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Daniel Kawczynski (Shrewsbury and Atcham) (Con): Will the hon. Gentleman give way?

Danny Alexander: I will give way to the hon. Gentleman, with whom I expected to be in the Falkland Islands today.

Daniel Kawczynski: I thank the hon. Gentleman. He is right: we were meant to be together in the Falkland Islands today.

Many young people in Shrewsbury tell me that they are not taking out pensions because of the huge tax increases levied on them by the Government. Does the hon. Gentleman agree that it is worrying that the younger generation are not arranging private pensions, as he said they should, because they simply cannot afford to?

Danny Alexander: I believe that one of the main reasons why many young people are not making their own pension provision is the spread of means-testing, which in a sense devalues that additional saving.

Mr. Hunt: Does the hon. Gentleman agree that although money is an important element of the
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eradication of poverty—an aim that is shared throughout the House—we must also consider the need for a simpler system that does not remove incentives to work? Does he also agree that while the Government may have increased funding for poverty eradication programmes, they have not succeeded in introducing policies that would make the system simple enough to understand, while retaining incentives for people to return to work if they are able to do so?

Danny Alexander: I intend to say something later about the disincentives to work that will continue if the orders are passed.

People outside may look forward to receiving uprated benefits or pensions. How those benefits are delivered, and whether people will be able to take advantage of them, is an issue of fundamental importance. The Minister will know that some 4.3 million people receive the benefits in pensions that we are discussing via a Post Office card account. He will know, because we discussed it in Westminster Hall yesterday—

Madam Deputy Speaker: Order. I hope that the hon. Gentleman is not going to enter into a debate on the Post Office card account, given that the order concerns the uprating of social security benefits.

Danny Alexander: I do not intend to enter into a great debate on the Post Office card account, and I am grateful for your guidance, Madam Deputy Speaker.

Mr. Alan Reid (Argyll and Bute) (LD): If pensioners living in remote areas find that because of Government policy their pensions increase only in line with average prices, and if because of Government policy their local post offices have to close and they face a longer journey to collect their pensions, they will face greater financial burdens as a result of Government policy. That is not reflected in the pension increase that the Government are giving them. If the Government adopt a policy of wholesale post office closures, surely they should give pensioners in remote rural areas larger increases because of the greater distances that they must travel.

Danny Alexander: My hon. Friend makes an extremely good point. If, as a result of the Government's policy, the means of access to benefits and pensions—local post offices in rural areas or deprived urban areas—is removed, the uprating should include an amount that makes it possible for people to gain access to those benefits and pensions. Otherwise, while there may be a superficial uprating, increased costs will mean an overall downrating for those people. I hope that the Minister will address that issue, and particularly the question of when people living in such areas might lose the ability to access benefits in the manner of their choosing. I hope that the Government will provide time in the near future for a full debate on this issue, because Ministers have so far been unable to address it on the Floor of the House.

I come to the future of disability benefits, with which the orders before us also deal. We Liberal Democrats will make a formal submission on this subject in response to the Government's Green Paper on welfare reform, but there are a few points that are worth making in the context of today's debate. Although we endorse,
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for example, the various forms of support being offered to people on incapacity benefit to get them back into work and, therefore, off the benefit currently provided in the pathways to work pilot areas, if such support is to be extended throughout the country to all people in receipt of incapacity benefit it needs to be properly funded. The Government estimate that the pathways to work project costs some £400 per claimant. Based on the latest annual figures for people commencing incapacity benefit claims, it would take some £220 million a year to fund a national roll-out at the same level. Yet the Government are offering only £360 million over two years. If the resources are spread too thinly, we will not see results and we will let down all those claimants who want to find work. That is especially true at a time of rising unemployment.

Conditionality of benefits has been a major feature of the debate on the future of benefits such as jobseeker's allowance and incapacity benefit. That debate continues.

Mr. Ruffley: This seems something of a groundhog day, in that the hon. Gentleman is repeating the speech that I attempted to make a few minutes ago. Does he share my concern about the funding of proposals aimed at getting incapacity benefit recipients back into work?

Danny Alexander: I am grateful, I think, for that intervention. If the hon. Gentleman had been paying closer attention a couple of minutes ago, he would have heard me make exactly that point. Perhaps he was too busy re-reading his own speech to listen to mine.

On benefit sanctions and conditionality, I am concerned that the Government have so far been unwilling to make public detailed clear evidence of the success of such sanctions in encouraging people off benefit and back into work. I have asked the Minister on a number of occasions to provide the body of evidence to which he referred in support of the Government's claim, but so far he has been unable to do so. According to the Green Paper, they

That is a great disappointment, because the benefits paid to disabled people that are covered by this order—disability living allowance, incapacity benefit and so on—need to be reviewed in the round if we are to establish an effective overall structure that targets resources to need.

The Government's own research—the Department for Work and Pensions working paper No. 21—suggests that the disability living allowance as currently structured is not sufficient to meet the extra costs faced by people with disabilities. What are the Government doing about that issue? They have missed an important opportunity to consult on it. Indeed, they dodged giving a straight answer to a written question on it just a few days ago. Will the Minister explain clearly how the Government intend to respond to this finding, rather than following the example of the parliamentary written answer that I received and simply restating the research's conclusions?

Mr. Hunt: I am grateful to the hon. Gentleman, who is being very generous in giving way. Is he aware of
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research by the Joseph Rowntree Foundation, which quantifies the cost of being disabled at an additional £200 per week net of any extra benefits received, or £118 per week for someone in employment? Is he concerned, as many disability charities are, that the structure of the Government's proposed incapacity benefit reforms seems to assume that some people are completely incapable of work? For many people with severe learning disabilities, working even one or two days a week could well be the way out of dependency and of regaining some self-respect.

Danny Alexander: I am grateful for that intervention and I am aware of the excellent research to which the hon. Gentleman refers. I will turn shortly to the question of how the uprating of benefits affects those who are able to work only a few hours a week.

Some important issues need to be considered. For example, the current disability living allowance does not provide support for the communication needs that many disabled people have. Some 4,000 disabled schoolchildren with such needs have been fortunate enough to receive support from the communication aids project, which is funded by the Department for Education and Skills. Unfortunately, such funding ends in March and the Department has no plans to renew it. A review of disability living allowance could—indeed, should—consider whether support for communication needs should be given, in addition to support for care and mobility.

In his opening remarks, the Minister pointed out that disability living allowance applies whether one is in work or out of work, and it is true that that is one of that benefit's potential strengths. However, in the experience of many organisations that help benefit recipients back into work, a return to work can often quickly trigger a new review of entitlement to disability living allowance. That issue needs to be addressed.

The uprating of benefits inevitably increases the sums lost to the Exchequer through error and fraud in the benefit system. Although some progress has been made in tackling fraud, it has been insufficient to prevent the Department being criticised strongly by the National Audit Office and the Public Accounts Committee. The latter says that the Department has

in this regard. On errors, the picture is even more unclear. In fact, it seems likely that the number of benefit payment errors is increasing. They now account for more losses than does fraud: some £1.5 billion, according to the PAC's estimate. In a recent debate, the Government pointed out that the figure is actually £1.7 billion. Perhaps the Minister will give the House the Government's latest estimate of the amount that will be lost through errors in the benefit system as a result of the upratings before us today.

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