The
Committee consisted of the following
Members:
Chair:
Mr
Peter Bone
†
Baldwin,
Harriett (West Worcestershire)
(Con)
†
Baron,
Mr John (Basildon and Billericay)
(Con)
†
Barwell,
Gavin (Croydon Central)
(Con)
†
Beresford,
Sir Paul (Mole Valley)
(Con)
†
Berry,
Jake (Rossendale and Darwen)
(Con)
†
Boles,
Nick (Grantham and Stamford)
(Con)
†
Curran,
Margaret (Glasgow East)
(Lab)
†
Docherty,
Thomas (Dunfermline and West Fife)
(Lab)
†
Eagle,
Ms Angela (Wallasey)
(Lab)
†
Hemming,
John (Birmingham, Yardley)
(LD)
Hendrick,
Mark (Preston)
(Lab/Co-op)
†
Hodgson,
Mrs Sharon (Washington and Sunderland West)
(Lab)
Paisley,
Ian (North Antrim)
(DUP)
†
Phillipson,
Bridget (Houghton and Sunderland South)
(Lab)
†
Selous,
Andrew (South West Bedfordshire)
(Con)
†
Shuker,
Gavin (Luton South)
(Lab/Co-op)
†
Smith,
Miss Chloe (Norwich North)
(Con)
†
Webb,
Steve (Minister of State, Department for Work and
Pensions)
Mark Etherton,
Committee Clerk
† attended
the Committee
Third
Delegated Legislation
Committee
Wednesday
7 July
2010
[Mr
Peter Bone
in the
Chair]
Draft
State Pension Credit Pilot Scheme Regulations
2010
2.30
pm
The
Minister of State, Department for Work and Pensions (Steve
Webb):
I beg to
move,
That
the Committee has considered the draft State Pension Credit Pilot
Scheme Regulations
2010.
It
is a pleasure to serve under your chairmanship this afternoon, Mr Bone.
It is the first time that I have had that privilege and my first formal
occasion to put on the public record my appreciation of my predecessor,
the hon. Member for Wallasey. We have changed places, as it were.
[
Interruption.
] It is a good job I did not hear
that. We took part in many exchanges in Committee over the years, and I
always felt that she treated Committees with respect. She was briefed
thoroughly and sought to answer the occasionally impertinent questions
that were asked by Opposition Members. I pay tribute to her work as
Minister of State for Pensions and the Ageing
Society.
As
the Committee will know, pension credit is paid to pensioners on the
lowest incomes. It provides additional support to those who need it
most and it is one of our key tools to combat pensioner poverty. It
means that no single pensioner need live on less than £132.60 a
week or a couple on less than £202.40. Those with severe
disabilities, caring responsibilities or qualified housing costs may be
entitled to more. Following the introduction of pension credit in 2003,
take-up rose quickly to 2.7 million households. Since then,
it has stagnated and remains at about 2.7 million today. It was right,
therefore, that in 2008 the then Secretary of State, the right hon.
James Purnell, asked his officials to look for innovative methods to
make the most of the considerable data the Government already held in
ways that could improve the take-up of pension credit. The result of
that was a study to look at how to increase take-up by making better
use of the information, and the draft regulations will enable that
study to go
ahead.
As
with other social security benefits, to receive pension credit people
first have to submit a claim. As I have said, 2.7 million households or
3.3 million individuals currently do so. We estimate that at least 1
million pensioners who are eligible for extra support do not claim it
and do not receive the extra help to which they are entitled and need.
There are many reasons for that: some pensioners think that they are
not entitled to it, perhaps because they have modest savings or their
own home; others might not want to go through the process of
means-testing and some might be baffled by the complexity of the whole
thing. Although pension credit can be claimed with one relatively
simple telephone call, I am sure that it does not surprise members of
the Committee, who are also constituency Members of Parliament, that
many older people are sufficiently bewildered by the whole system that
they do not claim what they are entitled to claim.
