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Earl Russell: My Lords, I should like to begin by thanking the Minister for making available to us the Explanatory Memorandum provided for the Joint Committee on Statutory Instruments. While I am on the subject, I should also like to thank the Minister for the Explanatory Memorandum that accompanies the affirmative instrument under the Social Security Administration (Fraud) Act 1997, which is a welcome innovation. It is the sort of document that comes out of a well-run department.
On hospital downrating, I wish to join my noble friend Lady Barker in the welcome that she warmly extended to it on the previous occasion. I take the Minister's point about the commencement date of the
Act. However, our amendment contained no proposal to change that date. I do not know whether the Minister was aware at that time of the outturn of the National Insurance Fund for the year just completed, but I certainly was not aware of it. That outturn shows an excess over the Government Actuary's forecast of 2.5 billion in one year, which is a fair amount of money. It is a situation in which the Government could afford, if they chose ex gratia, to have anticipated the date contained in the legislation. I share the regret of my honourable friend Mr Webb that they did not choose to do so. However, that does not in any way diminish my gratitude for what they have done about the downrating from 2003.On FRS17, I must declare an interest as one who is due to retire within the year on a final salary scheme. For that reason I shall say only that I very much share the curiosity of the noble Lord, Lord Higgins, about what exactly is going on and why. If the Minister is able to enlighten us further on that subject, I shall be grateful.
One omission from this uprating statement—I know that it is not normally uprated but it might be a good idea if it were included in mandatory uprating—is the Government's winter fuel payments. It is not my business to teach the Government how to win votes, but I can tell them in retrospect that in the Romsey by-election the winter fuel payment, rather than an increase in the basic pension, would have shifted far fewer votes out of the Government's column if it had been covered by mandatory uprating, as is the basic pension. It is a point that I had made to me on the doorstep on a large number of occasions. It is one that the Government might have found worth listening to.
I must on the other hand welcome the increase in the statutory maternity payments above inflation and the increase in the earnings limits of the ILA. I am sorry though that nothing is done to narrow the gap between the levels of income support for the over and the under 25s. Of course a long succession of percentage changes has the effect of making the numerical gap even wider than it was before. That is a matter which I must confess I regret.
By general convention, this debate is treated as an opportunity for a general discussion of the state of the field of social security. I have decided that I shall not do it that way this time. The Minister knows my general views about the Government's basic principles and approach to social security. I know her views on those views. In fact, I reckon that we could both repeat that debate in our sleep. So I shall not do it, except to refer to a small amount of new material that has become available since last we discussed the matter.
One is always tempted, in going over orders such as this, to pick out some often unexpected fact and demand an explanation of it—for example, the cases where the invalid care allowance is arranged by the Secretary of State to be paid on a Wednesday. I shall not do that because, as the Minister illustrated just now, she is perfectly capable of dealing with any such queries. In the memorable words of Dame Helen Gardiner in the Lady Chatterley trial:
- "You wouldn't want me to explain that. I could".
However, I want to raise the question of the National Audit Office report on the New Deal for Young People. I was a little disconcerned to hear the Minister repeat, yet again, that over 200,000 people had found work because of the New Deal. The National Audit Office, in paragraph 8 of the report, states:
- "But the economic impact of the programme cannot be measured simply in terms of the number of young people placed into jobs. For example, many of them would have found a job anyway because of natural labour market turnover and the general expansion of the economy".
Any increase is welcome. But these are figures of a very different order from the ones which the Government have been quoting and from the one the Minister quoted tonight. I should be glad to know whether the discrepancy is because the Government have not yet taken the report on board or because they disagree with the report. If they disagree with the report, for precisely what reason do they?
The report also draws attention—as my party has done for quite a long time—to the number of people leaving the New Deal to no known destination. It says that it is about a further 30 per cent of leavers from the programme.
The Minister will undoubtedly reply with the information which the report has at paragraph 2.13. It states:
- "Research commissioned by the Employment Service suggests that 56 per cent of these people had in fact entered employment, including sustained employment".
I should like to know more about the research which is there referred to. I appreciate that I have not given the Minister notice of this point and she will not have it at her fingertips tonight; although one never knows with the Minister, she always might. But if on some occasion or other I were able to see some of this research and see what it contains I should be extremely interested.
That raises the more general question of whether the Government have placed comparatively too much emphasis on the New Deal and too little on the job of sustaining benefit levels. The campaign for food poverty is coming up with fairly considerable bodies of evidence of people who are actually short of food. Malnutrition among those admitted to hospital has been a matter of general concern since the noble Baroness, Lady Cumberlege, was Minister. It remains so.
One should also take account of the fact that in purchase of food many people on benefit are paying prices which are greater than the indices would indicate; especially those who are not able to walk to the nearest supermarket and do not possess a car. The cost of food to those who do not possess a car is, in real terms, a good deal higher than the cost of food to those who do. If one lives either in remote rural Wales or on the 21st floor of a council flat where the lifts have been out of action for six weeks—that is an actual example from the ward next door to my own—then one's shopping is very much restricted to what is in the immediate neighbourhood.
