Benefits Uprating and Welfare Reform

– in the House of Commons at 3:34 pm on 6 December 2005.

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Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions 3:34, 6 December 2005

With permission, Mr. Speaker, I should like to make a statement on benefits uprating in the context of the Government's continued fight against poverty and our ambitious programme to renew the welfare and pensions systems.

I shall place full details of the uprating in the Vote Office and arrange for the figures to be published in the Official Report. I can confirm that most national insurance benefits will rise by the retail prices index, which is 2.7 per cent., and that most income-related benefits will be uprated by Rossi, at 2.2 per cent.

From next April, retirement pension will go up by £2.20 a week for single pensioners and by £3.55 a week for couples. When we were elected, the pension was just £62.45 for a single person. From April, it will be £84.25 for a single person and £134.75 for couples. That is a real-terms rise of 8 per cent. since 1997. Next year, the guarantee credit of pension credit will rise in line with earnings, so that no single pensioner need live on less than £114.05 a week and no couple on less than £174.05 a week. The threshold for the savings element of pension credit will be uprated so that it remains equal to the basic state pension. That means that a typical single pensioner will now gain from pension credit with an income of up to £158.75 a week, while a typical couple will gain on income of up to £233 a week.

Nearly 3.3 million pensioners are now in receipt of pension credit, with an average weekly award of around £43. We are reaching more people and ensuring that they get their entitlements. Following the introduction of pension credit, about 2 million pensioner households now qualify for more help, or qualify for help for the first time, with their council tax or rent. From this week, pensioners can make a single phone call to claim all three: pension credit, housing benefit and council tax benefit. That will be a very welcome simplification.

By targeting resources at the least well-off pensioners, we have succeeded in lifting nearly 2 million pensioners out of absolute poverty since 1997. We now spend an extra £11 billion a year on pensioners, with almost half of the extra spending going to the least well-off third. Had we simply increased the basic state pension in line with earnings, only just over a quarter of that extra spending would have gone to the least well-off third, who would have been £30 a week worse off than they are under these measures. On average, pensioner households are now £1,400 a year, or £27 a week, better off in real terms than they would have been under the 1997 system, with the least well-off third of households £1,900 a year, or £37 a week, better off in real terms.

As well as tackling the dreadful legacy of pensioner poverty that we inherited, we have also helped all pensioners and will continue to do so. My right hon. Friend the Chancellor confirmed yesterday that the winter fuel payment would be £200 for every year of this Parliament. He also announced that he would be setting aside an additional £300 million over the next three years, so that the Government's warm front programme can offer pensioner households on pension credit free installation of central heating, and all other pensioner households without central heating a contribution of £300 towards the cost of installing it. He also announced further help with the cost of insulation. I believe that the whole House will welcome those announcements.

We have now reached the unprecedented position in which pensioners are no more likely to be poor than any other group in society. That is a particularly remarkable achievement after a period in which earnings have grown so fast, thanks to the stability and steady growth that we have enjoyed in the economy since 1997. We need now to introduce further reform to ensure that our pensions system continues to deliver for future generations of pensioners, as it is doing for today's. So we warmly welcome the broad framework of the Pensions Commission's proposals and options, which were published last week. We believe that they will provide the right basis for building the consensus that we need, but there is still a great deal to be discussed and debated about the detail.

Yesterday, I issued a challenge to the pensions industry. It believes that it can produce an industry-led model that will meet the Turner objective of enabling everyone to save for a pension at low cost, while outperforming the one proposed in the report. I have therefore asked the industry to work up the details of its alternative approach by early February, ahead of a joint national pensions debate event between industry and Government, when those proposals can be closely examined. In the same way, as we embark on a major new consultation exercise involving every section of our community, we shall scrutinise the commission proposals and options, debating the best ways to achieve the objectives that the commission set out and to deliver a lasting pensions settlement.

