Jenny
Willott: The hon. Gentleman is absolutely correct. If we
consider the group of people affected, they are likely to be vulnerable
and to have chaotic lives. As he says, sending out leaflets will not
assist them in understanding the changes. One of the groups likely to
be caught out are those with mental health problems,
and with communication and language problems. Mental health problems
often cause confusion, resulting in chaotic lives. That category of
people are likely to make late benefit applications, so they could be
disproportionately affected.
Mr.
Waterson: Is the hon. Lady aware that, some months ago,
the Department quietly dropped its ambitions to increase take-up of
pension credit across the board? So, coming on top of that, the
regulations could see the take-up rate decline quite
sharply.
Jenny
Willott: The hon. Gentleman is absolutely correct, and the
level of take-up of both those benefits, at working age and by
pensioners, is worrying.
John
Howell (Henley) (Con): As the hon. Lady has set out, there
are certainly issues around poverty, but does she agree that, as many
of us have experienced in our surgeries, the back claims for pension
credit arise at traumatic occasions in peoples lives, whether
because of disability or savings finally running out, which makes it an
even more poignant matter?
Jenny
Willott: The hon. Gentleman is correct. I wanted to flag
up the issue of homelessness, which is also a traumatic experience, and
it means that people are likely to start trying to claim backdated
benefits for a significant period.
The change to
housing benefit is questionable on the ground that it is paid to meet a
defined liability, not to cover day-to-day costs. Housing benefit is
often paid directly to the landlord, although that is different with
the local housing allowance. That can lead to delay, meaning that the
claimant does not realise that housing benefit has been stopped and
that they need to re-apply. The application itself can also be very
slow.
Landlords
evict tenants if they default on their rent, and the regulations will
only increase the likelihood of that happening. That is certainly the
concern of the voluntary sector. Shelter, which works on these issues,
has said that the changes will inevitably cause homelessness in a
number of cases. The Government should be taking that seriously, rather
than imposing the changes.
Given that
the changes have been in place for one month, I have some examples of
the negative impact that they have had on claimants. There are a lot of
different examples, but I shall flag up two: one is of a person of
working age and the other is of a pensioner. A citizens advice bureau
in the midlands had a single mother of three who was facing eviction
come to them. She was being evicted by her social landlord for rent
arrears of over £5,500. She put in a claim for housing benefit
in April and at the same time requested backdated payment. She had good
cause because she had recently suffered a number of personal
difficulties: her son had been in and out of hospital and there was a
recent death in the family. Under the old rules for housing benefit
backdating, she would have been able to claim fully. However, because
of the changes, she was not able to claim as far back as she needed to
in order to cover the arrears. As a result, the application to suspend
the warrant of eviction is likely to be dismissed and she is in danger
of losing her home, so that she and her three children will be
homeless.
The other
example also comes from a citizens advice bureau in the midlands, which
saw a client in his 60s who had been working in a voluntary capacity
since he stopped caring for his mother seven years ago. He did not
think that he was eligible for any benefits because he still had some
inheritance left and he had been surviving on £50 a week for the
past two years. He found in May that he was eligible for pension credit
and he subsequently claimed. When he went to the citizens advice bureau
for assistance in August, he was advised that he could also claim
council tax benefit. He has been awarded pension credit backdated to 28
May, of £124 a week, and full council tax benefit of £20
a week, backdated from September 2007.
In total,
under the old rules that client has received £7,490. Under the
new rules he would have received £1,700 only, which is clearly a
massive difference. He was falling into arrears with his council tax,
phone and utilities bills, and if he had not received those backdated
payments he would have had no means to resolve his debt problems. The
number of people affected by the changes is already becoming clear and
is something that we are concerned about and that the Government should
be concerned about.
The
regulations raise a significant number of other issues, particularly
around whether they are genuinely a matter of simplification, or
whether they are a cost-cutting measure. I will leave it to other
members of the Committee to raise those issues, as I am sure they wish
to. The Government seem to have sneaked out the regulations during the
recess, showing some disregard for the scrutiny role of this House. It
appears that the regulations are a cost-cutting move and that the
Government do not have a good defence for them and cannot provide the
evidence to back them up. In case the Committee have not guessed
already, I intend to press the matter to a
Division. 9.19
am
Mr.
Waterson: May I say what a pleasure and a privilege it is
to serve under your chairmanship, Mr. Bercow? The title of
the regulations belies their sinister intentThe Social
Security (Miscellaneous Amendments) Regulations. What could
sound more harmless than that? But as the hon. Member for Cardiff,
Central has already explainedI shall certainly be supporting a
lot of her points, as well as making additional onesthe
regulations matter a great deal to a number of people. I share the hon.
