Mr. Waterson: Yes. I am very grateful for that intervention. We have absolutely no intention of scrapping pension credit. However, we will be examining ways of improving the take-up of that benefit and other benefits. I also want to reiterate that we have no difficulty with the 13-week ruleI do not think that any hon. Member would have difficulty with it, because it makes sense.
Returning to the idea of helping pensioners in the round, we believe, like the Government, that we should restore the earnings link to the state pension. Sadly, the Government recently voted down a rebel Labour amendment that we supportedI think that the Liberal Democrats supported it toothat would have pinned Ministers down as to when that link would be restored.
We have no intention of abolishing pension credit, but we entirely accept the first recommendation of Age Concern in its briefing for this Committee:
A clear government strategy to address the low take-up of Pension Credit and other means-tested benefits is now needed as a matter of urgency.
We entirely agree with that commentevery single word of it. It seems to us that this Government have no strategy to increase take-up of these benefits. Indeed, these regulations will have exactly the opposite effect.
The question that remains for the Minister is this: does she genuinely believe that these regulations will increase take-up of these benefits, particularly among pensioners, or is she prepared to take a risk that the already dismal levels of take-up will fall as a result? It seems to me that this is an appalling act of penny pinching by the Government. It will reduce the take-up of benefits, increase pensioner poverty and cause needless distress to many of our elder citizens. Ministers and Government members of the Committee should hang their heads in shame, and I will certainly urge my hon. Friends to vote against the regulations.
Sir George Young: I repeat what others have said: it is a pleasure to serve under your chairmanship, Mr. Bercow. I wish to add a brief footnote to the two excellent speeches that we have heard so far.
First, the circumstances have changed dramatically since the regulations were announced in December last year. That was on the back of a difficult public expenditure settlement by the Department for Work and Pensions in which the Treasury had insisted on a large number of savings, of which this is one. The situation today is totally different. We meet on the eve of a pre-Budget report, when we know the Chancellor is looking around for measures to reflate the economy, particularly those that will feed straight through. We know from the House of Commons Library that the impact of the regulation will be to deprive the average individual affected of about £900. That is £900 in the pockets of people who are, by definition, badly off, so that money would otherwise go straight through into the economy and help us at a difficult time. While this might have
Secondly, although I am not an expert on procedure in the other place, I gather that it is most unusual for there to be a Division on such an instrument, but there was. That is almost unprecedented and indicates the feeling in the other place about the measure. I hope that there will not be a repeat today of the situation in that debate when not a single Government Member rose to support the Minister. I am sure that volunteers from the Government Benches will rise this morning to support the Minister, who I am sure does not want to be isolated in the discussion.
Thirdly, there is a contrast between the measures the Government are taking, to their credit, to help home owners stay in their homes and those they are taking on housing benefit in the regulations. To their credit, the Government are promoting a code of conduct among building societies and banks to ensure that repossession is right at the end of the options when people are confronted with a financial problem. The Government are inevitably conducting those negotiations at arms length, because they do not control the banks, or indeed the building societies, directly. That initiative, which I applaud, sits uneasily with these measures on housing benefit, which the Government are in direct control of because they set the regime for housing benefit.
The hon. Member for Cardiff, Central referred to evidence from Shelter suggesting that that will have an impact on homelessness. I do not begin to see how the Government reconcile the initiative being instigated by the Treasury on the one hand with the regulations before us on the other, which pull in exactly the opposite direction, making it more likely that people will lose their homes.
Lastly, my hon. Friend the Member for Eastbourne referred to what might be called the Lord McKenzie defence, which was deployed in the other place. My hon. Friend quoted one part of that:
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...We believe that these changes should encourage customers to take more responsibility for their housing costs at an earlier stage.[Official Report, House of Lords, 10 November 2008; Vol. 705, c. 519-520.]
I do not begin to understand that argument. We are talking about a group of people who, by definition, are unclear about housing benefit entitlement. If they were clear about it they would have claimed it. The notion that on 7 October they woke up and said, Good Heavens, the Government have passed the Social Security (Miscellaneous Amendments) Regulations, which cut the time that I can claim for, so I must get out and claim my housing benefit, is strictly for the birds. That is not the real world. Shortening the time in which they can backdate will have no impact at all on the behaviour of vulnerable groups.