If we are to meet the challenges of an ageing society and permanently eradicate poverty in retirement, we also need to address the inequalities during people's working lives. That is why our record in tackling child poverty is so important. It is why we are committed to supporting families in work, why our welfare reforms and our aspiration for an 80 per cent. employment rate are so important, and why we want to see a modern, active and inclusive welfare state. We have lifted more than half a million children out of relative low income since 1997. Twenty million people, including just over 10 million children, are benefiting from tax credits, and the child tax credit, which will also increase by earnings, is benefiting 6 million families.

The standard rate of maternity allowance and statutory maternity pay will be increased by the RPI to £108.85 a week. Whereas in 1997 the maximum maternity pay and child benefit payment for mothers at home with their first baby was just £2,610 for the first year, by 2007 it will rise to £8,300—a real-terms increase of more than £5,000. In addition, the Work and Families Bill, which received its Second Reading yesterday, introduces a new entitlement to statutory paternity pay to enable a father to take time off work and to receive statutory pay instead of his partner if she returns to work early. That gives parents greater choice in how they balance their work and caring responsibilities in the first year of their child's life. For the sixth successive year, we are freezing non-dependent deductions to relieve the pressure on low-income parents who are accommodating their adult children.

Work is the best route out of poverty. There are now more people in jobs in Britain than ever before—2.3 million more than in 1997. Unemployment is at its lowest for nearly 30 years, with long-term youth unemployment 90 per cent. lower than in 1997. In just 12 months, employment has risen by 330,000 to 28.8 million, and is the highest in the country's history. It has risen in every region and nation of the UK. The lone parent employment rate has increased by 11 percentage points since 1997, and nearly 1 million lone parents are now in work, while the number on income support has fallen by more than 200,000 since 1997.

As my right hon. Friend the Chancellor said yesterday, we are not going to abolish the new deal; we will strengthen it. We will offer learning agreements for teenagers in eight areas of the country, extend the new deal pilots to help lone parents back to work, and pilot personal action plans for those unemployed for six months or more. Our new deal for disabled people has seen nearly 75,000 job entries since its launch in 2001, with 200,000 disabled people helped into work through our total package of new deal programmes.

We are seeing very encouraging early results from the pathways to work pilots. In the first year of those, the number of recorded job entries for people with a health condition or disability almost doubled compared with the same period the year before. Their continued success has driven a significant rise in the proportion of customers leaving incapacity benefit in the first six months of their claim, compared with non-pilot areas. Overall, on a national basis, that early success would be equivalent to about 150,000 incapacity benefit claimants being helped into work each year. That success has underpinned our achievements in helping people off incapacity benefit, with new cases now down a third since 1997 and the first falls in the total count, which fell by 41,000 in the year to May 2005.

In March, the Disability Discrimination Act 2005 completed the most far-reaching programme of disability rights legislation that any European country has put in place. It fulfilled our manifesto commitment to deliver enforceable and comprehensive civil rights for disabled people, and is a major landmark in enabling disabled people to live independently, fully recognised and respected as equal members of society.

Last week, on the international day for disabled people, we launched the new Office for Disability Issues. From this week, the Disability Discrimination Act extended protection from discrimination to another 250,000 people. However, we are not stopping there. In January, our Welfare Reform Green Paper will go further in tackling exclusion from economic activity and independence across the working-age population.

In April, we shall take further steps to break down the barriers that face older workers. The radical tax simplification that comes into play on A-day will do much to help. The Pensions Act 2004 continues to improve the rewards for those who choose to delay taking their state pension—even for only a short period—and, in April, the first people will benefit from the new option of a lump sum for state pension deferral, which could be worth more than £5,000.

In the spring, our White Paper will seek to lay the basis for a consensus on a lasting pensions settlement. My right hon. Friend the Chancellor also announced yesterday a change to the treatment of charitable, voluntary and personal injury income payments in income-related benefits. They are already disregarded in pension credit and pension-age housing benefit and council tax benefit. To simplify the system further and encourage the work of charities, they will be disregarded from October next year in assessing all eligibility for income support and jobseeker's allowance. There will also be a 52-week grace period for lump sum personal injury payments when assessing entitlement to income support, jobseeker's allowance and working-age housing benefit and council tax benefit.