Ladys concerns about the way in which the regulations were
sneaked out, and the Governments approach to consultation on
them. It
is also odd that the Committee was rescheduled to 8.55 on a Thursday
morning, when there is not a great deal of other excitement going on in
the House to detain usthe original timing was more mainstream.
Despite that, there is an excellent turnout on the Conservative
Benches, although some Government Members may regret having come at
all.
Sometimes the
Government amaze me. They take actions such as that leading to the 10p
tax rate fiasco, to give a recent example, which seem designed to
disadvantage the most vulnerable people in our society. Such actions
seem to be based not on principlesnot even eccentric or
quixotic onesbut rather on a general desire to save the
Treasury money. I will come on to the apparent savings in the
regulations in a minute, but they do not
seem significant enough to pay for the huge political damage that I
expectand hopethe Government will suffer for putting
the regulations through. I offer the Government only advice in the
friendliest wayif they do not take it, so be
it. It
is interesting that when pension credit was first introduced, the
Treasurys working assumption was that 1.4 million people would
never get round to claiming it. On one level, the Government should be
congratulated, as they exceeded even that targetcurrently, up
to 1.8 million people who are entitled to claim pension
credit do not do so. It is no wonder that an estimated
£5 billion in benefits is unclaimed by pensioners.
The Institute for Fiscal Studies has pointed out that if all that money
was claimed, 500,000 pensioners would be lifted out of poverty at a
stroke. Currently, there are 2.5 million pensioners living
in poverty in this country, which is extraordinary given the promises
made by the Labour party in opposition.
I would like
to deal with the mantra that Lord McKenzie of Luton expressed in the
House of Lords. He asserted that, thanks to the wonders of Government
policy, pensioners are now less likely than other parts of the
population to fall into poverty. The Government tend to select the
measure that suits them when they make those sorts of claims, and the
figure is taken after housing costs have been taken into account.
However, according to the House of Commons Library, if we look at
income measures before housing costs, the equivalent figures are 23 per
cent. for pensioners, and 18 per cent. for the population as whole.
That means that the proportion of pensioners in poverty is greater than
for the rest of the population. Let us hear no more of that boast from
Ministers.
In a logical
world, the aim of all parties would be to increase the take-up of
pension credit and other means-tested benefits, which is clearly a
serious challenge. The Government have rightly spent a great deal of
money and effortleaflets galore, letters, phone services and
the Pension Services excellent efforts to increase the take-up
of the pension creditbut they seem to have hit a ceiling and,
if anything, take-up is going down. That is the challenge in public
policy terms, but what is the Governments response? Their
response is to make it even more difficult for people to claim pension
credit, and when they start to use words such as
simplification, it is time for people to put their
hands on their wallets.
The hon.
Member for Cardiff, Central has already mentioned the explanatory
memorandum, which is a treasure of its kind. It talks about the
overall package of simplification. That is a marvellous
sentence, and I would love to meet the person who drafted it. It goes
on:
Overall,
this package of measures aims to streamline the process of claiming and
reduce the amount of intrusion into customers financial
circumstances once a claim has been
made. Streamline
is probably the right word. A host of pensioners will not get a sniff
of pension credit if they are outside the three-month period.
With a
mind-boggling level of insouciance, the memorandum
continues: Pension
credit is no longer a new benefit, and extensive marketing has taken
place over those years to publicise it and encourage
take-up.
I have already accepted
that. The only niggling problem is that there are still 1.8 million
people who are not claiming the
credit. The
explanatory memorandum then mentions the
impact: A
full impact assessment has not been published for this
instrument. As
the hon. Lady has saidI agree with herthat is
extraordinary. Therefore, we have to extract from other statistics what
impact the measure will
have. Let
me go back to the benefits uprating statement of 5 December in which
the Ministers predecessor announced the changes. Even then, an
element of spin had begun to creep in. When this Prime Minister took
over, we were told that the age of spin was over and that we would get
straight talking and straight dealing from the Government. Now that the
prince of darkness himself is back in the Government, we seem to back
to the usual
stuff. The
Minister said that he wanted the customer to get their state pension
entitlements with the minimum fuss, bureaucracy and form filling. If
customers are out of time, they will have the minimum of fuss, because
they will not get any. As I said on that day, it is a case of robbing
Peter to pay Paul. When I pressed the then MinisterI hope that
I will have more good fortune with this Minister, who comes fresh and
enthusiastic to the jobhe
said: There
will be no actual losers, as we are redistributing the money within the
budget.[Official Report, 5 December 2007; Vol.