Deterioration of health as a result of malnutrition does not increase employablity. We do not have any research on minimum income levels necessary to sustain good health. My party has called for such research on many occasions. I should like to take this as one more occasion on which to do so.
Baroness Greengross: My Lords, first, I express my thanks to the Minister for her announcement in response to my amendment to the State Pension Credit Bill about the hospital downrating rule. I am sorry that I was not able to be in the House last week to hear the announcement.
Obviously, it was high time that that rule was reviewed. It had been in existence for 54 years without any real change. Thirteen weeks is a much better cut off point than six weeks. Obviously, my former colleagues at Age Concern will be looking carefully at the operation of the rule on those still affected and would have much preferred a cut off at 26 weeks or six months rather than 13 weeks. But I am pleased that only 9,000 people will now be affected. I share many of the other concerns eloquently expressed by the noble Earl, Lord Russell, and the noble Lord, Lord Higgins.
I want only to mention a couple of points. As to when the change is introduced in autumn of 2003, while understanding absolutely the reasons for that, as explained by the Minister, we have to remember that if one is very old, then time is of the essence. That is quite a long time to wait. The Government have said on many occasions that they are firmly committed to the state pension forming the foundation of pensioner incomes. I am pleased that it will be increased above inflation this year. But people now need and demand a lot of information that they have not yet received. It would be most helpful if, through research, we had a real estimate of pensioners' budget needs. We have never really had that; we have had to depend on the voluntary sector to make the sort of estimates that the family expenditure survey—the shopping basket assessment of need—does not achieve for older people, whose priorities are quite different from those of families with young children. I wish that we had a pensioners' budget assessment every year, which would give us a good indication of what is needed.
Turning to other issues, I very much welcome the improvements to maternity benefit and the incomes of people trying hard to balance family life and work. Those employers that are family friendly need encouragement. That is an important step in our
changing society. Our ageing demography does not mean that those with families and young people are unaffected. I very much welcome efforts to tackle child poverty and discrimination against people with disabilities, especially disabled children, and to help those families included in the Sure Start initiative, to which I am personally committed.8.15 p.m.
Baroness Hollis of Heigham: My Lords, I shall do my best to answer your Lordships' questions. If there are questions that I am unable to answer because of a lack of precise information or that I simply overlook, I hope that your Lordships will forgive me and I shall certainly do my best to respond in writing.
I turn first to the comments, questions, propositions, assertions or, on a good day, statements made by the noble Lord, Lord Higgins. He began by asking whether, because we were stating that as unemployment was down, pensions were going up, the reverse was also the case. In other words, were the two tied? He knows perfectly well that that is not the case. State pensions are paid from general taxation, although attributed to the National Insurance Fund, on a pay-as-you-go system, as are unemployment payments.
The substantive point being made by my right honourable friend the Secretary of State—certainly the point that I would wish to make—is that it is precisely the prudent management of the economy—I know that the noble Lord will wince at those words—and the resulting reduction in unemployment that allows us to ensure that pensioner incomes, including state provision of pensions incomes, have since 1997 not merely increased by inflation but have kept pace with the overall incomes and earnings in this country, which of course have increased in excess of the retail prices index. Whether the noble Lord chooses to track that in the statistics for households with below average incomes, or whatever, I am sure that he will accept my assertion. That is the point: there is head space, given growth, for the Government to be more generous in a redistributive sense than might otherwise have been the case.
I turn to the noble Lord's second point about hospital downrating. I was delighted to see the noble Baroness, Lady Greengross, present to welcome the orders. I apologise if any noble Lord misunderstood anything about the timing. The reason for the timing is that it is associated with the introduction of pension credit and the information technology systems being developed for that. Therefore, the change from the six-week to the 13-week rule will be part of that package. Noble Lords will recall that we started by talking about the savings element of pension credit being protected from hospital downrating. That was in the original IT package. That was extended according to the timetable; that is why it is associated with the October introduction.
The noble Lord asked me whether the elements within that were reviewed in uprating terms. The process is not like a family budget assessment. We do
not work out individual lines. Pensioners, or anyone else in hospital, will have very different patterns of expenditure according to their housing situation, whether they run a car, what are their month-by-month overheads, and the like.We have never tied hospital downrating to explicit expenditure. As the noble Lord will know, as a general principle we have said that we do not believe that the state should be paying twice for the same contingency. We therefore currently introduce a modest reduction after six weeks, but in future it will be after 13 weeks, and a much fuller reduction after 52 weeks. As far as I am aware, the percentage reduction has remained fairly constant over the years, including under the previous administration. But I will check to see whether it has changed considerably. It is a percentage reduction, which therefore varies according to the total level of retirement pension. If retirement pension changes, so must the amount being deducted from it.
That has never been attached to individual assessments of income. There may at some point be a statement to be made; there may be a change in policy on capital limits, or whatever. But that has never been done in the way that the noble Lord suggests.
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