This year's uprating continues our commitment to promoting opportunities for the many, not the few. It contributes to our programme of reform, which balances rights with responsibilities and offers everyone the opportunity to build a decent income for their retirement. It takes another big step away from the legacy of pernicious poverty, which we are determined should never return.

Photo of Nigel Waterson Nigel Waterson (Also PPS To the Chairman of the Party), Work & Pensions & Welfare Reform

I thank the Minister for his customary courtesy in letting me have an advance copy of the statement.

I imagine that many of my colleagues are somewhat preoccupied with announcements that relate not to benefits but to the Conservative party and its future. I should like to take the first opportunity in the Chamber to congratulate my hon. Friend Mr. Cameron on his overwhelming election as leader of our great party.

As a party, we naturally support any uprating of benefits. When the time comes, we shall not vote against them, unlike the Liberal Democrats, who memorably once voted against an uprating.

Perhaps the Minister could tell me in his response how much more the basic state pension would be next year if it were increased in line with earnings, not prices, as my party promised at the last election.

The statement is badged as being on welfare reform, yet, nearly nine years after the Government were first elected, we continue to hear the tired old rhetoric. The statement referred to the Government's "ambitious" programme and a "programme of radical reform", but where are those ambitious or radical proposals?

Perhaps I can understand Ministers' natural caution. After all, when Mr. Field was appointed the first Minister responsible for welfare and pension reform, the Prime Minister told him to think the unthinkable. He was promptly sacked for doing so.

The Government continue to dither about the reform of incapacity benefit. After a delay of many months, we are now promised a Green Paper in January. The problems of the Child Support Agency remain dire, with the recent revelation that the agency is spending more on its recovery department than it is recovering. When will Ministers decide that enough is enough? Only the other day, the Prime Minister revealed his view that root-and-branch reform was needed. I appreciate that he is less and less able to influence events, but when can we expect a statement on the CSA's future?

As if that were not bad enough, many families throughout the land have been caused unnecessary worry by overpayments of tax credit and the insensitive pursuit of their repayment. It seems to have become a ritual on such occasions for Ministers to go on about the successes—or the alleged successes—of the new deal. It remains a stain on the Government's record that 1 million young people are not working or in education or training. When will Ministers make that tragic wasted talent a priority?

On pensions, I should perhaps declare an interest as I have some private pension provision. The Chancellor attempted to torpedo Lord Turner's report before it was even published. In a leaked letter, he said to Lord Turner:

"'you should not assume' that the current link of the pension credit to earnings will continue beyond 2008."

Will the Minister confirm that pension credit will continue to be linked to earnings beyond 2008? In the part of the letter dealing with the Turner report, it was said:

"We warmly welcome the broad framework of the Pensions Commission's"— that is, its report—

"and we believe they are the right basis . . . But there is still a great deal to be discussed and debated about the detail."

Presumably, that is especially with the Chancellor. That is not exactly a ringing endorsement of an exercise that has taken three years and has cost £1.6 million.

Let me ask the Minister a direct question. Can he assure the House, with an entirely straight face, that he and his right hon. Friend are approaching the Turner report with a genuinely open mind? Was all this excellent work and analysis to be discarded on the say-so of the Chancellor? Does the Minister at least accept one of Lord Turner's central conclusions: that means-testing needs to be reduced? At present, nearly half of all pensioners depend on means-tested benefits. By 2050, that proportion will have risen to more than 70 per cent. Yet there are still 1.7 million pensioners entitled to pension credit who are not claiming it. The latest figures show that despite all the money that is being spent in the form of advertising and given all the efforts of the Pension Service, take-up is hardly increasing at all.

