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2 Apr 2001 : Column 1

House of Commons

Monday 2 April 2001

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked--


1. Mr. Geoffrey Clifton-Brown (Cotswold): If he will make a statement on changes to the proportion of benefits subject to means-testing since 1997. [154858]

The Secretary of State for Social Security (Mr. Alistair Darling): The proportion of spending on income-related benefits amounted to 17 per cent. in 1979. By 1996-97, it had more than doubled to 35 per cent. of benefit expenditure. This year, we expect it to be 29 per cent.

Mr. Clifton-Brown: I thank the Secretary of State for that answer. Nevertheless, will he concede that morethan 50 per cent. of pensioner households depend on

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means-tested state benefits for three quarters of their income? Does he accept that the position is getting substantially worse? What does he intend to do about it?

Mr. Darling: I appreciate that the hon. Gentleman may have expected a different answer. The proportion of means-tested benefits is lower than it was when we took office four years ago. He asked about the pension credit. I make no apology for the fact that the credit means that, for the first time, pensioners who have saved a little money or have a modest occupational or works pension will be rewarded by the state instead of punished under the current system. I cannot understand why Conservative Members want to maintain that system, which is a disincentive to saving. We should encourage people to save for their retirement. The pension credit will ensure that those who do so are rewarded.

Mr. Peter L. Pike (Burnley): Have not this Government done more than any previous Government to ensure that the poorest people who are in need of most help receive it? They have done more than any previous Government to ensure that those who are entitled to benefits receive them. Is not that a good record of achievement for the Labour Government?

Mr. Darling: My hon. Friend is quite right. When Conservative Members say that they are against means-testing, they mean that they oppose giving more money to the people who need it most. From next week, about 2 million of the poorest pensioners will be at least £15 a week--nearly £800 a year--better off in real terms than in 1997. We should be proud of that record. We are on the way to eradicating pensioner poverty. We are rewarding saving and helping all pensioners through the benefits and tax systems.

Mr. Tim Boswell (Daventry): That is all window dressing. This week, the Government's brand new means test for incapacity benefit against occupational pensions income begins. Will the Secretary of State confirm that it

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will hit up to 100,000 vulnerable people? Does not he also believe that it will send a deplorable signal to those who contemplate prudently making provision for their future?

Mr. Darling: No, I do not. People who retire on occupational pension incomes of more than £85 a week should make a contribution towards their incomes if they have to retire early. The hon. Gentleman described the measures that I outlined to help pensioners as window dressing. That speaks volumes for the Conservative party's attitude. Does he believe that the minimum income guarantee, which gives £15 more a week to nearly2 million pensioners, is window dressing? The winter fuel payment of £200 is paid to every pensioner household. Is that window dressing? People can see the shape of things to come. If the Conservatives were ever re-elected, they would get rid of the minimum income guarantee, the winter fuel payment and many other measures that benefit millions of pensioner households.

Benefit Reform

2. Ms Rosie Winterton (Doncaster, Central): What steps he is taking to reform social security benefits in order to assist people to return to work. [154859]

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): The claimant count is now below 1 million for the first time since December 1975, with unemployment falling in every region. We have introduced reforms in the tax and benefit systems to make it easier to move into work and to ensure that work pays.

We have just announced the creation of "jobcentre plus", which will unite employment services with benefits services for people of working age. There will be50 pathfinder offices by October.

Ms Winterton: I thank my hon. Friend for that reply. I know from speaking this morning to the manager of the jobcentre in Doncaster that the changes that were announced today, especially the change that enables claimants who wish to take up temporary work to return to benefits more easily, will make a genuine difference to helping to get people back to work. It will give people greater confidence about taking up temporary work and thus gaining greater experience and skills, enabling them to get a permanent job.

If the scheme is as successful as the manager of the jobcentre in Doncaster believes that it will prove, will my hon. Friend consider extending it to other claimants such as those on incapacity benefit and income support?

Angela Eagle: My hon. Friend makes a good point. There are more people in work than ever before--the figure has increased by 1.2 million since the election--but we want to ensure that the chance to work and the opportunity to make work pay apply to even more people. Rapid reclaim, which allows people to return to benefits more quickly if jobs do not last longer than 12 weeks, will make a good contribution to that. We will evaluate its operation and, if there is a good case for extending it, we will consider doing so.

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Mr. Archy Kirkwood (Roxburgh and Berwickshire): Will the Minister confirm that one of the biggest remaining hurdles in the way of getting young people in particular off benefit and into work is the operation of some of the housing benefit rules? Will she confirm that the Government are considering an amendment to the single room rent restriction on the level of housing benefit available to young people? Is she aware that there is some suspicion in the pressure group community that consultation on that will not be adequate, leading pressure groups to believe that relaxation of the restrictions will not amount to very much?

Angela Eagle: I would have hoped that the hon. Gentleman would welcome the relaxation of the single room rent restriction, which extends it to properties that actually exist. The shared room rent provision, which we hope will be in operation by July this year, will give single under-25s having difficulty finding rented accommodation much more chance to do so.

Mr. Dale Campbell-Savours (Workington): What additional guidance is being given to benefit offices in counties such as Cumbria--and, in particular, the Lake district--to deal with the very large increase in inquiries from people who own or work for businesses?

Angela Eagle: We have issued instructions to all benefit offices in the areas affected by foot and mouth to make clear the rules for those claiming jobseeker's allowance and for the self-employed. Benefits Agency offices must also ensure that any claims made as a result of the foot and mouth outbreak are dealt with quickly, sensitively and flexibly.

Mr. Eric Pickles (Brentwood and Ongar): I have to tell the hon. Lady that that is not the case. When claimants make inquiries, they find that benefit offices are unaware of the flexibility rules. Will the Minister ensure that that flexibility is made known, particularly when claimants are referred by the rural hotline to local offices and receive no advice from them? Does she understand that basing this provision only in infected areas is a poor way of distributing social security benefits? A business can be greatly affected by foot and mouth but be outside the infected area: it can be a matter of just a few yards. Does the Minister regard as not particularly sensitive the advice given by local officers either to move a business into an affected area or to go bankrupt?

Will the Minister also ensure that the Secretary of State makes representations to the Chancellor to ensure that companies paying out working families tax credit to their employees receive a quick return from the Government? The cash flow and viability of rural businesses are being adversely affected when that does not happen.

Angela Eagle: We are certainly not issuing advice that businesses should go bankrupt to claim benefits. If the hon. Gentleman wishes to bring examples to my attention, I shall happily deal with them. However, I re-emphasise that special advice has been issued to officers in affected areas. We are in the middle of preparing extra information, which we shall make available, perhaps through local newspapers, about likely entitlements for people in particular circumstances, especially if they are self-employed. We believe that the most confusion

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probably surrounds that category; employees who have been laid off certainly have a simpler way through the system. We shall make that information available, but if the hon. Gentleman can let me have examples of cases that have gone wrong, I shall ensure that such problems do not recur.

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