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Poverty (Elderly People)
6. Ann Winterton (Congleton) (Con): If he will make a statement on trends in levels of poverty among the elderly. [Official Report, 10 July 2008, Vol. 478, c. 12MC.] [216454]
The Minister for Pensions Reform (Mr. Mike O'Brien): The number of pensioners in relative poverty has fallen by 900,000 since 1997, and the number in absolute poverty has fallen by 1.9 million.
Ann Winterton: The Government’s fuel poverty target has, according to their own advisers, been missed, so I wonder what warm words they can offer elderly people and pensioners who face dramatically increased fuel costs. The Government appear to have no clear strategy for addressing fuel poverty among the elderly, who will be too afraid to turn up or even to switch on the heating in case they incur very large bills. What action will they take to assist this most vulnerable section of our community?
Mr. O'Brien: I would have thought that the hon. Lady had informed her constituents that winter fuel payments will increase this year. There will be an extra £50 a week for those aged between 60 and 80 and an extra £100 for those aged over 80, bringing to £250 the amount that the Government provide to the elderly each year to help with their winter fuel bills. An extra £400 in winter fuel payments will be paid to those aged over 80. Indeed, we are going further than that by taking powers in the Pensions Bill, which is currently going through the other place, that will enable the data sharing of information with suppliers so that poorer pensioners can be put on to lower social tariffs, ensuring that they pay lower bills and get insulation. Warm Front has given 1.7 million homes assistance on insulation: an average of £2,700 has been provided to ensure that homes are insulated and fuel bills are kept down, so quite a lot is happening in this respect.
Ms Sally Keeble (Northampton, North) (Lab): I welcome the progress in tackling pensioner poverty. Does my hon. and learned Friend agree that one of the most important safeguards against pensioner poverty, especially for women pensioners, is the chance to have a work-related pension pot, and will he say what progress is being made on the development of personal accounts?
Mr. O'Brien:
We certainly need to ensure greater pension equality for women. We reformed the state pension system to ensure that the number of women who receive a full basic state pension will rise from
about a third to 75 per cent. in 2010, and, indeed, up to 90 per cent. in the 15 years thereafter. That will give them equality with men, but it is only the basis of change. We are introducing automatic enrolment, which will ensure that the employers of millions of women currently unable to get a private pension will be obliged to provide one, into which the women will be automatically enrolled. Millions of women will be able to build a pension pot to give them a more secure retirement.
Hywel Williams (Caernarfon) (PC): Last month, the town council of Pwllheli in my constituency wrote to the Secretary of State expressing concern about pensioner poverty. The reply referred to the availability of pensioner credit, housing benefit and council tax benefit. Is the Minister satisfied with the take-up of those benefits, and, if so, will he tell the House, and Pwllheli town council what the take-up level is?
Mr. O'Brien: I am not satisfied with the take-up of pension credit, which is why we are undertaking reforms, including, as of October this year, making pension credit, council tax benefit and housing benefit more easily accessible. We will introduce a series of changes whereby an application for one will automatically entitle someone to the others. Help the Aged and Age Concern have requested the change for a number of years, and it will be introduced from October. I hope that the hon. Gentleman is assured that action is being taken.
Michael Jabez Foster (Hastings and Rye) (Lab): Our Labour Government’s passion for eradicating pensioner poverty should be applauded. Until April of this year, it could be said with certainty that no pensioner was worse off as a result of a Labour Government, and that the poorest were £40 a week better off. Given recent inflation figures, does my hon. and learned Friend believe that the rate of inflation, rather than the retail prices index, should apply to pension increases next year?
Mr. O'Brien: We have addressed the matter of uprating, but we want to restore the link with earnings, which, as my hon. Friend knows, the Conservatives removed some time ago. We have said clearly that we intend to restore the link by the target date of 2012, or in the course of the following Parliament, and we aim to use its restoration as a foundation block on which to build better pension entitlement for the long term.
Mr. Nigel Waterson (Eastbourne) (Con): Does the Minister accept that the latest figures, which show that an extra 300,000 of our older citizens now live in poverty—well above 2 million—are bad enough, but that since the statistics were prepared even more pensioners will have been driven into poverty by the recent surge in energy and other living costs? Is it not time that the Government got serious about tackling pensioner poverty?
Mr. O'Brien: I have to ask the hon. Gentleman whether he remembers that it was his party that broke the earnings link—this party is committed to restoring it. Does he remember that his party left millions of pensioners destitute and in poverty, on £68.80 a week? Under us, the minimum that people have a right to receive is £124, and we hope to be able to continue to increase it. We have lifted 1.9 million people out of absolute poverty—poverty that his party left those people in.
Mr. Dennis Skinner (Bolsover) (Lab): Whatever happens in the course of the next winter, one thing is certain: I do not expect anybody from our Front Bench to tell old-age pensioners to knit a woolly hat or to take a hot water bottle to bed, just like the Minister did in those grim Tory years. What was her name? It was Edwina Currie, and there are a load of them on the Tory Benches that act just like her.