I shall make a prediction. I believe that, just as the Government have done with the measure of poverty or the timing of the economic cycle, they are about to move the goal post on their previously stated targets for pension credit and announce that in reality, the actual target should always have been lower. That is the Government's preferred method of tackling a difficult problem—just change the target or the methodology. We know that the take-up for other benefits, such as council tax benefit, is even more lamentable. The latest statistics show that in 2002–03 alone, pensioners were failing to claim up to £2.9 billion in means-tested benefits. No wonder 2 million pensioners are still living in poverty.

Only yesterday, the Chancellor of the Exchequer made it clear that the payment to help older people pay their council tax bills was a one-off for one year only. As it turned out, that was election year. Despite the amounts spent on local government finance, many councils, especially in the south-east, are predicting further sharp rises in council tax in addition to the massive rises that are already being suffered under the Government. Do Ministers not realise the terror that many pensioners have of receiving a council tax demand or a utility bill?

How can we ensure that older people keep warm when gas prices, especially, are soaring? The Government's lack of an energy policy is as glaringly apparent as their lack of a pensions policy. In its comments on yesterday's announcements, Age Concern referred to winter fuel payments, which it welcomes. It referred to the fact that, sadly, 31,000 pensioners died last winter as a result of the cold. It added that

"the Government needs to reform the basic state pension so that all pensioners know that they will have enough money in their pockets to pay their basic costs."

The growth in dependency on the state does not seem to bother the Chancellor. Does it bother the Minister, perhaps, that across British society as a whole, one third of households now rely on the state for more than half their income? If it does not bother him, it should.

Does it not add insult to injury to those in the private sector, and those who have no occupational pension, that the public sector are to enjoy the same pension terms, including retirement at 60 or even earlier, for the next 40 years?

Will the Minister tell the House where we are on error and fraud in the system? According to the Public Accounts Committee, about £3 billion a year could be lost through fraud and error.

Yesterday's statement, and the reaction of the Chancellor of the Exchequer to Lord Turner's report, proves—if proof were still needed—that it is the present incumbent of No. 11 who is the roadblock to reform in the welfare system, as well as across the whole of public services. For far too long the Department of Work and Pensions has behaved like a wholly-owned subsidiary of the Treasury. Is it not high time that Ministers started to come up with some ideas of their own for welfare reform?

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

The hon. Gentleman asked me about the uprating of the basic state pension. I have not been able to do the calculation that he asked about, but I can tell him that, as a result of this announcement, the basic state pension has risen since 1997 by 8 per cent. in real terms, as opposed to 1.7 per cent. after 18 years under the previous Government, so those who are concerned to have a higher basic state pension would do well to support the Labour party, rather than the party that he represents.

The hon. Gentleman talked about the radical reform of the welfare system. That is why the number of people in work is up by 2 million. That is why we have been able to lift 2 million pensioners out of poverty since 1997 and consigned abject pensioner poverty to the history books. Those are dramatic, radical and important changes, and we are determined to build on them in the next phase of welfare reform.

I can confirm to the hon. Gentleman that, in our response to the Turner commission, we do have a genuinely open mind. Nothing has been ruled in or out by the Government. The hon. Gentleman asked me that question directly and I give him that answer directly. We will bring back proposals in the spring, which I hope will be on the basis of as broad a consensus as possible across the House and across the country.

I hope that the hon. Gentleman welcomed the announcements by my right hon. Friend the Chancellor about additional help for 16 and 17-year-olds to move into work. I hope as well, given the points that the hon. Gentleman made a moment ago, that he welcomed the announcements about the expansion of the warm front programme to help pensioners to install central heating and installation. All those announcements directly address the issues that he raised.

The hon. Gentleman has a point about the rather low take-up of council tax benefit among pensioners. That is why the Pension Service is ringing up pensioners in receipt of pension credit to encourage and help them to apply for council tax benefit and housing benefit if they are entitled to them, in order that we can increase the take-up of those benefits among those who are entitled to them.

