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 rule—I 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 supported—I think that the Liberal Democrats
supported it too—that 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 comment—every 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. 9.35
am
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
looked like a sensible measure for the Department to sign up to in
December last year, on the eve of the pre-Budget report, when the
economic conditions are totally different, it is wholly wrong for the
Government to do
it. 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 arm’s 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
report to reverse the measure. I guarantee that when she comes back with
a fresh statutory instrument in about six months’ time, I will
not make a speech—I will sit in my place and hope that it passes
without debate. The regulations are the wrong measure at the wrong
time. Even at this late date, the Government might reflect on how they
can mitigate the damage that they are
doing. 9.40
am 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 benefits—there 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. 9.43
am
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
Government’s 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. 9.48
am
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
are—unique, 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
touch with such organisations directly and to interact with them in the
House of Commons and at national
conferences. 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 together—to
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 them—I know this from listening to many of them at my
surgeries—and 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
cannot afford to pay their council tax. I shall not tell the Minister
exactly how much they are paying, but it is an astronomical figure. I
said, “You must be living in a mansion or a palace, if you are
paying that much”—it is far more than my council
tax—but the gentleman replied, “No, I built the house
myself with my brother in 1959. I can’t help the fact that it
has increased massively in value.” About 40 per cent. of that
couple’s state pension goes towards their council tax, and they
have turned their house into a bed and breakfast to make ends meet. I
always use that example, because I would be loth to be working in any
capacity at the age of 83, no matter how fit I might be. That may not
be the case for everyone, and some people may want to work until their
80s or 90s, but people should not have to work at that
age. 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 MP’s 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.
| 