There is still time for the Minister to influence the pre-Budget report. Lord McKenzie had a bad time getting the measures through the House of Lords, and I suspect that she will have an equally awkward time this morning. The best thing that the Minister could do would be to ask for provision to be made in the pre-Budget
Paul Rowen (Rochdale) (LD): It is a pleasure to serve under your chairmanship, Mr. Bercow. Like others who have spoken, I have grave concerns about the impact of this policy. Without repeating what others have said, I will raise a couple of points.
It has already been said that the pension and credit measures will affect older people. In fact, the figures that we have seen show that more than 65 per cent. of people over 70 who submit a claim will be affected. We are not talking about insignificant sums of money: for claims made between nought and three months, it is £200, but for a six to 12-month period, that figure rises to £1,350. I put it to the Minister that someone 75-plus who files a claim might have lost a loved one, which is why the claim has not been filed. That is a traumatic period, and it is a huge sum.
I support what the right hon. Member for North-West Hampshire said about housing benefits and council tax benefitsthere is no reason why they need to be aligned. They are given and dealt with by different bodies, usually councils. I speak as the ex-chair of a housing committee who knows the problems involved. Many tenants are not aware that under the rent protocol, arrears accumulate during the processing time, often through no fault of others.
What will be the effect of that policy? It will be more evictions and greater debt. Unlike pensioner credit or other debts, it is a cost against a house, so it will not disappear. The money given is meant to pay off a cost incurred. There is no doubt that the regulations can result only in greater hardship. Citizens Advice figures show that in 2006-07, citizens advice bureaux dealt with more than 8,000 inquiries about housing benefit and council tax arrears. That is a huge number of cases. Given the mechanisms and processing involved, many of those arrears fell outside the three-month period.
There is absolutely no justification for the alignment. It is purely a cost-saving measure that will result in increased hardship and more evictions. The Minister ought to be ashamed of herself.
John Howell: This is not the first Committee that I have sat on, but it is the first under your chairmanship, Mr. Bercow. All the others have had the same Chairman, so I am glad to see that there is more than one for this sort of meeting, and a very good one too.
It is difficult to understand how this cheeseparing measure can be pushed through without an understanding of the circumstances in which claims are made for periods greater than three months. We have touched on some of them, and the hon. Member for Cardiff, Central has covered many of the background points about poverty, but I return to the point that I made in my intervention about the specific circumstances in which people want to claim for longer than three months.
The hon. Member for Cardiff, Central also asked where the evidence was. The specific evidence is found in our experiences in our surgeries, and in the case studies produced by Citizens Advice and Age Concern. Those mirror my surgery experience. As I have pointed out, the relevant circumstances are often a sudden change, such as a death or sudden illness. Alternatively, frequently someone has struggled on for years and has used all their savings; they realise that they still have years to go, but have no money left. It is not surprising that it is older pensioners who suffer in those circumstances, because they are the most likely to suffer from such traumatic occurrences.
We need to understand what the money is spent on. In my experience, it is not frittered away on luxuries. In many cases, it is used for essential things, such as putting in stair lifts when someone has had heart bypass surgery. Age Concern makes the point that it has a positive role in managing debt for older people. Given the economic circumstances at the moment, I would have thought that the Government would do anything to help reduce debt. I recommend not just the briefing material produced by Age Concern but the underlying report, Flagship or flagging? The impact of Pension Credit five years on.
We need also to consider the subject more in terms of its context. The recent report by the Institute for Fiscal Studies, The inflation experience of older households, makes it clear that pensioner groups suffer disproportionately high inflation, compared with other groups in the community, largely because of additional heating costs. As has been pointed out, in the circumstances, and in the grand scheme of things, the amounts, even for a full 12 months, are not particularly large, but they are particularly significant for the age groups and individuals who claim. In the light of that, and in the current economic climate, the measure before the Committee appears even more cheeseparing than normal.
The overall context in which the measure has been put forward is also strange, in that in the past five years there have been no positive changes with respect to pensioner households in poverty or those who fail to claim the benefit. I perceive a failure on the Governments part to understand the difference between the reform and simplification of benefits and the reform of the process. We have ended up with some tinkering around with the process, so that measures such as the one we are discussing have an adverse affect on the people we are trying to help.
Daniel Kawczynski: It is a great pleasure to serve under your chairmanship, Mr. Bercow. I concur with other hon. Members remarks on what an excellent Chairman you areunique, in fact.