The hon. Gentleman asked about public sector pensions. It is worth making the point that, in not much more than 10 years, the number of people in public sector schemes with a pension age of 65 will more than halve, so the agreement that has been reached on public sector pensions will lead to substantial changes much more quickly than some people have realised. I think that that puts into perspective the point that he made about that.

On error and fraud, the extent of fraud has gone down by two thirds since 1997 in the most vulnerable benefits: income support and jobseeker's allowance. That is welcome progress. When the Conservative party was in office it did not even measure the extent of the problem. We have made dramatic progress.

Photo of Frank Field Frank Field Labour, Birkenhead

Does the Minister accept the Opposition's line that large numbers of pensioners are eligible for but not claiming the additional help with pension credit? Does he share the experience that I have? I find almost no one in Birkenhead who for any length of time is eligible and not claiming pension credit. Has not that benefit proved itself to be extremely effective in channelling help to our poorest pensioners? Is not the problem one of long-term sustainability rather than non-take-up? One cannot run a free society by budgeting for 75 per cent. of pensioners being on means tests, and one is unlikely to get elected if it costs 13p on the standard rate of tax to deliver that benefit. Does not that make his comment about consulting about the Turner commission report that much more important? While every hon. Member welcomes the announcement that the Government are talking to people outside the House, might they talk to people inside the House and might he ask the normal channels for a debate on the Adjournment, so that hon. Members on both sides of the House can give their views on that important report?

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

My right hon. Friend's characterisation of the position regarding the pension credit is much fairer than that of Mr. Waterson. It is true that some people who are entitled to pension credit are not yet receiving it, but it looks as though the total number eligible is rather less than we first thought, which has doubtless had an effect. Of course, some of those entitled to but not receiving pension credit are entitled to rather small amounts. The evidence is that the overwhelming majority of those entitled to substantial amounts are receiving it, which is why it is having such a big impact.

I very much agree with my right hon. Friend that the pension credit has been an extremely effective intervention in addressing the problem of long-term pensioner poverty, effectively making abject poverty a thing of the past. I would welcome a debate along the lines he suggests, as would my right hon. Friend the Secretary of State for Work and Pensions. Such discussions are doubtless under way as we speak.

Photo of Danny Alexander Danny Alexander Shadow Spokesperson (Work and Pensions)

I thank the Minister for his courtesy in giving us advance sight of the statement, many aspects of which Liberal Democrats welcome. In the light of recent leaks to the press, we particularly welcome the news that the pension credit will continue to be uprated in line with earnings. Does he agree that, whatever the Chancellor may have said in advance of Lord Turner's report, it would be unthinkable for a Labour Government to break the link between the pension credit and earnings? Will he confirm that continued uprating of the credit in line with earnings over the long term is shown by the Treasury to be a reasonable assumption in the table on page 39 of the long-term public finance report published yesterday? Does he therefore agree that Lord Turner's proposals represent an affordable alternative to the progressive expansion of means-testing? As Mr. Field said a few moments ago, the choice is therefore between a sustainable scheme and one that is unsustainable in the long term. We also welcome the uprating of many other benefits, and I congratulate the Minister on continuing the freezing of non-dependent deductions.

The Minister says that 3.3 million pensioners are in receipt of the pension credit. How many are entitled to it but are not receiving it? The state pension will increase by £2.20 a week, but how much of that will be consumed by council tax rises in the coming year? Does this not highlight the need for a decent state pension for everybody as a guarantee against poverty? We should not be content to celebrate the fact that pensioners are now merely no more likely to be poor than anyone else in society.

I welcome the Minister's decision to look at an industry alternative to the national pension savings scheme suggested by Lord Turner, but does he agree that, to be viable, the cost of such a private sector scheme must be at, or under, the level set by Lord Turner for the state-backed scheme? Although it is important to ensure that benefits are uprated fairly, is it not also important to ensure that they are delivered effectively?

