Mr. Frank Field (Birkenhead) (Lab): Does the Minister accept the Opposition's line that large numbers of pensioners are eligible for but not claiming the additional help with pension credit? Does he share the experience that I have? I find almost no one in Birkenhead who for any length of time is eligible and not claiming pension credit. Has not that benefit proved itself to be extremely effective in channelling help to our poorest pensioners? Is not the problem one of long-term sustainability rather than non-take-up? One cannot run a free society by budgeting for 75 per cent. of pensioners being on means tests, and one is unlikely to get elected if it costs 13p on the standard rate of tax to deliver that benefit. Does not that make his comment about consulting about the Turner commission report that much more important? While every hon. Member welcomes the announcement that the Government are talking to people outside the House, might they talk to people inside the House and might he ask the normal channels for a debate on the Adjournment, so that hon. Members on both sides of the House can give their views on that important report?
My right hon. Friend's characterisation of the position regarding the pension credit is much fairer than that of the hon. Member for Eastbourne (Mr. Waterson). It is true that some people who are entitled to pension credit are not yet receiving it, but it looks as though the total number eligible is rather less
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than we first thought, which has doubtless had an effect. Of course, some of those entitled to but not receiving pension credit are entitled to rather small amounts. The evidence is that the overwhelming majority of those entitled to substantial amounts are receiving it, which is why it is having such a big impact.
I very much agree with my right hon. Friend that the pension credit has been an extremely effective intervention in addressing the problem of long-term pensioner poverty, effectively making abject poverty a thing of the past. I would welcome a debate along the lines he suggests, as would my right hon. Friend the Secretary of State for Work and Pensions. Such discussions are doubtless under way as we speak.
Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): I thank the Minister for his courtesy in giving us advance sight of the statement, many aspects of which Liberal Democrats welcome. In the light of recent leaks to the press, we particularly welcome the news that the pension credit will continue to be uprated in line with earnings. Does he agree that, whatever the Chancellor may have said in advance of Lord Turner's report, it would be unthinkable for a Labour Government to break the link between the pension credit and earnings? Will he confirm that continued uprating of the credit in line with earnings over the long term is shown by the Treasury to be a reasonable assumption in the table on page 39 of the long-term public finance report published yesterday? Does he therefore agree that Lord Turner's proposals represent an affordable alternative to the progressive expansion of means-testing? As the right hon. Member for Birkenhead (Mr. Field) said a few moments ago, the choice is therefore between a sustainable scheme and one that is unsustainable in the long term. We also welcome the uprating of many other benefits, and I congratulate the Minister on continuing the freezing of non-dependent deductions.
The Minister says that 3.3 million pensioners are in receipt of the pension credit. How many are entitled to it but are not receiving it? The state pension will increase by £2.20 a week, but how much of that will be consumed by council tax rises in the coming year? Does this not highlight the need for a decent state pension for everybody as a guarantee against poverty? We should not be content to celebrate the fact that pensioners are now merely no more likely to be poor than anyone else in society.
I welcome the Minister's decision to look at an industry alternative to the national pension savings scheme suggested by Lord Turner, but does he agree that, to be viable, the cost of such a private sector scheme must be at, or under, the level set by Lord Turner for the state-backed scheme? Although it is important to ensure that benefits are uprated fairly, is it not also important to ensure that they are delivered effectively?
Does the Minister agree that they have indeed been remarkablefor the range of serious problems that claimants now face in getting their money, whether
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uprated or not? It is now taking an average of 13.5 days to clear a jobseeker's allowance claim, compared with the target of 12 days, and nine centres have returned to manual processing. Will the Minister take steps to ensure that claimants can get their benefit by the time today's uprating comes into effect?
The Minister will also be aware that a very cold winter is forecast, so it is disappointing that no provision has been made for extending the winter fuel payment to severely disabled people, as we proposed in our manifesto. Will he re-examine this proposal, which recognises the additional costs and problems for severely disabled people arising from cold winter weather?
We welcome confirmation that a statement on welfare reform will be made next January, the encouraging signs coming from the pathways to work pilots, and the proposed increase in back-to-work support for lone parents. However, the Minister said nothing about the welfare reform desperately sought by families throughout the land: reform of the failing and discredited Child Support Agency. Will he confirm that a statement will be made on this issue by the end of the year, as previously promised by the Secretary of State for Work and Pensions?
The inclusion of the words "welfare reform" in the title of this statement may have caused a frisson of excitement in some parts of the House that eight years of waiting for serious proposals on welfare reform were perhaps about to be brought to an end this afternoon. I note from the Chancellor's statement yesterday that the money raised from the windfall tax to pay for welfare to work has now all been spent. When welfare reform proposals are made in January, will the Minister ensure that, despite the tightening fiscal position, they are properly funded, so that the 1 million or more incapacity benefit recipients who would like to work again are not once more disappointed by this Government?
Mr. Timms: I am grateful to the hon. Member for welcoming the freezing of non-dependent deductions, which his predecessors did consistently over the past few years. It is an area on which we have agreed. The earnings link for pension credit has proved an effective tool for reducing pensioner poverty. As he knows, the commitment to maintain that uprating lasts until 2008. Beyond that, the Chancellor will make announcements in due course, although the hon. Gentleman is right that the illustrative figures in the pre-Budget report reflect the uprating continuing. Whether that will happen in practice is a matter for the Chancellor to announce.
I draw the hon. Gentleman's attentionthe hon. Member for Eastbourne (Mr. Waterson) may also be interested, given what he said earlierto what the Turner commission report said about means-testing. Page 188 states:
That was the concern in the report, rather than the immediate elimination of or drastic reduction in means-testing. It is important that we recognise that thrust in the report. It is important that proposals for pension
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reform should be affordable, and that is one of the tests set by my right hon. Friend the Secretary of State in welcoming the Turner commission report last week.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) mentioned the impact of the council tax on pensioners, and it is important that we make further progress in increasing the take-up of council tax benefit. It is important that an alternative, industry-led, low-cost personal account pension scheme should be comparable in terms of cost and in other ways to the national pension saving scheme suggested in the Turner report, and that is the basis on which we will evaluate the proposals. There are two prospects, and I have asked the industry to produce its proposals by February, so there may be others. We will pragmatically evaluate the alternatives, looking at the cost and at other issues, including the impact on business, which will be important.
We are improving the bedding down of the new systems for jobseeker's allowance and we have seen much progress. I can confirm that my right hon. Friend the Secretary of State will make a statement on the Child Support Agency shortlyeither later this month or early in the new year.
The hon. Gentleman looks forward to the Green Paper on the new deal, which is due in January. I hope that his party will support the increasing and active role that we envisage for the state in helping people back into work. His party has always pledged to abolish the new deal and remove the extra help that has been so effective. I hope that the tone of his remarks reflects some new thinking in his party and that we will be able to agree on the tremendous attractions of a more active role for the state in helping people back into work.