State Pension Credit Bill [Lords]

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Mr. McCartney: Part of our core activity is to develop working relationships and partnerships with older people's organisations in respect of the development and roll-out of the Pension Service, and older people's issues generally, such as better access to public services. Furthermore, in the development of future policy on income and services, we have established several groups that have already begun meeting to tackle the issues, including a forum to deal with poverty. At every level, official and political, we involve all the groups that we possibly can and make them partners with the Department.

That is not happening just at national level. With the roll-out of the Pension Service at regional level and at local level in particular, much of the activity is being focused on the output of the local service. During the next few years, the structure of a meaningful local partnership will include the involvement of local pensioner organisations in all instances, because it is important that we take the Pension Service to the pensioners rather than asking them to come to the service. There will be a change of ethos and strategy in the management of the service and the way in which staff work in the community with older people in relation to take-up of pensions and other services.

Mr. Webb: There is one thing that I have been trying to pin down about the way that the Pension Service will work. In principle, pensioners can go to a Benefits Agency office the day that they want to talk to someone in the Department for Work and Pensions. Although I see the attraction of going to the local library on the third Thursday in the month for an Age Concern session or whatever it might be, clearly, that is much less flexible and responsive. Will the Minister clarify what the arrangement will be if someone does not want to pick up the phone but, being fit and well, wants to go out of their home? How soon will they be able to see someone face to face?

5.45 pm

Mr. McCartney: They can do that now, and they can continue to do that. I have seen a letter saying that that is not the case. However, it is absolutely the case. We are offering additional services in the community because our research shows that older people do not like to visit old-fashioned Benefits Agency offices, and we have to respond to that. It is not that we are taking a service away and saying, ''You can have this, and that is all.'' It is about people being able to visit the Department—and, if they do not want to do that, the Department will come to visit them. Such meetings might take place at a local luncheon club, or at Age Concern's local office, or in joint action with the local authority. Currently, a pilot project of Care Direct is giving single gateway access to older people and their carers to a range of services, and we want to build on that concept.

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As the new service rolls out, it will become possible to see many more older people in their homes. Many such people are isolated because of age or infirmity. They lose out too. It is important to release officers' time, so that they can be visited in their homes.

That links up with something else that the Government are doing in primary care. We are increasingly getting the primary care team to work with other professionals, so that people's health and social care and financial well-being can be looked at as a total package. That is the principle behind the concept. It will not be realised immediately—in the next few weeks or months—but we must have ambition and an idea of where we want to take the service.

Mr. Boswell: The Minister mentioned that there were letters flying around, and he will be aware that the Public and Commercial Services union itself is one of the organisations that has expressed concern. I do not wish to suggest to him that he should conduct industrial relations negotiations through Members of Parliament or other third parties, or that he should seek to produce such partisan literature. However, he did seek to suggest that some of the stuff that is going around about the withdrawal of personal interviews was not properly conceived, and I must say that I am beginning to receive correspondence from constituents who are saying that they are worried that they are not going to have the opportunity to have personal access to benefits offices, and so forth. Before that tide begins to run, and bearing in mind the sensitivities about the subject—which I respect—will he give some consideration as to how he might communicate with us? Some of the things that he says in the Committee might also need to be said to colleagues outside the Committee Room, so that there is no doubt as to where the Government stand on this.

Mr. McCartney: As a former trade union negotiator, I do not intend to negotiate in a forum that is unrepresentative of the unions.

To be serious, I have a good working relationship with the PCS, and I intend to maintain that. It has been very helpful with regard to the change. Let us be honest: the change has been great, and it is legitimate for it to voice concern and to seek assurances about issues, particularly with regard to those who work in the Pension Service, which is one of the most stable work forces in the Department. People who come to work for the Pension Service tend to remain there. It is a highly skilled and motivated workforce, so we want to maintain a good relationship with it.

It is true that, in the campaign that is being put across to maximise the potential for negotiation in the new Department, some things have been said that are not only technically incorrect, but incorrect in terms of the entire concept. We have sent out information to hon. Members. I intend to send information to them regularly about pension centres in their areas. We have already sent out information about the new officials in particular areas; so, on a rolling programme basis, hon. Members will get information. If any hon. Members become concerned or worried because they

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have received letters such as those that have been mentioned, I will provide them with a letter that effectively explains matters, which they can give to their constituents.

Annabelle Ewing (Perth): I have listened with interest, in particular to the exchanges about the recent lobbying and the concerns of some members of the PCS and increasing numbers of pensioners. Is the Minister saying that there is no foundation to the concerns that have been expressed by this union? Are greater resources required to implement the kinds of schemes that the Minister was talking about? If so, will those resources be made available?

Mr. McCartney: The hon. Lady is trying to draw me into discussions with the PCS in a different way.

I can only say that the resources are available in spades for the new Department, as the creation of the Pension Service and Jobcentre Plus shows. It is the biggest investment in the welfare state—in its structure, its communications, its staff and staff well-being, in their working environment and their skill match and mix, and in their change of skill mixes and opportunities. There has never been a better time and place to work in the public service than there is now at the Department for Work and Pensions, and we intend to maintain good working relationships, particularly in the aftermath of the correct decision by the union to accept the decision.