We need to
explore new approaches to making sure that pensioners receive the help
they need, while also ensuring that taxpayers’ money is properly
targeted. We will use data already held by the Department for Work and
Pensions to identify a pool of pensioners who do not currently receive
pension credit, but who we believe might be entitled to it. From that
pool, 2,000 pensioners resident in Great Britain will be selected at
random to take part in the study. Further details on how we will select
those pensioners are set out in regulations 6 to 9. We shall exclude
pensioners who have already said that they do not want further contact
from the Department for Work and Pensions. We will contact participants
by letter to let them know the details of the study. We will then pay
them our best estimate of the level of pension credit to which they are
entitled, as set out in regulations 15 to 21, for a fixed
period of 12
weeks.
The
calculation of the payments will be based on the information we already
hold and, crucially, without the need for a claim. The pensioners will
be contacted again by letter to encourage them to submit a pension
credit claim before the end of the 12-week period. They will have
access to a dedicated telephone number throughout the study for further
information. The period of 12 weeks, together with the
modest number of participants in the study, balances the burden on the
taxpayer on the one hand with the need to produce meaningful results on
the other. After that stage of the study, we will first carry out a
statistical analysis of its outcomes. That will tell us things such as
how many participants went on to make a pension credit claim and how
much they were entitled to receive. There will also be a qualitative
analysis of the motivations of the participants who went on to make a
claim and those who did not. Importantly, the study will also give us
reactions to how people feel about their personal data—that is
what we are talking about here—being used in new
ways.
To
be clear, the information that we will use is data already collected by
Her Majesty’s Revenue and Customs and the DWP. Such information
is already routinely used for purposes such as targeted mailing and
investigating cases of fraud and error. However, we are aware
of the sensitivities around using individuals’ data,
and the research study will give us a chance to see how participants
feel.
We
will have preliminary findings by summer 2011 and a full report in
2012. We are not talking about preparing for a fully automated pension
credit payment system, but we will learn about both pension credit and
other means-tested benefits, so what we learn will be of much broader
application. After the study, we will have new evidence about how
information that Government already hold can be used more effectively.
In particular, we will know how that data can be used in more
innovative ways—the key to the study—to increase benefit
take-up. The regulations enable us to undertake that innovative study.
They allow us to identify potential participants, to calculate the
amount of pension credit that they will receive during the study and to
set out the manner of making subsequent
payments.
I
know you are an eagle-eyed Chair of Committees, Mr Bone, and you will
have spotted the typographical error on the front cover of the draft
regulations. In case other members of the Committee have not done so,
it
says:
“Coming
into force in accordance with regulation 2(2)”,
but, as I obviously
spotted immediately, it should say “1(2)”. I apologise,
but we will correct that before the final version enters into
law.
The
development of the draft regulations has involved the ongoing input of
a number of stakeholders, in particular the helpful support of Age UK,
which is keen on the idea of automatic payment. We are grateful for its
continuing input into the study. I would like to express my
appreciation of all those who have been involved in getting the draft
regulations to this stage, including the hon. Member for Wallasey, and
I commend them to the
Committee.
2.37
pm
Ms
Angela Eagle (Wallasey) (Lab):
It is a pleasure
to serve on my first Committee with you in the Chair, Mr Bone.
Uncharacteristically, you are watching over our proceedings rather than
actively participating in them—something we are far more used
to.
I
welcome the Minister to his position on the first occasion that we have
had a chance to debate in the new Parliament. I am in rather an odd
position, because a close look at the draft regulations will reveal
that I am the Minister who first promulgated them, who did all the work
to bring them about and who states that I think that they are
compatible with human rights legislation. This peculiar interregnum
will only last so long, but no one would expect me to make a huge,
thundering speech today against the draft regulations. I support them
and did a lot of work to bring them about. My only disappointment is
that we did not manage to get the draft regulations through the various
phases of pre-presentation scrutiny that we have for social security
legislation in time for the House to debate them before Dissolution,
which has given us this unusual and hybrid experience in Committee. We
are all singing from the same song sheet. I have some questions,
however, in particular about the changed context in which the pilot
will take place. I shall then ask the Minister for some updates on some
of the detail of the
legislation.
