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Speaker's Statement

3.31 pm

Mr. Speaker: Last week, I undertook to consider Members' concerns about ministerial replies to questions and to make a statement. It would be unwise for me to express a view on the adequacy of a particular ministerial answer. There are bound to be two views on that, and neither is a matter for me. The same is true of complaints about the transfer of individual questions. So I cannot alter the ruling that I gave last Wednesday and sit in judgment on particular answers. Faced with unsatisfactory replies, Members should seek advice—the Table Office is always ready to help—and then they should persist. One pointed question can, in my experience, achieve more than 20 vague ones. But I believe that the House would expect me to go beyond saying that the impartiality of the Chair makes it impossible for me to deal with individual cases. The House's legitimate expectations are contained in the 1997 resolution on ministerial responsibility. It is the duty of a Speaker to do what can properly be done from the Chair in support of the resolution. It is the duty of Ministers to act in the spirit of the resolution. The resolution says:

While it is for the House at large, not the Chair alone, to hold Ministers to those obligations, I can best discharge my responsibilities by suggesting ways in which Members might help themselves. The Procedure Committee is undertaking a wide-ranging inquiry into

I have no doubt that the hon. Member for Macclesfield (Mr. Winterton) will be happy to receive chapter and verse if any Member feels that the system is ineffective and scrutiny is being thwarted. The Committee has already sent round a questionnaire, and I am sure that many Members will want to take the opportunity to contribute to the inquiry.

Secondly, when Ministers refuse to answer questions, they are expected to indicate in their reply why they have refused by reference to the Government's code. The Public Administration Committee regularly looks into the pattern of answering and makes a report to the House. Again, Members aggrieved at a ministerial refusal to answer might get in touch with the Committee Chairman, the hon. Member for Cannock Chase (Tony Wright).

If Members individually take the appropriate steps to focus their experience through those Committees, and in other ways that may occur to them, the House collectively can make real progress towards better accountability.

Mr. Eric Forth (Bromley and Chislehurst): On a point of order, Mr. Speaker.

Mr. Speaker: I will take points of order later. First we must hear the statement from the Secretary of State for Work and Pensions.

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Benefits Uprating

3.35 pm

The Secretary of State for Work and Pensions (Mr. Alistair Darling): With permission, Mr. Speaker, I shall make a statement on the annual uprating of benefits and pensions, on the pension credit, and on new measures to help more people into work.

As a result of the reforms that we have made, we are again able to do more to give more security to those who are unable to work and to those who have retired. This year, we will again increase some benefits by more than the usual uprating. We are also making fundamental reforms to reward savings. I will explain how the pension credit provides a radical departure from the social security system that we inherited, and announce further measures to provide a greater employment opportunity for those who can work.

First, let me deal with uprating. Most national insurance benefits will rise in the normal way, according to the retail prices index—which is 1.7 per cent.—and most income-related benefits will rise by the Rossi index, which is also 1.7 per cent. Details will be placed in the Vote Office, and will be published in the Official Report.

We are also doing more to help parents, so that families can balance their work and home lives. The standard rate of maternity allowance and statutory maternity pay will rise from £62.20 to £75 next April. That is the largest increase in maternity benefit since 1958, and will help about 340,000 families a year. In 2003 it will rise again, to £100 a week. Moreover, the sure start maternity grant will rise from £300 to £500 next year. In 1997, a new mother on income support would have received just £100 to pay for essential items; from next year, she will receive £500. That is a substantial increase for mothers on lower benefits.

This year we want to do more to help families who are bringing up children with disabilities. When we came to office, the extra money paid to low-income families with a disabled child was just £21 a week. Last year we increased it by more than £7 a week; this year I can go further. I propose to increase the disabled child premium by another £5 a week—on top of the normal uprating—to a new rate of £35.50. In 2003 it will rise again by £5 over and above inflation, to more than £40 a week on top of basic income support or tax credits. That will benefit about 80,000 children. It will give extra help where it is most needed: it will help families on low incomes, both in and out of work, with disabled children.

I want to announce a further change. In the past, people with the most severe disabilities found that if they or their partners were in work—often against all the odds—they lost entitlement to the independent living fund, which paid for their essential care. From April next year, the earnings of disabled people and their partners will no longer be taken into account in the independent living fund. That is worth an average of £130 a week to those families. At the same time, we will increase the capital limits in relation to the fund, to extend help to people with savings of up to £18,500. That is a £10,000 increase on the current figure.

We are also determined to boost pensioner incomes. In 1997, the poorest pensioners were expected to live on just £68.80 a week. Last year we increased the minimum income guarantee to £92 a week; from April next year,

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the guarantee for a single pensioner will rise by £6 to £98.15 per week. That is an increase of £23 a week for the poorest pensioners, over and above inflation, since we came to office. For couples, the new rate will be £149.80.

So that all pensioners can share in the rising prosperity, the basic state pension will rise by £3 in April—by £4.80 for married couples. Widows' and bereavement benefits—which, because of the changes we made in 1998, are now paid equally to men and women—will also rise by £3.

As we promised in our manifesto, the basic state pension will remain the foundation of retirement income. That is why we have announced guaranteed rises for the future of at least £100 a year for single pensioners, and at least £160 a year for couples.

We also promised to do more to reward pensioners who have saved for their retirement. A year ago, I published a consultation document that set out our proposals to reward thrift. Today, I am publishing our response to that consultation, setting out how the pension credit will work. Copies will be available in the Vote Office. Tomorrow, I shall also publish the Pension Credit Bill.