In last year's corresponding statement, the Secretary of State for Work and Pensions said:

"Our reforms through Jobcentre Plus have been remarkable."—[Hansard, 6 December 2004; Vol. 428, c. 912.]

Does the Minister agree that they have indeed been remarkable—for the range of serious problems that claimants now face in getting their money, whether uprated or not? It is now taking an average of 13.5 days to clear a jobseeker's allowance claim, compared with the target of 12 days, and nine centres have returned to manual processing. Will the Minister take steps to ensure that claimants can get their benefit by the time today's uprating comes into effect?

The Minister will also be aware that a very cold winter is forecast, so it is disappointing that no provision has been made for extending the winter fuel payment to severely disabled people, as we proposed in our manifesto. Will he re-examine this proposal, which recognises the additional costs and problems for severely disabled people arising from cold winter weather?

We welcome confirmation that a statement on welfare reform will be made next January, the encouraging signs coming from the pathways to work pilots, and the proposed increase in back-to-work support for lone parents. However, the Minister said nothing about the welfare reform desperately sought by families throughout the land: reform of the failing and discredited Child Support Agency. Will he confirm that a statement will be made on this issue by the end of the year, as previously promised by the Secretary of State for Work and Pensions?

The inclusion of the words "welfare reform" in the title of this statement may have caused a frisson of excitement in some parts of the House that eight years of waiting for serious proposals on welfare reform were perhaps about to be brought to an end this afternoon. I note from the Chancellor's statement yesterday that the money raised from the windfall tax to pay for welfare to work has now all been spent. When welfare reform proposals are made in January, will the Minister ensure that, despite the tightening fiscal position, they are properly funded, so that the 1 million or more incapacity benefit recipients who would like to work again are not once more disappointed by this Government?

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

I am grateful to the hon. Member for welcoming the freezing of non-dependent deductions, which his predecessors did consistently over the past few years. It is an area on which we have agreed. The earnings link for pension credit has proved an effective tool for reducing pensioner poverty. As he knows, the commitment to maintain that uprating lasts until 2008. Beyond that, the Chancellor will make announcements in due course, although the hon. Gentleman is right that the illustrative figures in the pre-Budget report reflect the uprating continuing. Whether that will happen in practice is a matter for the Chancellor to announce.

I draw the hon. Gentleman's attention—Mr. Waterson may also be interested, given what he said earlier—to what the Turner commission report said about means-testing. Page 188 states:

"A significant improvement in actual and perceived incentives for the majority of people of current working age can be achieved by limiting the future spread of means-testing".

That was the concern in the report, rather than the immediate elimination of or drastic reduction in means-testing. It is important that we recognise that thrust in the report. It is important that proposals for pension reform should be affordable, and that is one of the tests set by my right hon. Friend the Secretary of State in welcoming the Turner commission report last week.

Danny Alexander mentioned the impact of the council tax on pensioners, and it is important that we make further progress in increasing the take-up of council tax benefit. It is important that an alternative, industry-led, low-cost personal account pension scheme should be comparable in terms of cost and in other ways to the national pension saving scheme suggested in the Turner report, and that is the basis on which we will evaluate the proposals. There are two prospects, and I have asked the industry to produce its proposals by February, so there may be others. We will pragmatically evaluate the alternatives, looking at the cost and at other issues, including the impact on business, which will be important.

We are improving the bedding down of the new systems for jobseeker's allowance and we have seen much progress. I can confirm that my right hon. Friend the Secretary of State will make a statement on the Child Support Agency shortly—either later this month or early in the new year.

The hon. Gentleman looks forward to the Green Paper on the new deal, which is due in January. I hope that his party will support the increasing and active role that we envisage for the state in helping people back into work. His party has always pledged to abolish the new deal and remove the extra help that has been so effective. I hope that the tone of his remarks reflects some new thinking in his party and that we will be able to agree on the tremendous attractions of a more active role for the state in helping people back into work.