The
Minister is right to point out that there is a problem with the take-up
of pension credit, as there is with the connected benefits. He was
perhaps too eager to get away from the Committee to talk about some of
them, but he knows as well as I do that they include housing benefit
and council tax benefit, which often accompany—sometimes pretty
automatically—the award of pension credit. In 2008, the then
Secretary of State, my former colleague James Purnell, set in train a
process to see whether we could change the way in which benefits are
applied for and granted, to deal with the perennial problem with
take-up of means-tested benefits.
The
regulations are a novel piece of secondary legislation, representing
perhaps the first time that social security legislation has attempted
to allow the award of benefits without a claim first being made. When
we were preparing the regulations in the previous Government, they were
the cause of much interesting debate, if I can put it that way, between
the Department for Work and Pensions and Her Majesty’s Treasury.
Without giving away any terrible secrets, I can say that there is a
great deal of worry in HM Treasury about the breach of that fundamental
aspect of the benefits system. At present, although one has a
theoretical entitlement to benefits, especially means-tested benefits,
if one’s circumstances
accord exactly with what the regulations provide, up until the very
moment when this statutory instrument becomes law, one is not actually
entitled unless one makes a claim. The regulations are therefore
novel.
I can tell
the Minister—he probably already knows—that some in Her
Majesty’s Treasury are very worried about the extent of the
implications of that breach of a fundamental principle of social
security legislation, particularly for annually managed expenditure. I
spent quite a bit of time questioning my officials because I was
worried about it, but I was trying to come at the long-standing problem
of means-tested benefits take-up, and the battle against the poverty
that is implied by the lack of take-up, from a different
direction.
If we look at
the take-up figures, we see issues that still need to be tackled.
Although some welcome progress was made while we were in government,
there is still some way to go. It is estimated that between 61% and 70%
of the pension credit benefit is taken up. In the worst-case scenario,
that leaves a large and alarming percentage of pensioners who have
decided not to claim that benefit, although something that gave me
comfort when I was the Minister was the fact that the older and,
therefore, the poorer the eligible pensioners were, the higher the
take-up rate. It went up by about 10% among the over-70s. However, that
still left a range of between 10% and 20% of very elderly pensioners
who were not accessing the benefits to which Parliament had said they
were entitled.
The novel
approach set out in the regulations was born out of many years of
trying to make it easier for pensioners to claim benefits. When we were
in government, a great deal of good work was done to ensure that there
was a simplified claims process. When the benefit was first introduced,
it was a sort of annexe to income support and the means-tested parts of
income support before the introduction of what was then the minimum
income guarantee, which subsequently evolved into pension credit. We
had to get away from the 40-page application forms that sometimes asked
elderly pensioners whether they were pregnant—although that may
even be possible in these days of rampaging scientific advance. We had
to get away from those kinds of questions, which were perhaps logical
in the benefits area, but bizarre and peculiar as far as the people
trying to engage with the system were concerned.
There has
been a great deal of progress, which I hope the Minister will
acknowledge, in making the process of claiming pension credit much
easier. He made passing reference, for example, to the pension credit
helpline and the fact that access to the benefits was made much easier
by the introduction of pensioner helplines and fit-for-purpose IT. That
does not sound revolutionary, but it enabled people who were trying to
help pensioners making inquiries to see, by interrogating the system,
the circumstance of those individuals. Great strides were made in our
time in government to equip the DWP with the technical capacity,
computers and information needed to enable more modern approaches to be
taken. We moved from very old computers with unusable green screens to
a much higher digitally interactive capacity during our time in
government by investing in the capacity of the Department to serve its
clients. The regulations before us will take that a step further, using
data matching and automatic approaches and some of the building blocks
that we left in place.