Mr. O'Brien: My hon. Friend is entirely right. We do not need to say that, because we will provide additional help to pensioners so that they can turn up the heating rather than worry about having to knit. The Conservative party’s attitudes are exemplified by that comment, and this Government’s attitudes are exemplified by the fact that we are increasing payments to pensioners at the very time when fuel bills are going up. We acknowledge that, and we are doing something to help pensioners.
Mr. Nigel Evans (Ribble Valley) (Con): The Minister will know that the elderly tend to look to their families to give them some support after they have retired, which no doubt saves the Treasury hundreds of millions of pounds. However, if their children have emigrated, particularly to Commonwealth countries, and they follow them to those countries, we treat them as second-class citizens and do not uprate their pensions. They can therefore become impoverished. When are we going to bring justice to British pensioners who decide to emigrate to Commonwealth countries to live closer to their families in retirement?
Mr. O'Brien: The hon. Gentleman will know that the long-standing policy, which both the Conservatives and this Government have adopted, is that we will not uprate the pensions of those in non-EU countries unless we have an agreement for reciprocal uprating with those countries. Although a case can be made for those who live in other countries, if there is additional money to spend and there are still issues of pensioner poverty in this country, which there are, my priority ought to be to reduce that poverty. If there is any extra money, that is what I intend it to be spent on.
Child Poverty
7. Mr. Clive Betts (Sheffield, Attercliffe) (Lab): What recent discussions he has had with the Chancellor of the Exchequer on measures to reduce levels of child poverty. [216455]
The Minister for Employment and Welfare Reform (Mr. Stephen Timms): We discuss the child poverty strategy regularly with Treasury Ministers. For example, I shall meet the Financial Secretary to discuss that subject later today. We have a shared commitment to make further progress in reducing child poverty, building on what has been achieved so far.
Mr. Betts:
I welcome my right hon. Friend’s commitment, but may I draw his attention to an anomaly? Many children in this country have parents who work but do not pay income tax, because they do not earn enough. Parents in those same families could well be paying council tax, because the level at which council tax is paid is lower than that at which income tax is paid. Will he consider raising the threshold for both council tax
benefit and housing benefit? At a stroke, he could take a step that would take thousands of children out of poverty and go a long way towards helping the Government meet their targets.
Mr. Timms: My hon. Friend makes an interesting point, which, as he will know, the Select Committee on Communities and Local Government raised last year. Of course, council tax is a tax on property rather than on income, so it is not too surprising that the conditions are a little different. We said in our response to the Committee’s report that we were prepared to examine the viability of aligning council tax benefit eligibility with other parts of the tax and benefits system over time. It cannot be done very quickly, but my hon. Friend is right to draw attention to the case for greater alignment, and we will examine the viability of that.
Phil Wilson (Sedgefield) (Lab): Will my right hon. Friend join me in congratulating the Sure Start children’s centres in Chilton, West Cornforth, Dean Bank, Fishburn, Newton Aycliffe, Thornley, Wheatley Hill and Wingate in my constituency on their work in alleviating child poverty? Does he agree that that is a crusade for this Government, not just an aspiration, as it is for the Opposition? They had 18 years to get it right, and they did nothing.
Mr. Timms: I agree completely with my hon. Friend and join him in paying tribute to those Sure Start centres for their achievements and lamenting the absence of a commitment from the Opposition. Sure Start has not only provided the best possible start for young children and made a very important contribution to tackling disadvantage among children, but is increasingly providing places where support can be directed to parents. There is help back into work, advice on applying for and receiving tax credits and other help that people need.
I recently visited a Sure Start centre in Lambeth, where a back to work course being delivered by Tomorrow’s People was doing a great job. We want Sure Start centres to be used increasingly in that way.
Benefit Claims
8. Mr. John Heppell (Nottingham, East) (Lab): What progress has been made on the use of voice recognition analysis in respect of benefit claims. [216456]
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): Voice risk analysis is being piloted by 14 local authorities for claims and reviews of housing and council tax benefits. Those pilots are going well, and so a further 15 are being arranged. We are also piloting that technology in Jobcentre Plus for jobseeker’s allowance and income support claims. Full evaluation results from the initial pilots will be available later this year.
Mr. Heppell: I welcome anything that tackles benefit fraud, but will the Under-Secretary assure me and the House that those analyses will not be used to target vulnerable people or, indeed, result in the withdrawal or withholding of any benefits without real evidence?
Mr. Plaskitt: I can give my hon. Friend that absolute reassurance. The technology that is in use does not in itself prove benefit fraud. All that it does is indicate levels of potential risk in the call, which lead us to decide which verification process to follow to establish the merit of the claim. When there is a question about any claimant having difficulty in pursuing a claim over the telephone, we will establish that early and always make alternative arrangements such as home visits or face-to-face meetings. Although we are also tackling benefit fraud, our objective throughout is to ensure that we pay the right benefits to the right people at the right time.