I often speak to the Shropshire senior citizens forum, to which I have referred before in debates in the Chamber, when the Minister has been present, and about which I have spoken to her. It is by far the largest organisation in Shropshire, with more than 8,000 members. What amazes me is the number of people in the organisation who are not aware of the credits that they are entitled to. As I said when I intervened on the hon. Member for Cardiff, Central, I urge the Minister, rather than spending millions of pounds on pamphlets and on television and newspaper advertising, to get in
The senior citizens forum recently held a meeting in the Guildhall in Shrewsbury, for all senior citizens forums from across the country. Those senior citizens forums are starting to work togetherto come together and form national bodies to disseminate best practice and thinking, and to exchange information. Two months ago, literally thousands of senior citizens from all over the United Kingdom came to Shrewsbury for the first nationwide meeting of senior citizens forums. I am happy to give the Minister the details of Shrewsbury senior citizens forum, which has a network of contacts across the UK. It would be a very good thing, if she were prepared to host a conference, here in the House of Commons, to explain directly to these people how they can navigate the system to ensure that their members do not lose out. I would appreciate that greatly.
As my hon. Friend the Member for Eastbourne has stated, Citizens Advice has concerns about recent developments:
While we welcome the package of measures introduced to simplify the claims process for Pension Credit, Housing Benefit and Council Tax benefit for older people, 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.
I concur with that. It is very important to listen to the impartial Citizens Advice on this matter. The problems to date have resulted from Government failure. Reducing backdating will only penalise senior citizens further.
Some 1.2 million to 1.8 million pensioners have failed to take up their entitlement to pension credit this year. I find those figures staggering. That 1.8 million citizens in this country could not be receiving the payments to which they are entitled is a serious and worrying issue, about which the Minister, and every hon. Member in this Room, should be concerned. I come from a business background, and if my salary were incorrect, I would be down to the human resources department that very day to try to sort it out. People are affronted and upset if their salaries are wrong in anyway, no matter how small. People work for their salaries and are entitled to the full amount, and the same applies to senior citizens. People who have worked all their lives, paid their way and contributed to the state deserve every last penny to which they are entitled.
Up to 1.2 million pensioners not receiving their full entitlement are living in poverty, which is classified as below 60 per cent. of median income, measured before housing costs. Pensioners not taking up their entitlement to pension credit are also less likely to claim their entitlement to housing and council tax benefit. A pensioner entitled to, but failing to claim, all three benefits, will miss out on an average of £81.20 a week, which would boost the income of a single pensioner living on the poverty line by 50 per cent. It is staggering that some of the most vulnerable citizens in my constituency might be missing out on £81.20 a week. That is a great deal of money to themI know this from listening to many of them at my surgeriesand would make a huge difference to their lives over the winter and throughout the year.
I get very emotionally attached to some of the senior citizens in my constituency who come to my surgery. An 83-year-old lady and an 82-year-old gentleman came to see me from the village of Dorrington. They simply
I wanted to go through the pamphlets with them about how to claim council tax and pension credits, but found them baffling, as did they, although I do not consider myself to be stupid or lacking in understanding of literature. I intend to organise a conference in Shrewsbury because of what has been said today. I shall get the citizens advice bureau and all the experts in my community who understand pension credit, housing benefit and council tax together and organise a conference in the Guildhall with the citizens advice bureau and the senior citizens forum. I shall put them together to try to get them to explain directly to my constituents how to claim. I will let the Minister know when the conference takes place, and in subsequent months perhaps she will monitor the changes in uptake, because I am convinced that there must be direct human contact with pensioners, whether through an MP or, ideally, with the Minister at a national conference, to disseminate information to make a real improvement. Pamphlets and advertising are not sufficient.
The whole system of credits and giving out benefits that the Government have created simply does not work. My secretary, Mrs Helen Sheppey, and I spend a huge amount of time dealing with child tax credits, child support agency payments, pension credits and so on. An MPs role is fundamentally changing, because the Government have not got to grips with sorting out benefits. Instead of dealing with major investment opportunities for our constituency, we are tied up with matters that should operate automatically or be taken care of by Departments.
During a recent Westminster Hall debate, the then Minister, who is now the Minister of State, Department for Environment, Food and Rural Affairs, the right hon. Member for Liverpool, Wavertree (Jane Kennedy), kindly acknowledged the work that my office does and sent my secretary a box of chocolates for her work on credits. Perhaps the Minister today will also acknowledge the work that my secretary does on pension credits, and send her a box of chocolates.
|©Parliamentary copyright 2008||Prepared 14 November 2008|