Will the
Minister say something about how the pilot will be supported by the
Department’s infrastructure? I know that the pilot is a
time-limited little test, lasting only 12 weeks. It will, as he made
clear, involve 2,000 people who may qualify for pension credit
payments, randomly chosen by data matching. Those objective data are
held, I think, by the Department and HMRC, unless there has been a
change since I was dealing with the regulations.
Experience
shows that take-up campaigns cannot be just an automatic kind of thing;
they must be supported by capacity, access and availability of
information when people contact the system—the
Department—to find out why the payments have suddenly appeared
in their bank account without their requesting them. What can the
Minister say about the support that will be available during the pilot
scheme? Initially that will be for the 2,000 people who may suddenly
find money unexpectedly popping up in their bank accounts. Some might
not even notice it; others may be pleasantly surprised, but not know
where the money has come from and want to ask why it has been given to
them.
When
the Minister is looking at the results of the pilot, it will be
important, if he is thinking about whether the scheme offers a way
forward in general, to assess the costs of the support needed to assure
people who get automatic payments that the payments are above board and
appropriate and that they should not worry, and to enable those people,
if they suddenly realise that having access to pension credit is rather
a good thing—giving them £50 or £60 a week, on
average, and more in some areas of the country—to gather
information so that, if they wish, they can make a claim after the
period of automatic access to payment has ended. All that implies the
need for greater ability to contact “the system” and get
back communications that make sense to the client
group—pensioners of various ages, or sometimes their carers.
What arrangements has he put in place to ensure that that kind of
access is present for the pilot and, more important, in other areas, in
the event of a decision to extend automatic access to other
means-tested
benefits?
I
hope the Minister agrees with me that the local service, for which the
Pensions, Disability and Carers Service in his Department is currently
responsible, does a fantastic job in outreach—contacting often
vulnerable and elderly pensioners about their benefit entitlements.
Unless something has changed in the past few weeks, they make 13,000
visits to people’s homes week in, week out. It is an important
part of access to the DWP’s systems and is valued by many
stakeholders and those who participated in the consultations before the
draft regulations were drawn
up.
What
work will the Minister do and what conclusions will he seek in relation
to the local service, to ensure that automaticity and some of the
questions raised—particularly ongoing issues—can be dealt
with properly after the trial pension credit award period ends, after
13 weeks? It is also important to look at how the pension credit
helpline is staffed. It receives 24,000 calls a day, which is not
surprising, given that we are talking about well over 3 million
recipients of credit and perhaps another 1.5 million who do
not claim. Those are big numbers. Access to
information has to be accompanied by access to people’s national
insurance records, if they are asking specific questions, so that they
can be processed by the system.
Has the
Minister also thought about the annually managed expenditure and the
departmental expenditure limit implications of the draft regulations?
The context has changed quite drastically since the election. There
were announcements in the Budget not only about cuts to the real value
of many benefits because of the move from the retail prices index to
the consumer prices index, which will save £6 billion over the
next five years, but about the huge cuts to the departmental
expenditure limits, which will be announced in the spending review on
20 October. There are also the annually managed expenditures. The hon.
Gentleman has the great privilege in his current job of having a
ringside seat for a high percentage of the annually managed expenditure
that is our welfare
system.
People often
go on about the size of our welfare bills. With respect to the
DWP’s annually managed expenditures, they very rarely say that
more than half of what is spent each week goes on pensioners. They
prefer to concentrate on other less popular welfare and benefits
recipients. Nevertheless, the implications for the Treasury of having
automatic access to these means-tested benefits will be a huge increase
in annually managed expenditure. Because of the access to support, help
and information that has to come with automatic payments, there is also
an implication for departmental expenditure limits. People have to be
available on the end of the phone with IT advice in order to deal with
the queries and inquiries that automatic payments are bound to raise.
People in those areas of the private sector that have automated many of
their services and use a lot of digital services and telephony always
say that as soon as another approach or way into the system is opened
up, all the other access paths to information have to remain available
because people will use all of them to try to discover what is going
on, what their rights are and whether the payments they have received
are okay.