All of us have met pensioners who struggled through their working lives to put something by for their retirement, but who then found that they are little or no better off than those who saved nothing. The pension credit will ensure that, in future, it pays to save. The credit works in two ways. First, it will bring pensioners' entitlement up to a guaranteed minimum level of at least £100 a week—or £154 for couples—in 2003, and it will increase in line with earnings for the rest of the Parliament. Secondly, the credit will provide an additional top-up to reward pensioners aged 65 or over who have saved for their retirement. So pensioners with modest second pensions and savings will receive more as a result of their thrift.

A further change is essential to reward savings. We shall abolish the rule that excludes pensioners with £12,000 or more in savings from any help and introduce a fairer system for taking into account income from savings.

About half of all pensioners stand to gain from the pension credit: more than 1 million pensioners from increased guaranteed income, and more than 4 million pensioners from the savings reward and the improvements to the rules on the treatment of savings. Two thirds of those who stand to gain from the pension credit are women, half of them over 75. On average, pensioners will gain £400 a year, with some receiving up to £1,000 a year. That is the difference that the pension credit will make.

Any pensioner with an income below about £135, or couples with an income below £200, will see their hard-earned savings rewarded with extra money, not penalised as in the past. We are also going to make it easier for pensioners to receive all their entitlements. Last year, I said that we would end the weekly means test and the endless form filling, and we shall. The pension credit will be calculated at the same time as the basic state pension, when people retire. For those over 65, whose incomes tend to be more settled, in most cases we shall reassess their income only every five years. Each year, they will see an automatic increase in their pension credit, after the uprating, and that will take account of any changes in their second pensions.

28 Nov 2001 : Column 974

The pension credit will increase guaranteed income, end the weekly means test and reward thrift. It will also remove an injustice in the system: for the first time, it will pay to have saved. More than 5 million pensioners stand to gain from it.

I now turn to employment. In the past four years, we have introduced more help than ever before to make work pay and to make work possible. Today, with my right hon. Friend the Chancellor of the Exchequer, I am also publishing a paper that demonstrates the need to provide more employment opportunities to those who have missed out in the past. The analysis shows very clearly what happened when we did not have a system that actively helped people into work, and when the then Government took a hands-off approach to unemployment, leaving it all to chance. Between the 1970s and the mid-1990s, the number of lone parents and sick and disabled people on benefits trebled. A whole generation was written off.

Three immediate conclusions follow from that paper. First, we have to do more to help everyone of working age to get into work wherever possible. That is why, starting next year, we are extending the single gateway to the benefits system—Jobcentre Plus—across the whole country. Everyone of working age will have work-focused interviews to help them into jobs wherever possible.

Secondly, when people lose their jobs, the evidence shows that the quicker we intervene, the quicker people will get back into work. As the Chancellor said yesterday, our economy is well placed to deal with global uncertainty and the labour market is in a stronger position than in a generation. However, when people do lose their jobs and there are redundancies, we have to take action quickly. In many cases, jobs are available: every month, half a million people enter work or change jobs. So we need to do more to match people with the vacancies that employers are trying to fill. The fact is that 10,000 vacancies are notified to the Employment Service every working day.

Today, therefore, I can announce that, over the next two years, I am allocating an additional £6 million to the rapid response service which offers prompt help to those who have been made redundant. The money will be used by each region to put together the right response for people in their communities, ensuring that people affected by redundancy have the information and help that they need to find new jobs. The service will work to match people's existing skills to those needed by new employers, and it will ensure that retraining is available to help people move into new industries.

Thirdly, we have the lowest unemployment level for 25 years, but there are still people who need extra help to take up available jobs in their areas. Over the past four years, the new deal has established a new welfare contract, with more help and support than ever before, in return for greater responsibility on the part of individuals to help themselves. Today, I can announce a further measure that will build on the new deal to help long-term unemployed people who need more intensive help to get into work.

We will guarantee those people who qualify a full-time job, lasting up to a year, and paid at the national minimum wage. They will have the same employment rights, and they will be entitled to the same in-work benefits, as anyone else. In return, it is not unreasonable to require

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people to take up that opportunity. We aim to give people a choice of job, but they will not be able to turn down all offers and remain on benefit.

We will start that approach in six places from April next year, in areas in Sheffield, Cardiff, Oldham, Sunderland, Lambeth and east Ayrshire. We will follow those with a second group over the summer, covering areas in Leeds, south Manchester, Sandwell, Bristol and Greenwich. In the autumn, we will start further pilots in Hackney, Great Yarmouth, Knowsley, Rotherham and Coventry, with provision starting by the end of the year in Burnley, Wrexham, Dundee and Bradford. I will be writing to hon. Members who represent the constituencies involved to ask them to become involved in the new project.

We will pay for those jobs, working in partnership with employers, local authorities and organisations with experience in offering intermediate labour market opportunities. It is an investment of more than £40 million over two years to equip 5,000 people who are currently long-term unemployed with the skills, the support and the experience of work they need as a stepping stone to jobs in the local labour market.

Britain's unemployment is the lowest since the 1970s. The new deals have helped hundreds of thousands of people into work. We are determined to ensure employment opportunity for all—including those who have missed out in the past—and these measures will help us to do that. We are doing more to help people into work, and to help those who cannot work. We are also making sure, for the first time, that pensioners are rewarded for their savings. I commend this statement to the House.

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