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Angela Eagle: At a time of very great difficulty, we have put £1 billion extra into pensioners' pockets with the increases that I am setting out in this uprating statement. The connections to prices indicated that no increase at all would have been appropriate, but my right hon. Friend the Chancellor has stuck to the pledge that we made in 2001 that an increase in the basic state pension of RPI or 2.5 per cent.-whichever was the higher-would be fulfilled. I wonder whether Conservative Members will confirm tonight that their policy is to stick with the 2.5 per cent. underpinning for the basic state pension, which has been in place under this Government since 2001.
For the poorest pensioners, my right hon. Friend the Chancellor has also confirmed that the standard minimum guarantee on pension credit will increase by more than earnings from April, by £2.60 a week for single pensioners and by £3.95 for couples.
Lynne Jones (Birmingham, Selly Oak) (Lab): It is understandable that hon. Members should speak out on behalf of pensioners, but may I highlight the plight of people on unemployment benefit? The level of jobseeker's allowance is absolutely derisory. It will go up from £64.30 to £65.45 for those over the age of 25, which is half the minimum amount that a pensioner is expected to live on. For those under 25, it will go up to £51.85. How are people expected to live on those amounts?
Angela Eagle: It is true that our benefits systems do not replace a high percentage of earnings once one gets off the contributory level. Part of that is about work incentives and encouraging people to move off benefit into work. My hon. Friend knows that in many cases jobseeker's allowance is not the only benefit to which individuals are entitled in the circumstances of looking for work. I have sympathy with what she is saying, but these things have to be balanced by the overall cost of the benefit system and the effect on work incentives of high replacement earnings rates for benefits.
Lynne Jones: The Minister says that JSA is not the only benefit. Has she any idea what proportion of people on JSA get additional benefits, apart from housing allowances? The figures that I read out a few moments ago are the basic amount that the majority of single people on JSA have to live on.
Angela Eagle: I am happy to write to my hon. Friend to answer her question, as I confess I do not have the exact figures in my head at the moment.
I was about to say that the increases in the standard minimum guarantee and pension credit, which are higher than earnings, will mean that from April no single pensioner will be living on less than £132.60 a week and no couple on less than £202.40 a week. That demonstrates a real-terms increase of more than a third for the poorest pensioners since 1997.
The above-earnings increase in the pension credit guarantee underlines the continuing commitment to tackling pensioner poverty by a Government who have already taken 900,000 pensioners out of relative poverty and 1.9 million out of absolute poverty since 1998-99. In fact, the Government have spent around £100 billion more on pensioners since 1997 than we would have if we had simply allowed the policies of the previous
Government to continue unchanged. While there is always more to do, we have finally broken the link between older age and poverty.
The action that we have taken shows that returning to growth and pre-recession levels of employment will be the Government's first priority. That is why the recent employment White Paper, "Building Britain's Recovery: Achieving Full Employment" outlined the increasing support we will give to help those who have lost their jobs in the downturn to get back to work as soon as possible. It includes the young person's guarantee, which provides that all 18 to 24-year-olds still unemployed after six months are guaranteed access to a job, training or work experience, supported by more time with their personal adviser. It also shows our commitment to supporting older workers by providing more training to Jobcentre Plus advisers and access to specialist support from external providers to address older workers' specific needs. Our long-term vision for transforming Jobcentre Plus services will benefit all our users. As part of this, we will improve online services and set up new pilots to give jobcentres the freedom to deliver more personalised services.
The package of uprating proposals we are debating this evening is worth around £2 billion for 2010-11. It represents significant and worthwhile help to those among the poorest and most vulnerable in society. It provides real help in a challenging year and more help where it is needed most. I commend the order to the House.
9.13 pm
Mr. Nigel Waterson (Eastbourne) (Con): Conservative Members naturally welcome any benefits' uprating so far as it goes and no matter how unfairly distributed. We want to see extra help going to our hard-pressed constituents at this difficult time. As a nation, we are barely beginning to climb out of the recession made in Downing street. The latest gross domestic product figures per head show that practically every family in this country is worse off in real terms than they were in 2005. What a dismal record. Many are much worse off, as the figures for pensioner and child poverty grimly demonstrate.
The details of the uprating regulations show just how complex the benefit system has become, with different rates for various upratings, the retail prices index, the Rossi index and so on. No wonder so few people really understand the benefits system in all its complexity.
All this must be seen against a background of more than 5 million people on out-of-work benefits, many of whom would very much like to be in work. The Minister mentioned unemployment, which is high. About 2.5 million people are unemployed, and, according to the Secretary of State, the figure is set to rise again by the summer. There is also the stain of rising youth unemployment. It currently stands at about three quarters of a million; and there are more than 1 million NEETs-young people who are not in education, employment or training. We face the prospect of a whole generation of young people who may never be able to find productive employment.
We, of course, have our own plans to get Britain working again. We plan to provide support for the 2.6 million claiming incapacity benefit, to abolish the Treasury rule
that prevents the Government from paying welfare-to-work providers using the benefits saved once someone has a job, to offer more support to the young unemployed by referring them to work programmes after six months of unemployment rather than a year-the period specified in the Government's flexible new deal-and to pay providers according to results, with a focus on truly sustainable outcomes.