Those are
important questions. I would not like to think that this innovative and
welcome piece of legislation—the Minister would expect me to say
that— will be only a little interesting vignette that will be
swept away by the October spending review when the Treasury crosses its
arms and says, “Well, don’t think for a minute that you
will increase your annually managed expenditure by improving the
take-up of benefits and making it higher than it is already. Do you
take us for somebody who has just dropped off a Christmas tree? You
cannot have access to extra funds to deliver increases in annually
managed expenditure when we want cuts, cuts, cuts”. The Minister
will have his work cut out in dealing with the Treasury, which I
suspect has its beady eyes on the vast majority of his budget and the
shrinkage on which it has decided.
I want to
deal with a couple of other points about take-up and the implications
of the pension credit pilot scheme for both housing benefit and council
tax benefit, which are directly connected to pension credit benefit.
The hon. Gentleman used to make many speeches and wring his hands at
the poor take-up of those benefits—particularly council tax
benefit, which he said was a failure of the take-up campaign for
pension credit. He knows that housing benefit take-up for pensioners is
thought to be between 81% and 87%. The take-up for
council tax benefit by pensioners is lower at between 53% and 60%. We
made a change to the system to enable one single claim for all three of
those benefits. Automatic access and an increase in automatic payments
to pension credit has big implications for automatic increases in the
take-up of housing benefit, council tax benefit and all means-tested
benefits for pensioners. That is a good thing if one is trying to deal
with the scourge of pensioner poverty, but an extremely bad thing if
one happens to be sitting in the Treasury—as his right hon.
Friend the Chief Secretary is—attempting to slice vast amounts
of cash off the budget. Will the Minister give us an insight into how
he will deal with that during the spending review? There is an intimate
connection between those three and he cannot pretend that there is not.
There are implications that must be considered if the pilot is to be
anything other than an interesting little story that is swept away in
the spending review. I hope that the Minister will do his best to fight
for it because it offers a way of dealing with the remaining problems
of pensioner poverty that have proved, as he rightly pointed out, to be
very difficult to deal
with.
I
have some specific questions about the scheme. As the pilot was put
together and consulted on I was worried about overpayments. People in
the welfare benefit system have a great deal of experience of receiving
overpayments. That is particularly true for council tax benefit. Often,
for administrative reasons, claimants have not realised that they have
been overpaid. They then have to make repayments when they had not
realised that they had had access to extra money to which they were not
entitled. People who live in constrained circumstances cannot get into
a situation where they might have to make sudden repayments. That makes
them very risk-averse when approaching the system. The Minister will
know about that from his casework, as, I suspect, will every Member of
Parliament. If they have not yet seen any of it, they certainly
will.
How does the
Minister think the fear around overpayments can be dealt with? The
regulations are explicit that no overpayment will be taken back; that
was done at my insistence because of the fear. If this pilot is to go
anywhere and have a presence after the short trial we are discussing
today, we must think about how we can be reassured. The regulations
allow for rounding up. Although that never seems much money at an
individual level, when it is multiplied by 1 million, it comes to a
large amount, and the Treasury would be on the Minister’s back
about that. What is his view on rounding up and the implications for a
wider use of the pilot automatic award regulations, which may later
extend more widely across the benefit
system?
Finally,
I want to ask the Minister how he is getting on. I know there are
issues with the renaming of council tax benefit as council tax rebate.
He was extremely vociferous on the subject when in opposition. It was
something that we all wanted to do, though I spent some time explaining
that it was more complicated than it appeared, as matters of social
security often are. Will he give us an update on where we are with the
council tax rebate, as we would all like to see it happen as soon as
practically possible? Paradoxically, there are 409 different local
authority systems administering a national benefit. The benefit has
been administered at local level since it was introduced by his new
coalition partners all those years ago.
