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“I want the next Labour government to achieve what in 50 years of the welfare state has never yet been achieved, the elimination of the massive means testing now imposed on the elderly”.
Today, almost half of pensioners—45 per cent.—are subject to means-testing. Whether that is a massive number I shall leave it to others to judge, but it is beyond peradventure that means-testing is very much in evidence in the pension credit system set up by the Government. Once again, there is a serious problem of lack of take-up.
Anne Snelgrove: Does the hon. Gentleman recall that his Government increased VAT on fuel—17.5 per cent. on heating for pensioners? The Labour Government kept our promise to reduce it.
Mr. Clappison: We could go round and round the individual changes and I would soon be out of order, Madam Deputy Speaker. However, I am happy to rest my case on the fact that the Conservative Government left in place a strong pension system—a strong system of pension provision—that was recognised at the time as the envy of Europe.
Anne Main: I am well aware of the fact that some people would rather talk about history than the present day. On low take-up of council tax benefit, I am sure that my hon. Friend agrees that areas such as Hertfordshire, and indeed St. Albans, had such a poor settlement that their council tax will inevitably rise, which will hit the very pensioners who do not claim the benefit and struggle to pay their bills.
Mr. Clappison: Council tax benefit is a salient point in relation to the order. I have to tell the hon. Member for South Swindon that many pensioners are recognising the shortfall in their finances given what they have to pay for fuel and food, as well as the high council tax increases they will have to pay. The situation is difficult for many pensioners and I think she will find that few of them regard their finances with the same degree of satisfaction as Labour Members— [ Interruption. ]
Mr. Clappison: I do not know which is coming first, Madam Deputy Speaker—the stricture or the intervention. I shall take the intervention and wait to see what happens.
Anne Snelgrove: The hon. Gentleman is generous in giving way, but that is about all. The Labour Government have been more generous to pensioners than any previous Government. Fewer pensioners are living in poverty under Labour than under any previous Tory Government.
Mr. Clappison: I am aware of your strictures, Madam Deputy Speaker, so I shall be brief.
Many pensioners in my constituency and in many others—perhaps even the constituency of the hon. Member for South Swindon—wanted a general election last autumn to test these matters. The sooner the issues can be put to the test, the better. I am sure the hon. Lady wants the same thing.
Lord Commissioner of Her Majesty's Treasury (Mr. Dave Watts): Change the subject.
Mr. Clappison: I shall stay on the subject of pension credit because it is extremely important. I am not sure whether the Minister, in his fairly lengthy opening remarks, outlined the full extent of the problem of pension credit take-up. According to a written parliamentary answer of 19 October 2007, total pension credit take-up in 2005-06 was between only 60 and 69 per cent. by case load, and between 70 and 78 per cent. by expenditure. That meant that between 1.7 million and 1.74 million pensioners entitled to pension credit were not claiming it and that between £1.6 billion and £2.5 billion of pension credit was unclaimed.
Mr. MacNeil: Does the hon. Gentleman recognise the advantageous situation for pensioners in Scotland? Their council tax has been frozen this year thanks to the change from a Labour-Liberal Democrat Executive to an SNP Government.
Madam Deputy Speaker: Order. That is testing my patience and going very far wide of the order.
Mr. Clappison: Perhaps we can discuss that general subject on another occasion.
The important point in respect of the order is that up to 330,000 people were not claiming the guaranteed part of the credit—between 70 and 80 per cent. of the case load. That is extremely serious and we must surmise that many of those people are in a grave financial situation.
On the savings element of pension credit—the Minister pulls a face again; he will pull an even worse one when I tell him this—fewer than half of those entitled to it claim it. If he wants to gainsay that, I am happy for him to do so.
Mr. Mike O'Brien:
I hear what the hon. Gentleman says about the pension credit. If he listened to my speech, as I am sure he did, he will know that I have just announced that we are working with Help the Aged and Age Concern to increase the take-up of
pension credit. In December, we announced proposals that will lift about 50,000 more pensioners out of poverty and get them registered for pension credit as well as for a series of other benefits.
Mr. Clappison: It gives me no great pleasure to recollect that I was one of those who served on the Committee that considered the State Pension Credit Bill during its passage through the House in 2002. If I had said to Ministers then that six years later their system would be so complicated and that so little of the money would be getting through to pensioners that those Ministers would come back before the House to plead for help from various worthy and important interest groups, and even from Members of Parliament, they would have laughed me out of court. We were told at the time that it was a wonderful system that people would find easy to use.
Mr. Clappison: I do not know whether the hon. Gentleman debated that Bill and is going to tell me that I am wrong, but I will happily give way to him.
Chris Ruane: Can the hon. Gentleman remind us what the take-up of pension credit was under his party’s Government?
