, pretty much indefinitely, because they have previously paid for so-called luxuries such as a cooker or a fridge.
The new Secretary of State has been commendable in the extreme for his willingness to look afresh at issues, but the social fund is one of the longstanding bits of the system that nobody dares poke around at, for fear of what they might find. Should the right hon. Gentleman have the opportunity to implement his agenda in future years, I hope he will have the social fund on his "to do" list.
The hon. Member for Havant mentioned take-up. I think I have asked the Department—I can never remember whether I actually tabled these questions or whether I just meant to—to place in the Library the analysis that underlies the take-up numbers for pension
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credit that Ministers keep quoting. The Government quote the bits that sound rather good, but do not publish the whole thing. The flip side of an 80 per cent. take-up rate for the guarantee credit and a 65 to 70 per cent. rate for the whole thing must be a take-up rate for the savings credit of 50-something percent., I imagine. I fear that I cannot remember what the Minister may have said about this issue, but will he confirm that the Department will place the whole analysis in the Library, and not just give us bits that suit the Government's argument? In the spirit of openness—he has been good in dealing with my freedom of information requests—I hope that the Government will place those details in the Library.
Tax credits were mentioned. The Secretary of State will be well aware that the only families in this country who do not get tax credits are poor families. The intention is to move children on income support over to the tax credits system. That system has now been running for two years, however, and we still do not know—we did not hear it today—why children on income support are getting the current rates of benefits and not moving over to the tax credits system, so that when the parents move into work, there is no disruption or change to the structure of their financial support. Is the tax credits system still such a shambles that we dare not risk including poor families? Is that really the state of play that we have reached? Why are children in poor families not yet on tax credits and when will they be?
The financial assistance scheme has also been mentioned. The Minister for Pensions responded to a debate only this morning about the APW pensions scheme, and he confirmed that people who work for solvent employers will be excluded from the financial assistance scheme. He said that the door was still open, but gave no indication of an intention to include the workers with solvent employers. I asked him a question in that debate: where there is a parent company, can the regulator go back to the employer and chase them for the underpaid money? Although he finished his speech four minutes before he had to do so, because he had run out of things to say, he did not answer that question. It is not very often that we get two goes in one day at trying to get a question answered. Can the regulator go back to the parent company of a firm such as APW and say, "You've got to fill the gap to make up these pensions"? If the regulator cannot do that, the workers will have no redress bar deemed buy-back. Clearly, that is not fair in relative terms with regard to other people covered by the financial assistance scheme.
On the citizens pension, I welcome the fact that I keep reading in the Sunday papers about the Government's intention to follow the Liberal Democrats' lead. We have been speaking about the position of women pensioners—I have certainly been doing so, and I know that my colleagues have been—over a long period. I am delighted by the Secretary of State's view that plugging the gaps in the contribution system is not the answer, because there are so many gaps and such an approach would make things even more complicated. The end result of plugging all the gaps is the number that one first thought of, or in other words, paying the full pension in the first place.
The hon. Member for Havant rightly pointed out that there are both cheap and expensive ways of dealing with the matter. As a transitional arrangement, we have
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proposed that the full rate would apply to a single person and that a 160 per cent. rate would effectively apply to a couple. We have also proposed that where two members of a couple would already have more than 160 per cent. between them, there would need to be a transitional protection to ensure that there are no cash losers. We have costed that into our policy costings.
On the earnings link, it was interesting to hear the Secretary of State confirm that the pension credit will be linked to earnings to 2008. I presume that that is the public expenditure planning horizon, but it is not the end of the Parliament. Will the Minister confirm whether he intends to link the pension credit to earnings throughout the next Parliament or whether the guarantee applies only for the first couple of years of that Parliament, after which there might be a change in policy?
One of the things that strikes me most about the position of pensioners is that, while the Government boast that 80 per cent. of those entitled to the guarantee credit are taking it up—that was the figure that was used—that means that 20 per cent. are not doing so. Who are those people? They are the poorest pensioners in the land, by definition. When the Government managed to get 80 per cent. of the poorest pensioners in the land to claim their means-tested benefits, they issued a triumphant press release. I think that that is a cause for shame.
If 20 per cent. of the poorest pensioners in the land, who are all drawing state pensions and could be lifted out of poverty in a guaranteed way by decent payments, are simply not claiming the complex means-tested benefits, those people are living in poverty. I strongly suspect—I wonder whether the Department has commissioned any research on this matter—that they may be a strong link between those people and the excess winter deaths that we shamefully see every winter in this country. The numbers fluctuate, but the very fact that excess winter deaths occur at all is a source of shame at the start of this new century. I strongly suspect that a link exists between the very poor, very elderly and very vulnerable pensioners who fail to claim those means-tested benefits and those who die from the cold in the winter.
The Minister for Pensions (Malcolm Wicks): Earlier in my career, I researched hypothermia, and there is nothing about which I feel more strongly. Will the hon. Gentleman accept that many over-80s get a £300 winter fuel payment under this Labour Government?
Mr. Webb: Indeed. The winter fuel payment is £6 a week, so elderly people who have a full basic pension and who fail to take up the pension credit are missing out on £25 a week, which means that the gap is £19. The Minister looks puzzled: the basic state pension is about £80 a week this year; the means-tested benefit is £105; and the gap is £25. If elderly people do not take up the pension credit, they miss out on £25, but the Minister has just told me that that is okay because they get £6.
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