I welcome this
legislation. It is novel and, if it is taken forward, it has huge
implications for how our benefit system will run. I would like to be
reassured that, if the pilot proves successful, he will take it
forward, although I have some doubts, given the AME and DEL
implications. Will the Minister write to me with his assessments of the
AME and DEL implications, first of the pilot itself and, secondly and
more importantly, of any wider roll-out ahead of the spending review?
Will he undertake to keep the Committee in touch with how the pilot is
going, and commit to writing to me once the pilot is over to
share with me—as the Minister when the regulations were
written—the progress and the lessons learned from it? I look
forward to the Minister’s
response.
3.3
pm
Steve
Webb:
I congratulate the hon. Lady on her exhaustive
contribution, recognising that she was on her feet in the Chamber at
1.30 this morning giving her views on the Finance
Bill.
Ms
Eagle:
I can do some more of that
now.
Steve
Webb:
There is a great demand for a repeat performance
and, I am sure, plenty more where that came from, but perhaps I should
address some of the
points.
I
am grateful to the hon. Lady for her support for these regulations. Her
fingerprints—that sounds a pejorative phrase—her
imprimatur and her DNA are on these regulations. I am grateful for her
input in bringing them to this stage. I am pleased to be midwife to her
regulations, bringing them into the world. I had better not proceed
much further with that analogy.
The hon. Lady
asked a number of questions. I was intrigued by her discussions of the
relationship between the Department and the Treasury. It was
fascinating. I understand—indeed, I know from
experience—that we have been working closely with the Treasury
throughout the development of this initiative. The Treasury completely
supports the policy intention and the way in which the regulations
implement it. I can therefore reassure the hon. Lady that the Treasury
is 100% behind us on this. She need not have any fears on that
front.
Ms
Eagle:
Does that mean that the Treasury will continue to
be supportive when it looks at whether the automatic award of benefit
in a very small pilot can be applied to a much larger area of benefit
application? That will have implications for, and increase expenditure
in, AME and
DEL.
Steve
Webb:
I am grateful for that comment, which pre-empts my
response to another of the hon. Lady’s questions. I refer her to
her response last July to a written question by the now Home Secretary,
the right hon. Member for Maidenhead (Mrs
May):
“We
have no current plans to introduce wholesale automatic payments of
pension credit.”—[Official Report, 21 July 2009;
Vol. 496, c.
1316W.]
That
remains the Department’s position. It sails on like a ship of
state and its position has not changed. There are no plans for a
wholesale roll-out with the spending implications that the hon. Lady
describes.
On the
implications for AME and DEL, the hon. Lady knows that the pilot is
wholly contained in the departmental expenditure limit, so the full
costs of less than £1 million are covered by DEL
spending. Notwithstanding, as she said, the exceptionally tight fiscal
position in which she left us, we have managed to persevere with the
pilot—the research study—so we will go ahead with it.
Despite the difficulties in finding the funding I was determined that
we should do that. Beyond that, we want to learn the lessons from it
and see whether they should be applied to pension credit or other
means-tested benefits. The key thing is that the budget for the pilot
has already been allocated and the study will go ahead later in the
year.
I
will be happy to keep the House up to date as the project develops. The
hon. Lady was the scheme’s progenitor—I will not develop
that analogy further—and has been intimately involved in getting
it going and in helping to design it. I will be more than happy to
write to her once the pilot has concluded to let her know how things
are
going.
The
hon. Lady rightly pointed out that the pension credit claims process
has been simplified, and I agree with that. However, regardless of the
simplified claims process, phone lines and better IT, we have a hard
core—an almost irreducible minimum—of a third of
pensioners, many of whom are, almost by definition, living in poverty,
who are not claiming. That is why innovative approaches, such as the
pilot, are needed. I accept that steps were taken and that forms and
claims have been simplified somewhat. However, I visited a pensions
centre recently and listened in on calls from people claiming pension
credit. It is still an excruciatingly complicated benefit, which puts
people off. We therefore need to look at innovative new ways, such as
the research study, to find better ways of ensuring that people take up
the
benefit.