Mr. Clappison: As the credit was created in 2002, I think that it is within the wit of the hon. Gentleman to know that it was created by the present Government, as a way of redirecting resources.
Chris Ruane: You did not have it.
Mr. Clappison: Well, the serious problem is that there are 330,000 pensioners who do not have it today, and that is what we should be debating.
I noticed the words that the Minister used in his opening remarks. He said that he wanted to see more people claim pension credit, and that the Government “seek to increase pension credit take-up”. The fact is that the Government have missed their target of paying pension credit to 3 million households. They should have hit that target two years ago, but in 2005-06 some 2.65 million households were in receipt of the credit. It is against that background that we should view the statistic that today in Britain, notwithstanding the satisfaction that the hon. Member for Vale of Clwyd (Chris Ruane) and his colleagues feel about the matter, 2 million pensioners live in poverty.
The Conservatives join the Minister in the objective of improving the lives of those pensioners and getting through to them the entitlements that they should receive. The National Audit Office estimates that increasing the take-up of pension credit by 10 per cent. would lift an extra 100,000 pensioners out of poverty, while a similar increase in the rate of take-up of housing and council tax benefits would move 130,000 out of poverty. We share the general objective of moving those pensioners out of poverty—we want to see that happen—but the problem is that the Government’s present measures, including the uprating order, will not make it happen.
I remember the Government being warned when they introduced the pension credit that they were relying on a complex system. Indeed, at one point we were told that they seemed to be relying on the assumption that working people would not understand the system, as if they did they would choose not to save. To be fair, the Minister acknowledged today as well as in his statement on 5 December some of the problems with pension credit take-up.
As a general principle, we welcome any help that can be given to pensioners and others who struggle with the complexity of the system. Ministers have very fairly admitted, finally, that pensioners find the forms confusing, and the Government are trying to put in place a different system to help them. With that in mind, how does the Minister propose to monitor the effects of the changes that he described today and on previous occasions, particularly changes relating to the claiming of pension credit? What is his most recent estimate of take-up of pension credit, and what expectations do the Government have on that front? As a matter of interest, to put his good intentions to the test, what estimate of pension credit take-up has the Chancellor of the Exchequer used in his spending plans for the years to come? What is the Government’s estimate of pension credit take-up for those purposes?
Chris Ruane: I thank the hon. Gentleman for being so generous in giving way. He has rightly given the Minister a list of questions to answer, but if he is not happy with the way the Government are administering and allocating resources to pension credit, will he say how much additional funding his party would allocate to get it to the level he would be happy with?
Mr. Clappison: I was hoping the hon. Gentleman might throw some light on what the Chancellor of the Exchequer believes the take-up will be. As I said, we believe the system should be as simple as possible. We warned the Government against the complexity that they put in place in 2002, which makes it so difficult for pensioners to claim these credits. We will help pensioners in any way we can, both as individual MPs and as the Opposition, but we will not take the blame for the complex system that the Government put in place, when we warned them against it.
Danny Alexander: The hon. Gentleman is rightly drawing attention to the complexity of the benefits system. It is astonishing, therefore, that the report to which he referred earlier from his party’s social justice commission did not make a single proposal about benefit simplification. It simply recommended that the whole issue of benefits should be dealt with in another report. Does he himself have any particular proposal on benefits that should be simplified?
Mr. Clappison: I will happily supply the hon. Gentleman with a copy of our proposals in that regard. He knows that we have had debates on the Floor of the House, we have raised and highlighted the issue on many occasions, and we have been complaining for a long time about the complexity of the benefits system and the hundreds of different forms that pensioners have to fill in.
I turn to another aspect of complexity on which it would be useful to have the most up-to-date statistical summary from the Government—some of the issues relating to the order. We understand that the problems
that Government Departments experienced last year in respect of data transfer—I am sure the Minister is familiar with those, as are other hon. Members—apparently led to a review by his Department’s Permanent Secretary of how data are transferred. As a result, a temporary suspension of the movement of data was introduced.
That has meant, among other things, that the Department’s quarterly statistical summary, which should have been published on 13 February, was not released. There may have been a statistician out there who was prevented from giving his or her ideal Valentine’s day gift on 13 February, but we need an up-to-date statistical picture of the work of the Department. Can the Minister say how long the review will last? Can he give us an assurance that the information that was not published on 13 February will eventually be published, and can he give us some indication when that is likely to be?
We know that there are many administrative problems affecting the Government in general and the Department in particular, but we would like to see statistics published as soon as possible, so that we will have an opportunity to monitor some of the aspects about which we have been asked many questions this afternoon by those on the Government Benches.