The offer with regard to Jobcentre Plus was made some time ago. It is about working with staff, and staff at a local level working with the local community and other groups. The creation of the Pension Service is a good news story all round for both staff and older people.

The MIG take-up campaign was pooh-poohed. One complaint was that it was a waste of public money and was only an attempt by the Government to promote their policies. There is nothing wrong in doing that if such policies enable people to get out of poverty. Anti-poverty is a reasonable policy to promote. It was also said that, because of the complex nature of the initiative, older people will not apply for it. Both complaints were wrong.

Patrick Mercer: If that is the case, why are only a quarter of those eligible claiming it?

Mr. McCartney: That is not the case. I accept what the hon. Gentleman is saying in the sense that more people are entitled to the minimum income guarantee than those are who are receiving it. That is why we are trying to improve the uptake of MIG in advance, after which time we will try to improve the uptake of pension credit. We are not arguing about that. A legitimate question is how we will sustain a campaign, which is why I have explained the first part of the phased programme.

The substantial MIG campaign resulted in more than 128,000 additional individuals receiving it. On average, they are receiving £20 a week more than they received before the campaign. The interesting aspect is that, if we provide older people with access to a friendly environment, they will apply for their entitlements. They will use the telephone. They will

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respond to specific campaigns in the community. It will not be a system in which older people will not take part. Increasingly, they have a great deal of knowledge and want to have such relationships within the community. People now apply by telephone for their basic state pension. The system will be so easy. Let me leave aside those who will benefit immediately and who are already on MIG. They will be transferred automatically to the system and will not have to do anything, and rightly so. In the four months running up to retirement, when people can make applications for their basic state pension—as they do now—they can apply at the same time for pension credit.

There will be two elements to the basic income from the state that people receive on retirement. That will be a major change for the good. Because of the new technology and the new skill mix at the Pension Service, application can be made by telephone. If people do not want to do that, we can provide home visits and other environments in which applications can be made. We will give older people a choice. Under the old system, they could either visit an office and sit in an environment that they did not like or sit at home and receive nothing, because no one bothered whether older people made applications. That situation will change dramatically. I am talking not about individuals, but the bureaucracy of the system.

When the system operates effectively as an advocacy organisation on behalf of older people, matters will be transformed immediately. I am not exaggerating about the cultural and organisational change that will take place. Five years from now, when compared with the new pension system, the old system will not be recognised. There will be a five-year rolling programme of improvements. As people come to retirement age, they can make application for pension credit by telephone. They can receive basic information. We have had a debate for an hour and a half. There is a ready reckoner on the back pages of the pension proposals. I am not saying that matters are easy, but we will be providing simple and quick access to information.

The stress of making an application under the old system will be taken off individuals by the state, which will act on their behalf. The system will be vastly different from the old-fashioned ways of communicating with older people, different from the days of the poor law and different from the complex systems that operated in the '50s, '60s, '70s, '80s and the early part of the '90s when the income support system was made up of complexities. Each system was another layer of bureaucracy and regulation. Some layers were added for the best of reasons; some were added to undermine people's access to benefits. Whatever the reason, we inherited huge complexities. The purpose of the Bill is to get rid of as much complexity as possible on behalf of older people.

A question was raised about women. I say from the outset that I have robust, open and frank discussions with older people's organisations about whether the current state pension system is beneficial to every citizen in the country. A range of people paint the rosy picture that all we need to do in order to resolve everything and end poverty overnight is to add extra

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cash—£2 billion, £3 billion, £4 billion or £5 billion; whatever case they want to argue for—to the basic state pension.

Of course, the problem with any public or private pension system is that it is a compromise. The compromise of the state pension system was worked out by liberal academics and left-wing Labour politicians as we left the '40s and moved into the '50s. It was designed using that fact that men coming out of the war years had an average life expectancy of 61 years—they qualify for the pension at 65.

For a range of reasons, the vast majority of women did not have a work record. That began to change only after the war. Women were not entitled to a basic state pension; they had to rely on a marriage. If a woman was not married—large numbers were not—she was on her own. Of course, the system did not take account of people's caring responsibilities and intermittent work records. The only universal thing about the basic state pension was that everybody had the right to apply for it. However, nobody had the right to benefit from it. If we are to break into the cycle and deal with poverty and the fact that we have a system that is discriminatory, we must be serious about the changes that we make.

The biggest recipient group is women. Many women have small occupational pensions and will benefit from the reward. About 300,000 single women over 65 have a form of occupational pension and are eligible for the minimum income guarantee, and 92 per cent. will be rewarded when the pension credit is introduced. A further 400,000 women outside the range of MIG will become eligible for the rewards. Over 700,000 single women will be rewarded for their savings because of the pension credit. The largest recipient group of pension credit—over 53 per cent. of people—will be single women. They will be the greatest beneficiaries of the change. We are challenging the structure of the old basic state pension, which ruled out so many women from receiving it.

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