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Malcolm Wicks: I did not say that.

Mr. Webb: The Minister did not say that that is "okay", but he asked me to confirm that those elderly people get £6. That is true, but they miss out on £25, so
 
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there is no cause for self-congratulation. That money would have been better spent in the first instance on the basic state pension, particularly for those people.

Mr. Weir: Will the hon. Gentleman accept that the problem is growing, because fuel prices are now increasing in many areas? A recent parliamentary answer to my question about fuel poverty stated that the number of households in fuel poverty is now rising because of increased energy prices. Many people in fuel poverty are pensioners who do not claim their pension credit.

Mr. Webb: The hon. Gentleman has made an important point, because fuel bills matter to older people. Many hon. Members will have seen their gas and electricity bills rising substantially.

Alan Johnson: Is it Liberal Democrat policy to get rid of the £300 winter fuel allowance?

Mr. Webb: No. We would have preferred to introduce a better state pension, but because the Government have decided to make those payments, we have no plans to get rid of them. A simpler system would be a better system, not least because of the scope for misrepresentation. As the hon. Member for Havant knows, we have no plans to touch winter fuel payments.

The hon. Member for Angus (Mr. Weir) raised the substantive issue of fuel poverty, so it is shame that we have moved on to, "Can we get a good quote for our next leaflet?" Fuel poverty is not the primary responsibility of the Department for Work and Pensions, which is a source of concern. Given the issues about the adequacy of benefits for older people, it would be better if the Department were strongly involved.

This is the eighth annual debate to which I have responded, and those who study my contributions may spot the odd common theme—I shall certainly keep gnawing away until I get answers. I did not expect to get the chance to press the Minister for Pensions today, but I hope that he will respond to my particular point about workers whose firms are still solvent. The Government always say, "That is tough. The firm should find the money." If the regulator cannot force the firm to find the money, however, is it fair to say to the workers, "That is tough. We cannot do anything"?

3.58 pm

Sir Archy Kirkwood (Roxburgh and Berwickshire) (LD): It is a great pleasure to follow my hon. Friend the Member for Northavon (Mr. Webb), because this is my first chance to do so. He has pinched a lot of what I want to say, but that is not a great surprise.

These debates are important. Like my hon. Friend the Member for Northavon, I remember the good old days, when the Chamber used to be packed and when hon. Members vigorously engaged with the arguments. The process of social security is so ineffably complicated that it drives hon. Members out of the debate. They may attend to make constituency points because they have leaflets to write, which we all understand, but that leaves the debate at a level that does not do justice to the
 
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complexity, importance and development of the subject. This is my 23rd uprating debate—I may have missed one, so it might be my 22nd.

I know that the Secretary of State has got simplification in his sights because he said so at his last helpful appearance before the Select Committee on Work and Pensions. He gave us some comfort by saying that the Department is considering the matter, which is an easy but fundamental point to make.

I have considered some of the information and communications technology processes that the Government and the Department have in prospect as part of the Gershon review, which I support in principle. The Gershon report is not all about job cuts; it also considers the more efficient use of technology to deliver public services. If we do not fundamentally simplify the current panoply of benefits and start from first principles, we cannot harness the power of computer technology to develop more efficient public services. The pensions transformation programme is a good example of that because it has the potential to improve services, and I hope that it will. However, a system that was more easily computerised could generate savings, which could be put into improving benefits. That would be beneficial to everyone.

Simplification is therefore necessary not simply for its own sake but to make anything of the potential of future IT provision. I hope that the Secretary of State will keep that in mind in his five-year plan and start considering annually the simplifications he can make in the uprating statement.

I acknowledge that a huge amount has been done. My hon. Friend the Member for Northavon rightly said that the campaigns against child poverty and pensioner poverty clearly show results. I accept that they have not all appeared in the statistics yet because there is a time lag, but much has been done, which is welcome. However, parts of the system cause concern. My hon. Friend mentioned working age adults without dependant children. They have been left behind and are in danger of being stigmatised in the provision of benefits.

According to my arithmetic, jobseeker's allowance has increased by only £7.75 a week since 1997. The increase for adults on income support and JSA is only 55p a week. I have participated in such debates for 22 years and that is the smallest rise that I have ever known for claimants in that category. If I am right, we need to tackle the matter urgently.