Occupational Pensions
9. Mr. David Heathcoat-Amory (Wells) (Con): What recent estimate he has made of the number of defined-benefit occupational pension schemes in which the liabilities exceed the assets. [216458]
The Minister for Pensions Reform (Mr. Mike O'Brien): On the Pension Protection Fund’s assessment basis, 5,000 schemes.
Mr. Heathcoat-Amory: The final salary schemes in the private sector have been shutting for many years as unaffordable. The decline in the investment market has made many more extremely vulnerable. Does the Minister believe that the Pension Protection Fund, which he has just mentioned, to which vulnerable schemes have to contribute, is adequate to fund possible insolvencies in the years ahead?
Mr. O'Brien: The Pension Protection Fund is best placed to make an assessment of the adequacy of the amounts that it needs, and it has done so and levied accordingly.
Benefit Simplification
10. Willie Rennie (Dunfermline and West Fife) (LD): What recent progress his Department has made on the simplification of benefits. [216459]
The Minister for Employment and Welfare Reform (Mr. Stephen Timms): Simplification is essential to reform. For example, the local housing allowance, rolled out from April, has simpler and clearer rules than the previous housing benefit system. Last month, following successful pilots, we agreed with the Local Government Association on a simpler approach to claims when starting a job. From October, two current benefits—incapacity benefit and income support on health grounds—will be replaced by one: the new employment and support allowance. Those are all examples of simplification.
Willie Rennie:
I recognise that some progress has been made on simplifying the benefits system, but much more needs to be done. Will the Minister investigate the case of my constituent, Sara McGlynn, who is suffering because she is not ill enough to earn an invalidity benefit? She has not earned enough in the past, because she is too young and does not receive incapacity benefit, and as her partner earns just above the minimum income level, she does not receive income support. Will the
Department investigate the case so that complexity does not rule out that person’s receiving Government support?
Mr. Timms: I am happy to consider the details of that case if the hon. Gentleman will forward them to me. However, it does not sound to me like a problem of complexity. The system has been effective in increasing employment—we have more people in work in Britain today than ever before, and that is partly the result of the success of welfare reform. However, I agree that simplification is important. For example, we will explore further the idea of a single working age benefit, which would be a radical simplification and would perhaps partly deal with the case of the hon. Gentleman’s constituent. I repeat that I am happy to look at the details of the case.
Mr. David Kidney (Stafford) (Lab): Will the Minister consider simplifying the double benefit rules, especially regarding carer’s allowance and the state retirement pension? Will my right hon. Friend be willing to examine that rule, which is of long-standing concern to pensioners? I am sure that the designers of the welfare state in the 1940s could not have expected so many pensioners to be carers for other pensioners—whether spouses or elderly parents. It is a shock to the system to find that, when they receive state retirement pension, their carer’s allowance stops.
Mr. Timms: My hon. Friend is right to make the point that people are often concerned when they get into that position and discover that that is the rule. He will know, however, that it is a long-established principle of the benefits system that we do not pay two benefits in those circumstances. I cannot hold out for him the prospect that that will change imminently. However, he will know of the carer’s premium in pension credit, which is helping to address the problem that he rightly highlights, and we will of course see whether there is more that we can do.
Mr. Peter Bone (Wellingborough) (Con): A number of my constituents have come to me and complained that their incapacity benefit was stopped after a medical and that, although they then went to appeal and won the case, they experienced a huge delay before their benefit was restored. If that benefit can be stopped immediately, why can it not be started again?
Mr. Timms: When an appeal is successful, benefit should come back into payment very quickly. Again, if the hon. Gentleman wants to draw my attention to any particular problems, I should be happy to look into them; however, anybody who experiences a delay will have their arrears paid in full.
Defined-benefit Pensions
11. Mr. David Amess (Southend, West) (Con): What estimate he has made of the number of defined-benefit pension schemes which are open to new members. [216460]
The Minister for Pensions Reform (Mr. Mike O'Brien): About 2,400 defined-benefit pension schemes remain open to new members.
Mr. Amess: Given the Prime Minister’s disastrous decision in his first Budget as Chancellor of the Exchequer in 1997 to raid pension funds to the tune of £5 billion, does the Minister share my concern that the take-up in defined-benefit pension schemes has dropped by 1 million in the past year and that, as I understand it, about 4,000 schemes have closed? If the Minister shares my concern, what are the Government going to do to address the present parlous situation?
Mr. O'Brien: The hon. Gentleman will be aware that pensions are for the long term and that investments go up and down. Therefore, deficits appear in schemes at different times, which sometimes go into surplus. Such changes occur. The only people immediately at risk would be those in a scheme where the employer moved into insolvency and there was a significant deficit. That is why the Pension Protection Fund has been set up. I remind the hon. Gentleman that the Government have restored confidence in pensions, not only by setting up the PPF, which ensures that people have a kind of insurance scheme, and creating the regulator that oversees risk in the pensions market, but by sorting out the financial assistance scheme and ensuring that those 140,000 people got justice. We are in the process of restoring confidence in pensions—a confidence that was seriously damaged by his Government.
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