The
hon. Lady asked whether we would write to people before putting money
in their bank accounts—I stress that we will do that. She is
right that people will want to call the dedicated phoneline when they
receive the letter and when the money arrives in their bank account.
That is the specific purpose of the dedicated phoneline. I understand
that approximately 10 staff will handle calls in a pensions centre,
although the demand will fluctuate. I suspect it will peak when the
letters are received and when the bank credits happen. We will ensure
that enough people are in
place.
If
the lessons we learn from the pilot imply a greater use of the
principle of automaticity, it is right that the implications for
support would have to be considered as part of the package. If we
generate demand in that way on a bigger scale in future, the
implications for staffing, as well as public expenditure, would have to
be part of our
appraisal.
Ms
Eagle:
Does the Minister agree that, although the pilot is
an important part of trying to develop a new way—let us call it
the Heineken way—of reaching the parts other things cannot
reach, it is equally important to carry on doing the day job? That
means maintaining the work of local services and their 13,000 visits a
week to pensioners and vulnerable benefit claimants in their own homes.
Moreover, what has happened to the regional
visits that I and my predecessor would make to areas where pension
credit claims were very low to try to increase them? Has he been on any
such visits since becoming Minister? I am sure that he has been busy,
but it would be reassuring to know that they have continued. Can he
tell us
now?
Steve
Webb:
No, I have not—I am keen to give direct and
straight answers. The extent to which such things are a one-off hit or
deal with the structural issues is interesting. One purpose of a pilot
such as this is to get at the structural issues that affect pensioners
of different sorts in different parts of the country—issues that
can be addressed through pension credit and other means-tested
benefits. I welcome and salute the work the hon. Lady did in getting
coverage and appearing in local media to raise awareness, and I am sure
that it was valuable in the areas that she visited. I am keen to see
that, wherever we can, we as a Department tackle the
structural problems in the system, which, I hope, will have a
far more significant impact than I could achieve. I am sure the impact
that the hon. Lady had was far greater than that that I would
have from an individual visit, but it is crucial to look at structures
as well as temporary
publicity.
Ms
Eagle:
If that was all that the visits did, I would agree
with the Minister’s approach, but they led to significant
increases in successful pension credit claims. It was not I who brought
that about, although having a Minister visiting is always newsworthy,
especially for the local media that pensioners read. From our detailed
work, we discovered that peer support and endorsement from people who
were on pension credit and had been through the claims process
reassured non-claimants that that it was doable—there was life
after it and they could receive £50, £60 or £70 a
week more than they received before. It was that peer endorsement,
rather than a Minister appearing in a cape with a big “S”
on the front, that was the positive outcome of the visits. I would be
very worried if the Minister simply said that they were about temporary
publicity, when they were certainly about a lot more than
that.
Steve
Webb:
I am grateful to the hon. Lady; she has obviously
seen my cape with an “S” on
it.
Ms
Eagle:
No, but I will if you want me
to.
Steve
Webb:
It was apparent when I visited the pension centre in
Cwmbran relatively recently that we need to get people into the system
and handle them professionally and efficiently. Staff at pension
centres overwhelmingly deal very professionally and effectively with
people who claim complex benefits such as pension credits. Peer
recommendation is important. I do not know if there have been
appraisals of the long-term impact on take-up of the visits the hon.
Lady made, and I understand why there would be a temporary spike, but I
am interested in long-term increases in take-up, and the lessons we
learn from the pilot will help us to generate that.
I shall deal
with the other questions that the hon. Lady asked in turn. On local
service, I agree that home visits, whether by Pension Service or local
authority staff, should be part of the mix, because there is a set of
recipients and potential recipients to whom a visit is
very important. We need to ensure that people who can access the system
through other means do so, but if home visiting is the best method, it
should be part of the mix.