One of the features of this uprating is that it is shot through with some deeply cynical decisions. For example, the Minister referred to a 1.5 per cent. increase in child benefit, disability living allowance, carers allowance and incapacity benefit. However, as no funds will be provided next year, that amounts to a crude pre-election bribe for one year only, followed by a real-terms cut. If the Minister disagrees with that, I shall be happy to give way to her so that she can deny it in toto.
Angela Eagle: Perhaps the hon. Gentleman would explain why he thinks that making a 1.5 per cent. payment available now, a year before it would otherwise have been due, constitutes a cut.
Mr. Waterson: It constitutes a cut because, according to the Government's own figures in the pre-Budget report, the money will not be available next year. If the Minister does not believe me, perhaps she will listen to the Institute for Fiscal Studies, which has said
"the 1.5 per cent. rise... is set to be only temporary, as the Chancellor committed himself-or rather, his successor-to increase these same benefits by 1.5 per cent. less than inflation this time next year."
Angela Eagle: I fail to understand why the Opposition think that bringing an increase-or half of it, say-forward for a year, and paying it for a year, can turn out to be a cut. It means that people will receive an increase that they would have received anyway-or part of that increase-a year in advance, when they need it most. How, according to any lexicon, can that be portrayed as a cut?
Mr. Waterson: I have to tell the Minister that, in the real world out there, people will see it as a cut. Having received 1.5 per cent. this year, they will not receive it next year; in fact, they will receive 1.5 per cent. less. We think that that was a deeply cynical move by a discredited Government on their last legs.
It gets worse. Let us consider the Government's treatment of pensioners. With a great fanfare, the Chancellor announced in the pre-Budget report that despite the RPI figures then applying, there would be a 2.5 per cent. rise in the state pension. As always with this Government, however, it pays to read the small print. Following the PBR, it was revealed-by the Minister herself, I believe-that the rise would not actually apply to many pensioners' real incomes. As Age Concern and Help the Aged-or Age UK, as we must get used to calling them-said in their briefing for the debate,
"While we are pleased that the basic pension will increase by 2.5 per cent., most people see their state pension as a single entitlement and do not distinguish between the different parts."
The hon. Member for Stroud (Mr. Drew) made that point a moment ago. The briefing continues:
"Since the pre-Budget report we have been receiving complaints from people who will be affected by this decision and the numbers are increasing as more people become aware that the commitment to uprate the state pension only applies to the basic pension."
Angela Eagle: In respect of the 2009 pre-Budget report, it was stated:
"The 2009 Pre-Budget Report announces further Government action to provide support for households during the early stages of economic recovery, including increasing the basic State Pension by 2.5 per cent.".
Mr. Waterson: The hon. Lady obviously missed her vocation; she should have been a lawyer. [Interruption.] I am sorry, that is her sister-the Minister of State, Ministry of Justice, the hon. Member for Liverpool, Garston (Maria Eagle)-so it is obviously in the genes. However, as the hon. Member for Stroud said, people do not make the distinction that has been alluded to. Instead, they look at their total state pension income, and many of them have been taken by surprise. All the Minister need do is take into account what Age Concern and Help the Aged have to say, or listen to programmes such as "Money Box Live", in order to know the depth of the anger, frustration and disappointment felt by many pensioners on learning that they have been cynically cheated of part of the increase they had expected to receive.
While I am reading quotes from Age Concern and Help the Aged, may I make another point, which is of relevance to the intervention from the hon. Member for Northavon (Steve Webb)? Those organisations go on to say that
"although the RPI was negative in September 2009 older people who contact us say they have not noticed any reductions in their everyday bills. This is unsurprising given a major contributing factor to the fall in the RPI was a reduction in mortgage interest payments which has no impact on the spending of most retired people."
I endorse that pertinent comment on the application of different inflation rates to pensions increases. Yet again, this year, like every other year, this Government ducked a decision on linking the state pension with earnings. As Mr. Andrew Harrop, head of policy at Age Concern and Help the Aged, said:
"The Government has missed a golden opportunity to promise to restore the link between Basic State Pension and earnings by 2012. Sliding beyond this date will plunge an additional 70,000 pensioners into poverty, saving relatively little for the Government-an estimated £250 million a year after 2012."
Steve Webb: The Leader of the Opposition said in his speech at the weekend that the Conservatives would pay for the earnings link by raising the pension age for men in 2016. One might have read that to mean that the Government-in-waiting-the Conservative party-will not restore the earnings link until 2016. Is that a correct understanding of what he said?
Angela Eagle: Will the hon. Gentleman at least admit that we have actually increased the basic state pension and pensions overall by above the increase in earnings this year, as the rise in earnings is lower than 2.5 per cent., so the earnings link this year would have been less generous than the increase we are debating tonight?