Photo of Jon Trickett Jon Trickett Labour, Hemsworth

My hon. Friend said that the best way out of poverty is through jobs—a welcome contrast to the old Tory practice of throwing people on to incapacity benefit to reduce the dole queues. The fall in the number of people claiming IB is welcome, but will my hon. Friend confirm that it has been achieved by incentivising the pathway back into work? Will he therefore reject a proposal from any source that incapacity benefit should be reduced in a punitive attempt to get people back to work, which would reflect the old Tory methodology, not Labour values?

R

Odd how things change, seems your right one minute left the next.

Submitted by Robert Naether

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

Yes, I agree. That is why there has been so much support for our approach among organisations representing disabled people. The Green Paper will be about giving people extra help to allow them to get into work. As my hon. Friend rightly said, the pathways areas are seeing double the number of recorded job entries compared to other areas. The pilots are working well to help incapacity benefit customers into work. They have been popular in those areas and we want to expand that approach across the country.

Photo of Hywel Williams Hywel Williams Shadow PC Spokesperson (Education), Shadow PC Spokesperson (Work and Pensions), Shadow PC Spokesperson (Health), Shadow Spokesperson (Culture, Media and Sport), Shadow PC Spokesperson (International Development)

Given the Chancellor's welcome but belated U-turn on tax relief to buy second homes for pension funds, will the Minister confirm that in the great pensions debate the whole question of tax relief on pensions, which is unduly weighted towards higher rate taxpayers, will be ruled in, or will it be set aside somehow?

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

As I said earlier, nothing is being ruled in or out and we shall be interested in any suggestions that the hon. Gentleman or his hon. Friends make, although I draw his attention to the points made in the Turner report about the difficulties involved in radical change. However, if he has some proposals I should be interested in seeing them.

Photo of Harry Cohen Harry Cohen Labour, Leyton and Wanstead

I congratulate the Government and local authorities such as mine in Waltham Forest on their important efforts to improve entitlement take-up, but a huge number of people still do not receive their entitlement. Now that partnership teams have been rolled out in many areas, will my hon. Friend make a change so that they can make allocations to people who are entitled and that each case does not have to go back to a central agency to be worked out? Will he undertake to look at a possible policy change whereby people who are entitled can receive their money whether they claim or not? It is not just that they are stubborn—they may have early dementia or all sorts of other problems. Will my hon. Friend undertake to have a look at that?

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

Yes. We are doing a lot in exactly the direction advocated by my hon. Friend. There is a good joint team in Waltham Forest, the area that he represents. I have visited the team and had a look at its work; it is a particularly effective example. We are considering delegating a greater role to people other than staff in our Department, including enabling voluntary sector organisations to validate documents and check claims, thereby taking on some of the work that has had to be done in the Department in the past. I agree that it would be helpful to move in that direction. I also agree that we should increasingly be moving towards making payments automatic, if we are able to do so. That, of course, depends on our being able to access data that may not be in the systems that the Department uses, but there is much potential. My hon. Friend is on to something important and we are looking actively at it.

Photo of Angela Browning Angela Browning Deputy Chair, Conservative Party

Will the Minister take a look at the fact that people with learning disabilities and autistic spectrum disorder are required to claim incapacity benefit? Before the Government abolished severe disablement allowance and replaced it with incapacity benefit, there was recognition of the fact that such people are born with that condition and will almost certainly die with it. I do not say for one minute that there should not be every opportunity to help them get into work if possible, but at present they have to go to their GP every two or three months just to prove that they still have the condition with which they were born. That is rather cruel and unnecessary. Will the Minister look into it?

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

Yes, I should be happy to discuss that matter with my right hon. Friend the Secretary of State, although, like the hon. Lady, I want to underline the importance of not writing anybody off, and not assuming that some people will be unable to work. She makes a fair point and I shall certainly discuss it with my right hon. Friend.