468, c.
846.] I cannot
think of a more Orwellian way of putting it. Surely, this Minister must
accept that there will be losers. Perhaps, she will tell us how many
there are likely to be.
A press
release, which was published by the DWP in August, was
headed: Over
60s Dont miss out on extra
cash. I
am not sure what the DWP means by extra cash, because
for quite a few thousand pensioners, there will be no cash. The press
release contains a quote from Gordon Lishman, director-general of Age
Concern: we
would urge any older person struggling to make ends meet to make a
claim now to ensure they dont lose out on cash thats
rightfully
theirs. That
is the only way to describe the effect in the real world of the
regulations. As
if we have not heard every possible spin, I turn to the speech by Lord
McKenzie: The
Government are also keen to foster a greater sense of responsibility
among customers for their financial affairs. An unintended consequence
of lengthy backdating periods is that they can increase the likelihood
that people, particularly in the most vulnerable groups, become
desensitised to their situation and avoid taking action to tackle their
debts.[Official Report, House of Lords, 10
November 2008; Vol. 705, c.
519.] That may
be, but people will have debts galore if the regulations go through. In
an intervention, I mentioned that this is against a background of the
Government having quietly abandoned their targets to increase pension
credit take up across the board. It appears that Ministers have
deliberately diverted resources away from meeting their target to
increase take up.
The
Departments productivity report, which was produced in
February, says
that despite
significant campaigns to encourage take-up of Pension Credit, the
number of customers responding to such campaigns has reduced over time.
The Department continues to look at further ways to identify those who
may be entitled to Pension Credit and encourage them to apply. However,
it would not represent value for money to repeatedly press unwilling
eligible people to take up their entitlement.
In a parliamentary
answer on 27 February, the then benefits Minister effectively said that
they were abandoning the target to increase the take-up of pension
credit. The
hon. Lady rightly touched on the equality impact assessment on the
regulations. One of its clear findings is that older pensioners are
more likely to be affected by the proposed rule change. In 2006-07,
older pensioners were more likely to backdate their claims than younger
pensioners, and they were more likely to do so for the maximum of 12
months. In 2006-07, 110,000 successful pension credit claims were
backdated for more than three months.
Quite
rightly, the hon. Lady referred to the views of the SSAC, and I want to
quote one sentence in its report. The members of the SSAC are not
people normally given to dramatic and colourful statements, but this is
what they
said: We
have concluded that the department has offered neither adequate
evidence to support its case for change nor a convincing proposal for
mitigation of the potential negative impacts of the
change. People
are queuing up to criticise these regulations, which hardly have a
friend in the world. Citizens Advice has said
that we
are concerned that the proposal to reduce backdating for pension credit
will have the opposite effect, making it less likely that the most
vulnerable older people will claim their full
entitlement.
Furthermore, I think
that all hon. Members have a copy of a briefing from Age Concern, which
is very blunt about this
issue: Age
Concern is against the reduction in time available to
backdate. Age
Concern talks about its research showing that, of those people who had
made backdated claims who they had surveyed, one in five had used that
money to clear debts.
Age Concern
has said that these issues cause considerable worry and distress to
older people. That relates to the SSACs comments and the
DWPs apparent principleit must be a new
principlethat changes that benefit one group of people should
be made at the expense of another group, in this case people on low
incomes. It gives a case study of a Mr. K
who, as a result of backdating, was able to clear his debts and improve
his finances. It also talks about the low rate of take-up of pension
credit.
Those very
serious organisations, which are dealing day to day with the existing
debt and other problems of older people and other vulnerable groups in
society, are united in their criticism of and opposition to the
regulations. The official Opposition and the Liberal Democrats are of
the same mind, and the SSAC has lambasted these regulations more than
once.
The
regulations have had an eight-year gestation period. One would have
thought, as the hon. Lady has said, that in all that time the
Government would have commissioned some serious work to examine the
real impact of the regulations on people.
I want to turn
briefly to the issue of the 13-week rule for pensioners living abroad.
We have no difficulty at all with that proposal, which makes a
considerable amount of
sense. Charlotte
Atkins (Staffordshire, Moorlands) (Lab): Will the hon.
Gentleman clarify whether it is his partys policy to retain the
pension credit?
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