On the subject of administrative problems in the Department, I would be grateful if the Minister could throw some light on the extent of error in the Department’s benefit payments. The benefits uprating order is important in that respect. In a written answer to me on 17 September last year, the Under-Secretary of State for Work and Pensions, the hon. Member for Warwick and Leamington (Mr. Plaskitt), told me that the error in benefit payments had risen from a value of £1.1 million in 2000-01 to £1.9 million in 2005-06. It has risen for every year in that period. Can the Minister give us any more up-to-date figures on that? Can he explain the increase? Can he say how much is because of customer error and how much is down to official error, and what steps are being taken to reduce the loss?
A number of the payments specified in the schedules to the uprating order relate to children as, for example, in the case of payments for dependent children in income support, where there will be an increase from £47.45 to £52.59 each week. We need to see how those and other upratings in the order fit into the overall picture on child poverty. Some 2.8 million children now live in poverty before housing costs are taken into account, and 3.8 million do so after housing costs. It may interest Labour Members to know that the number of children living in poverty is on the increase: in 2006, it rose by 100,000 before housing costs and by 200,000 after housing costs.
Mr. Clappison: I shall give way to the hon. Gentleman if he accepts that child poverty is on the increase and if he can give us an explanation for that.
Chris Ruane: This is the third time the hon. Gentleman has given way, and I thank him for that.
The hon. Gentleman is critical of what the Government have done about child poverty. May I remind him of the words of the shadow Minister with
responsibility for family welfare, the hon. Member for Basingstoke (Mrs. Miller)? She said:
“As all speakers have acknowledged, aspects of child poverty have improved significantly.”—[ Official Report, Westminster Hall, 6 March 2007; Vol. 457, c. 416WH.]
Furthermore, the hon. Member for Croydon, Central (Mr. Pelling) said:
“Good work is being done by the Government through Sure Start and other means to bring lone parents into economic activity.”—[ Official Report, Westminster Hall, 6 March 2007; Vol. 457, c. 407WH.]
The party of the hon. Member for Hertsmere (Mr. Clappison) has recognised those things, but he has been very curmudgeonly in his assessment of what we are doing.
Mr. Clappison: I was not being curmudgeonly, but simply citing a salutary statistic that will not be entirely answered by the sort of point just made by the hon. Gentleman. Despite everything that we have been told, child poverty is on the increase and the number rose by 100,000 before housing costs and 200,000 after them.
Mr. Mike O'Brien: Under this Government, child poverty has been reduced by 600,000. As a result of the recent Budget announcements, 300,000 more children are likely to be lifted out of poverty.
Mr. Clappison: The hon. and learned Gentleman knows that the Government keep missing their targets in that regard, and they are not prepared to state that they will meet their targets. It was clear that in the past year, notwithstanding the Government’s targets, child poverty has risen. Against that background, we need to see how this uprating fits into the child poverty picture.
As I said, the Government missed their target last year. We apprehend from Monday’s Question Time that they are not on track to achieve their target of halving child poverty by 2010. The Minister evinced some interest in the issue in an early intervention on me. Now that he has had time to think about it, can he tell us where the Government are with regard to that target? If they are not going to achieve it by 2010—and we do not think that they are, given the background—when do they believe they will?
Danny Alexander: Will the hon. Gentleman give way?
Mr. Clappison: I have been generous in giving way, but I shall give way to the hon. Member for Inverness, Nairn, Badenoch and Strathspey.
Danny Alexander: I am grateful to the hon. Gentleman, who has indeed been generous in giving way. He is making an important point about how the Government are way off meeting their child poverty target. The latest assessments suggest that the target will not be met until a number of decades beyond 2020. I thought the Conservative party was signed up to the objective of abolishing child poverty by 2020. Will the hon. Gentleman confirm that?
Mr. Clappison: We have set out our objectives. The hon. Gentleman has actually been rather kind to the Government; I have been accused of attacking them. He has said that the target will not be met until decades to come, whereas I am simply asking when it will be met. The hon. Gentleman and I share an interest in the response.
Mr. Clappison: I have given way a lot, and time is limited— [Interruption.] I am being criticised by the hon. Member for Vale of Clwyd, to whom I have given way already. If the hon. Member for West Bromwich, West still has a burning question later, I shall give way then. I want to raise several other important issues arising from the order.
Mr. Clappison: I think the hon. Gentleman will be good enough to recognise that I have given way quite a bit, including to him.
I turn now to whether the operating changes relate to people and families living in poverty and severe poverty. According to a paper issued last year by the Institute for Fiscal Studies, relative poverty in the United Kingdom rose in 2005-06—an increase of 400,000 before housing costs and 600,000 after housing costs are taken into account. The institute says:
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