Photo of Angela Eagle Angela Eagle Member, Labour Party National Executive Committee

I congratulate my hon. Friend on being part of a Government who ended the historic link between poverty and old age—a truly magnificent achievement. May I, in the same vein, ask him to provide us with a few more details on the warm homes grant extensions, particularly for the installation of central heating in the properties of pension credit recipients who do not have such heating? Will applications have to be made, or will attempts be made to reach such properties and ensure a more automatic system?

R

Then why are people at 60 or 65 being sacked when they want to work on, why is the law not changed to allow people to stay in work no matter what the employer wants

Submitted by Robert Naether

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

I welcome what my hon. Friend says and I agree with her. The announcements that my right hon. Friend the Chancellor made yesterday will be taken forward through the existing warm front programme, which, as I am sure my hon. Friend knows, in many areas has been very active in going out to people and encouraging them to take up their entitlements. The scheme will provide free installation of central heating for households on pension credit who do not have it, and for other households not on pension credit there will be a contribution of £300 towards the cost of installing it. I agree about the need to work hard and ensure that people are aware of that opportunity, which represents a major breakthrough and a major improvement in the way we address the problem of heating for those who are above pensionable age.

Photo of David Heath David Heath Shadow Leader of the House of Commons, Shadow Spokesperson (Cabinet Office)

Mr. Waterson mentioned Liberal Democrats voting against the benefit uprating; he may remember that it was the infamous 75p pension uprating, and we would do the same if the Minister proposed it again.

May I bring the Minister back to a point made by my hon. Friend Danny Alexander, which I do not think he responded to? My hon. Friend asked whether the Government had considered extending the winter fuel payment to severely disabled people. While the Minister is replying to that, he may also reply to the point about whether the warm front scheme extends to severely disabled people.

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

First, I can assure the hon. Gentleman that the retirement pension will go up by £2.20 a week on this occasion, which I am sure he will welcome.

We have received a number of representations asking for the availability of winter fuel payments to be extended. We do not propose to do so. Disability living allowance helps to defray the additional costs of disability, which might include heating. The warm front schemes help people other than those above state pension age, but the announcements that my right hon. Friend the Chancellor made yesterday were specifically about people who are above state pension age.

Photo of Gordon Prentice Gordon Prentice Labour, Pendle

Am I the only one to be astonished at the dismissive way in which Danny Alexander brushed aside the statement made by my Friend that pensioners are no more likely to be poor now than any other people in society, which I think is a remarkable achievement?

Council tax can be a very heavy burden for pensioners on modest fixed incomes who do not receive the pension credit. Now that the review of council tax has been abandoned, will my Friend tell me whether there is any fresh thinking within the Government on how pensioners of modest means can cope with above-inflation council tax rises?

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

I am sure that my hon. Friend will very much welcome the additional payment being made this year to help with council tax. I do not think that it is right to say that the review has been abolished; work is continuing that will contribute to the outcome of the forthcoming spending review. I anticipate that an announcement will be made in the Budget about whether additional payments will be made in future years.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

Although I appreciate the Government's noble intentions on the reduction of child poverty, will the Minister confirm the number of children whom he estimates remain in absolute poverty? Has he had a chance to see today's press reports that quote research from Save the Children that, despite their best efforts, the Government are unlikely to meet their target to eliminate child poverty by 2020?

Photo of Stephen Timms Stephen Timms The Minister of State, Department for Work and Pensions

We are on track to hit our first milestone, which was to reduce child poverty by a quarter by last year. We will know the details of that by the spring. That is a welcome step forward, and I am glad the hon. Gentleman supports the aim that we have set out. I agree that it is a very important aim, and we are determined to make further progress. We have already succeeded in arresting and reversing the long-term trend of rising child poverty. By 2003–04, about 500,000 fewer children were in low-income households compared with 1998–99. We are determined to maintain that progress towards our target of abolishing child poverty by 2020.