Broad inequality must also be addressed. The work of John Hills and his unit at the London School of Economics shows that, although poverty has been effectively and rightly targeted, we need to deal with the inequality that is beginning to emerge. It happens because people in the upper deciles of income storm ahead. People may say, "That's fine. So they should. Good luck to them." However, it creates tensions in the system because people see others getting access to life chances that they do not have. I believe that frustration about that can drive them to all sorts of untoward activity, including criminality and the informal economy. In some cases, it can lead to mental illness. Some figures suggest that the inequalities for some
 
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categories of claimants are getting worse. When the Secretary of State examines the uprating figures, year on year, he should consider the big picture of worsening inequality. He needs to think carefully about the way in which he can deal with that in future statements.

My hon. Friend the Member for Northavon asked for the basis on which the figures were presented. I have discussed the matter with Pensions Ministers over many years and in various circumstances. Many of our sister European nations effectively use modest but adequate budget standards to consider what is needed to provide a sensible income.

The London School of Hygiene and Tropical Medicine recently produced a report that found that adults needed a minimum of £91 a week on which to live. That is almost twice the level of income support available to the family cited. That is the measure of the adequacy, or inadequacy, of the current level of benefits—welcome though the increases may be. I am not saying that we should immediately move to using modest but adequate budget standards automatically. It would be difficult, and impossibly expensive, to do that all at once, but we should make more use of minimum income standard methods of determining what is necessary for a family budget. We have looked carefully at the benefits that the Government are using to measure child poverty in regard to the targets for the period from 2010 to 2020, and they are better than they might have been. However, a proper assessed budgetary standard for child income would have been a more useful tool for measuring the Government's progress.

The Government have a story to tell on incapacity benefit and on pathways to work, and I support all that, but it is disappointing that it will take until 2008 to get that system rolled out across the whole of the United   Kingdom. The work done by the New Policy Institute in December 2004, which was funded by the Joseph Rowntree Foundation, clearly showed that economically active people who want paid work but who are not officially unemployed are a big client group, and present a big problem. It is a matter of concern that we are not going to have a UK-wide system to deal with that until 2008.

Although the policy of having an active labour market is right, and has been successfully operated over the past few years, it ignores the fact that the quality of jobs at the lower end of the employment market cannot provide the necessary long-term stability and adequate life chances for families on lower incomes. The Government should look carefully at the statistics that show that people who go into low-paid jobs often rotate through them in a relatively short time in a way that does not help them much. They still suffer poverty, and they are still in difficulties. It is therefore not safe to assume that the problem is fixed simply by getting people into work. Given the statistics on this large section of the community, it is demonstrably not.

I concur entirely with the point made by the hon. Member for Havant (Mr. Willetts) about the lost generation of 1 million young adults. The number of people with poor or no educational qualifications is an issue. I accept that it is not technically a benefit matter, but it plays into the new deal and some of the other issues that we are looking at this afternoon.
 
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I am worried that some of the wider indicators show that, although the benefit system has improved, it is still not adequate for the purpose. The problem of low birth weights, which the right hon. Member for Birkenhead (Mr. Field) used to bang on about in earlier times, is getting worse. It is a matter of real concern that the problem is being exacerbated in families on low incomes, and we are storing up problems for the future in that regard.

The number of households in temporary homelessness is a huge issue. We really need to look at the structure of the benefits involved, including some of those dealt with in the uprating statement. In fact, it is time that we started looking at the Rossi index again. People's housing benefit is being restricted for a variety of reasons, including rent restrictions, which we all know about. The costs of housing have increased substantially, and increasing means-tested benefits by 1 per cent. using the Rossi formula might have been a safe thing to do five or 10 years ago, but we need to reconsider whether anything better can be done to protect people who have real problems struggling to meet their housing costs. That need is reinforced by the fact that there is only a 50 per cent. take-up of council tax benefit.

There is evidence to show that low income, bad diet, low birth weight, homelessness and temporary housing all lead to an exacerbation of mental illness. That is not a direct social security responsibility, but there is evidence that things are getting worse, which we cannot ignore.

Some capital limits in the order have been in place since time immemorial—indeed, some of them came in with the 1986 legislation, which I remember—but it makes no sense to leave capital limits to languish to such an extent. They need to be re-evaluated and uprated in some way, even if only occasionally and not annually.

A couple of Members raised the issue of tax credits and I have three questions to ask because I am very worried. The hon. Member for Havant alluded to the problems relating to the recovery of overpaid tax credits. This is a serious matter that impacts on the benefits uprating order, because some people on low incomes are not getting their full entitlement as overpayments are being clawed back at an unconscionable rate. I wonder whether the Department knows how many income support claimants are on a reduced income due to recovery of overpaid tax credits. That would be an important and interesting figure to know.

I also do not believe that ordinary people on the high streets of the towns of Great Britain know that the Inland Revenue has the discretion to write off overpayments. I do not think anybody tells them that.

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