Mr. Waterson:
Well, that is an interesting intervention on two levels, is it not? First, it is an Alice in Wonderland intervention because the Minister seems to be trying to take credit for the fact that, as a result of Government
policies, the bombed-out economy has meant that earnings have contracted not increased, thus, somehow the Government are being more generous to pensioners. She will not be allowed to get away with that. Secondly, is it not part of Labour party mythology that the wicked Tories broke the earnings link in 1980? Surely she would recognise that there have been any number of years between then and now when precisely what she said just now applied. She really cannot have it both ways.
I am nervous about carrying on with my speech because I am afraid that the Under-Secretary of State for Work and Pensions, the hon. Member for Bishop Auckland (Helen Goodman), will have a coronary if I do, given that she is laughing so hard at all this. Perhaps I can provide her with some sobering thoughts and statistics in a moment, but I return now to the matter of restoring the link. When do the Government propose to redeem that pledge? When will they give a straight answer to that question? I am sure that this debate will contain any number of worthy speeches by Government Back Benchers saying, "The wicked Tories broke the link in 1980." This Government have had 13 years to do something about it, but they have done absolutely nothing; all they have done is pass legislation that gives them the power to restore the link, but since then they have done nothing, So I am not going to take any lectures from Labour Members about restoring the link.
As the hon. Member for Northavon mentioned my right hon. Friend the Member for Witney (Mr. Cameron), may I remind him of what our leader said at our party conference? On restoring the link, he said:
"let's be the party that finally makes it happen."
Amen to that. May I also ask why there was no extra Christmas bonus this year? Perhaps someone could deal with that.
The Minister for Pensions and the Ageing Society will recall, as she participated in the debate, that only last week we discussed pensioner poverty. Even on the Government's figures, some 2.5 million pensioners are living in official poverty. Some 64 per cent. of pensioner households are dependent on state benefits for at least one half of their income-that is a staggering statistic. This Government's stewardship has been marked by, among other things, failed attempts to tackle the low take-up of means-tested benefits. Some 1.8 million people do not claim the pension credit to which they are entitled. Some £5.4 billion in benefits goes unclaimed by pensioners each year; the money just stays in the Chancellor's pocket, and that is tragic. Fuel poverty is bad and getting worse. Help the Aged estimates that up to 50,000 pensioners die needlessly because of the cold every year.
Something else that was mentioned in last week's debate and is deserving of repetition is council tax benefit. Of all the means-tested benefits it has the worst record for claims by pensioners. A well-run campaign by the Royal British Legion, supported by my right hon. Friend the Member for Witney-I believe that in the end it had cross-party support-aimed simply to change the name from "council tax benefit" to "council tax rebate". It did so because the evidence shows that only 55 to 61 per cent. of all pensioners who qualify for the benefit get round to making a claim. That means
that about £1.5 billion of the benefit is left unclaimed every year. Research carried out by ComRes on behalf of the Royal British Legion has found that more than two thirds of the public believe that
"some people are ashamed to claim Council Tax Benefit, even if they are entitled to it".
An Ipsos MORI survey conducted on behalf of the Legion found that 56 per cent. of respondents believed that eligible veterans would be more likely to claim council tax benefit if it were known as a rebate rather than a benefit. Eventually, a deafening chorus of calls for that change to be made came from organisations including the House of Lords and, I think, the Select Committee. As I say, it is a very small change that could put a great deal of extra cash into the pockets of needy pensioners-cash to which they are already entitled.
Amendments for that purpose were tabled when the Welfare Reform Bill was considered in another place, but an amendment requiring the change to be made within a set time frame was withdrawn on the basis of assurances from the Minister that the Government would definitely make the change. In language that is unusually strong for the Royal British Legion, it states:
"The Legion is extremely disappointed that, three months on, its good faith seems to have been taken for granted."
The Government are saying-the Minister said it last week and she will no doubt say it this week-that they are consulting local councils about the proposal because there are 381 of them, or something like it, and making this one-word change requires a huge IT effort on their part. I do not think that that is good enough.
Let me come on to another issue: the delays in implementing personal accounts, or NEST-the National Employment Savings Trust-as we have to get used to calling them. A series of substantial delays have been announced in recent weeks and months, meaning that some of the Turner report's target audience-medium and low-income workers who do not have any provision from their workplace for their retirement-might have to wait until 2017 until they are fully enrolled and receiving all the contributions under that scheme.
Lest anyone thinks that this is simply a matter of the time that it takes to implement the scheme, the Government eventually produced the figure that they were "saving" £2.4 billion as a result of the delays. That is £2.4 billion stripped out of pension savings in the future for low and middle-income earners in this country. Of course, that comes on top of the £100 billion-plus raid on pension funds-one of the first acts of this Government back in 1997-and the 100,000 defined benefit schemes that have been wound up since 1997.
To coin a phrase, we simply cannot go on like this. Despite our criticisms and misgivings, I shall not be inviting my right hon. and hon. Friends to vote against this order tonight. To do so would only deprive millions of vulnerable people-pensioners, people with disabilities, struggling families-of the extra help that they need and deserve. What sort of people would deny such help?
Angela Eagle: Liberal Democrats!
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