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House of Commons

Monday 18 July 2005

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Incapacity Benefit

1. Ian Lucas (Wrexham) (Lab): If he will take action to identify recipients of incapacity benefit who will be permanently unable to work. [12300]

The Secretary of State for Work and Pensions (Mr. David Blunkett): As part of the emerging conclusions of the review of welfare reform, I shall recognise in the autumn that there is a group of individuals who, permanently or temporarily, are so severely ill or disabled that it is impossible at that time for them to take up work, and that they deserve all the support that we can give them. The reform agenda will, however, ensure that we do not write anyone off, and that we write them in if they are prepared and able to take up the opportunities that we as a society have an obligation to provide for them.

Ian Lucas: There are indeed individuals who are not fit to work and never will be. At present, some of them become distressed by receiving application forms which are unnecessary and which, in an improved system, would not be delivered to them. I urge my right hon. Friend to continue with the course that he is following to assist those who are capable of work to move into work, but to ensure that those who are not capable do not have to fill in the forms that sometimes cause them so much difficulty.

Mr. Blunkett: I accept my hon. Friend's point entirely. There is a category of exemption and it is clear that those, for instance, who have terminal illness should be treated quite differently from those who, temporarily or on a longer-term basis, might be able to return to work with the right sort of help and encouragement. The system should reflect that difference, and our welfare reform paper in the autumn will seek to reinforce that.

Mr. David Heath (Somerton and Frome) (LD): Will the right hon. Gentleman consider the position of those who have long-term mental illness that is often episodic? The present benefits system does not cope with them
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because it does not recognise the times when people are available for work and the times when they clearly are not available for work and are suffering from the illness, which is almost certainly long-term and may be permanent.

Mr. Blunkett: The welfare system must reflect the fact that increasingly, people may be able to undertake work for a period and then find themselves on benefits for a time. They need to be able to return to benefits without any disadvantage and in the easiest possible way, not only for themselves but to assure employers that there will not be a major disadvantage to them. We are considering how we could work more effectively with employers to keep those people on the books while not disadvantaging the employer. The linking rules, which are improved substantially from next year, will make it possible for people to return to their benefit after a substantial period in work. There is much more to be done on this, and given that 40 per cent. of those on incapacity benefit have at least some form of mental health problem, it is an increasing challenge.

Andrew Mackinlay (Thurrock) (Lab): I am grateful for what the Minister has said and the sensitivity with which he said it. Each of us has constituents with such deep, lasting psychiatric problems that they are unemployable. They recognise that, as do those who administer the system. It is an embarrassment to employers when they are sent along. It cannot be rocket science that a common-sense rule should prevail. I hope the Minister will be able to imbue the system and regulations with that and hand it down the pyramid. Common sense would help everyone, but at present it is not and cannot be applied.

Mr. Blunkett: The personal capability assessment ought to be able to distinguish between those with severe mental health problems and those with temporary depression, who constitute quite a large proportion of the 38 per cent. who are on IB, for whom positive help, including work, would be a way out of that challenge. Including those who are entitled to IB through the personal capability assessment, we ought to be able to distinguish between people who will be supported long-term and those who will continue to get help, even though they are receiving incapacity benefit.

Mr. David Heathcoat-Amory (Wells) (Con): Last week the Government discovered that they had overlooked another 130,000 incapacity benefit claimants, bringing the total to 2.8 million, so reform is urgent. Will the Secretary of State confirm that on 12 May the Prime Minister promised on his behalf at his weekly press conference that

As we have only three days to go, will the Secretary of State tell us on which day this week the Green Paper will be published, or is that yet another Prime Ministerial promise made within days of a general election, to be broken only a few weeks later?

Mr. Blunkett: First, the previous Government set in train the sampling system for incapacity benefit recipients. This is the first occasion on which I have been
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criticised at the Dispatch Box for openness, transparency and clarity in making the figures more realistic and more honest. Although the figures have been readjusted to conform with reality rather than      sampling, the downwards trend and the 29,000 reduction in recipients remain the same.

Secondly, I will not publish the Green Paper today, tomorrow or on Wednesday. We have concluded that we must properly assess the situation in 10 weeks— [Interruption.] Well, I do not imagine for a moment that the Opposition, given their problems, are keen to address the issue now rather than at length in the autumn, when they might have a leader with whom we can deal.

Women's Pensions

2. Tony Lloyd (Manchester, Central) (Lab): If he will make a statement on his recent announcement of a consultation on making the pension system work better for women. [12302]

The Secretary of State for Work and Pensions (Mr. David Blunkett): Last week, I announced that we will produce a background paper and hold a forum on the long-neglected group of individuals known as women before the publication by Adair Turner of the Pensions Commission report. Women have lost out enormously over the years, first, because of social and economic change and, secondly, because of the change in both family and work patterns.