The previous
Government committed to renaming council tax benefit “council
tax rebate”, inspired by the Royal British Legion and others who
felt that the change would improve take-up. They thought that the
branding was better—that people understood the concept of a
rebate and did not regard it as means-tested. The hon. Lady asked the
question because she knows how difficult that change is to make. The
previous Government committed to doing it and only afterwards
discovered how hard it was. We are still working with local authorities
and their IT suppliers on exactly how it will work. It seems
extraordinary; one would imagine that we could just flick a switch to
change one word, but as she said, there are many hundreds of local
authorities administering the benefits, each with its own literature
and computer system. We have to do this precisely. There is no set date
for achieving the change, as there was no set date a few months ago,
but we are working as hard as we can to deliver on the commitment she
made.
The hon. Lady
asked about rounding up. The draft regulations refer to rounding up
because we are using estimates but, as they make clear, we will use
limited data to estimate what people are entitled to and then round it,
but that is temporary. Once we have triggered a claim for pension
credit, that will be precise to the penny, so rounding will not be a
long-term practice. If the approach being piloted triggers claims, the
resulting payments will be precise. The National Audit Office would
have views if rounding up was an ongoing
practice.
The
hon. Lady asked about the local service. The sort of figures that she
quoted are the latest figures available to me, from 2009, but the
pattern of local services has not changed substantially. I hope I have
covered most of what she asked
about.
Finally,
the hon. Lady raised the question of the context. I will not stray too
far into context, as I am sure you would not allow me to do, Mr Bone.
However, she is right to point out the huge spending pressure on
Departments and she will recognise the shocking scale of debt handed on
by the previous Administration. It would have been nice to have come to
power in 1997—my hon. Friends on the Government Benches will no
doubt agree—when the economy was in good shape and reform was
oiled by multi-billions of spare cash. It makes me feel that we have
had 13 wasted years—I hesitated to use such a cliché, but
it came out anyway—instead of the good social security reform
that could have been achieved with the revenue available to the
previous Administration. That is the context in which we are acting
today.
Ms
Eagle:
Will the Minister give
way?
Steve
Webb:
In a second, although I have nearly
finished.
When the hon.
Lady talks about cuts, that is the context in which we are acting. The
Prime Minister today used the phrase “Labour cuts”, and I
am sure that she would like to identify the cuts she would have
made.
Ms
Eagle:
We had better not get back into the Budget debate,
although I am happy to do so if you will let me, Mr Bone. I have
figures here, in particular about the sneaky little cut in indexation,
changing from the RPI to the CPI, which will save nearly £6
billion in benefits
expenditure.
The
Chair:
Order. I was generous with Ms Eagle and, I think,
overgenerous with the Minister. Can we get back to the draft
regulations?
Ms
Eagle:
I am more than happy to do that, Mr
Bone.
Given
the Minister’s comments about context, is he discussing with the
Treasury the £5 billion of non-claimed benefits resulting from
the take-up percentages that I quoted? If that approach were used,
might it help to deal with some of the remaining hardcore issues of
means-tested benefits not being taken up and the poverty that that
implies?
I
hope that the Minister recognises that we took 2 million
pensioners out of absolute poverty in what he calls 13 wasted years. We
also took 900,000 pensioners out of relative poverty, which is no mean
feat. If his Government can even keep pensioner poverty going down,
rather than allowing it to rise, as I suspect will happen, that will be
helpful.
The
Chair:
Order. As much as I would love to hear that debate,
it is not what we are discussing today. I ask the Minister to stick to
the
regulations.
Steve
Webb:
I feel thwarted, Mr Bone, but I will of course abide
by your
strictures.
In
conclusion, and to lapse back into consensus, we inherited the draft
regulations and are pleased to implement them, so that we can learn
lessons about why people do not claim their means-tested benefits. The
hon. Lady is absolutely right that there are too many older people in
Britain today living in poverty. That is scandalous. We hope that the
small research study enabled by the draft regulations will provide us
with insights we can use to tackle that long-standing
problem.
Question
put and agreed
to.
Resolved,
That
the Committee has considered the draft State Pension Credit Pilot
Scheme Regulations
2010.
3.20
pm
Committee
rose.