Tony Lloyd: May I congratulate my right hon. Friend on his positive tone on women and pensions? Working patterns are becoming more complicated in both the world of work and, indeed, the world of non-work, and both men and women are taking time off from the workplace to retrain, to undertake caring duties or for other reasons—for example, part-time working has trebled among men in the past 10 years. As the Equal Opportunities Commission has argued, if we get it right for women, we get it right for everyone.

Mr. Blunkett: That is a lovely phrase. Although it does not hold true for everything in life, it is attractive when used in relation to retirement income. Given that we had to intervene to overcome poverty in retirement, and that twice as many women have benefited from the pension credit as men, it is self-evident that the historic failure to recognise caring duties has disadvantaged women enormously. Only 17 per cent. of women currently retire with full entitlement compared with 80 per cent. of men, so the challenge is great.

Tony Baldry (Banbury) (Con): Why do the Government not reduce the lower earnings level to about £60 a week, which would enable more than 500,000 women to enter the state retirement pension system? The national insurance system is not an insurance system—it is a covenant whereby today's taxpayers undertake to pay for today's pensioners on the understanding that a future generation will pay for our pensions. It is harsh that the system excludes so many women because they do not earn enough.
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Mr. Blunkett: That is a good point, and it was the reason that my predecessor and the Chancellor agreed to lift the national insurance threshold to £94 a week and to reduce the eligible earnings limit to £82 a week, which entitled 500,000 women. We are making progress, but much remains to be done, and I am glad that at least one Opposition Member supports the trend of our policy.

Mr. Jim McGovern (Dundee, West) (Lab): Many women lose out on pension equality not only because they take time out to care for children early in life, but because they take time out later in life to become carers. Will the Secretary of State take steps to address those issues on behalf of women?

Mr. Blunkett: Yes, I will. The support that the Labour Government introduced for those who are caring can be extended. One of the key issues that we will want to address in the autumn is how people can be provided with accreditation during the period for which they are involved in caring, which the current home protection does not do.

Mr. David Laws (Yeovil) (LD): On making the pension system work better for women, does the Secretary of State agree that this is not only about reforming the basic pension but about ensuring that there is good provision in areas such as occupational pensions? The ombudsman is considering the issue and the report is expected in a couple of months. If the ombudsman finds maladministration on the part of the Government, will compensation be paid?

Mr. Blunkett: I think it would be wise for me to wait until the ombudsman reports before making commitments to Parliament that might lead me down avenues that I would regret, especially since, as has been pointed out, we have only three days until the recess. I can say, however, that in the past few years enormous steps have been taken to redress some of the issues that might otherwise have been highlighted in the report—for instance, the position of part-time workers, the majority of whom happen to be women, who from five years ago had their entitlement adjusted. In fact, 6 million workers were put on equal terms in relation to occupational pension rights in a way that had not occurred before. For a whole tranche of the people whom we represent, there have been massive improvements in entitlement and in reality.

Vera Baird (Redcar) (Lab): I congratulate my right hon. Friend on the speed with which he grasped the gravity of the situation facing women as regards pensions. He really is to be congratulated on doing that so well.

May I return to the lower earnings limit and contributions for the basic state pension? The lower earnings limit may well be too high—about 1.4 million women are priced out of getting contributions to their pensions—but another problem with it is that someone with two part-time jobs cannot aggregate the earnings. Even if they are earning well over the lower earnings limit and working for 40 hours a week, without the ability to aggregate they will still get no contribution to their pension. Will my right hon. Friend look at that as a matter of urgency, too?
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Mr. Blunkett: Yes; my hon. Friend the Minister for Pensions indicated in a recent debate that we are prepared to consider this complex area. However, the Chancellor has managed to reflect the principle in the tax credits system, whereby two people can credit their hours together in order to reach the eligible 30 hours for the upper limit. It is therefore not beyond the wit of woman or man to find a system that might address the inequality and inequity that my hon. Friend outlines.

Sir Malcolm Rifkind (Kensington and Chelsea) (Con): Is the Secretary of State aware that while we welcome his call for a national consensus on women's pensions and pensions generally, we have noted his charming admission that such a consensus does not yet exist within the Cabinet? Will he confirm that the Chancellor of the Exchequer is the problem, and will he share with us what exactly they disagree about?

Mr. Blunkett: The right hon. Gentleman has a sense of humour, which is very welcome. The Chancellor of the Exchequer has, through the pension credit, lifted 2.7 million people out of poverty in retirement.

Andrew Mackinlay (Thurrock) (Lab): To his credit.

Mr. Blunkett: As my hon. Friend says, it is to his credit that he has done so.

We are therefore at the starting point of accepting the challenge of the nation in ensuring that people are not in penury in retirement, and then moving forward to incentivise people and to ensure that they think and plan for the future. The Government will play their role alongside employers and individuals. This is not about divides between particular individuals or politicians; it is genuinely a challenge for the nation, and any party that seeks to duck it and to make party political capital out of it will be dealt with severely by the people whom we serve.

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