Age-Related Payments Bill

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Malcolm Wicks: Does the hon. Gentleman recognise that entitlement to council tax benefit has increased because of the development of pension credit?

Mr. Webb: There are two main reasons.

Malcolm Wicks: The hon. Gentleman was coming to that.

Mr. Webb: Indeed.

There are two main reasons why the number of pensioners on council tax benefit has increased. It need not have done. One is that the thresholds increased when the pension credit was introduced, which further indicates the complexity of the Government's means-testing approach. The other is that council taxes have increased. I forget the exact figure, but it something like 70 per cent. under this Government. They should not claim too much credit for driving more people into poverty and the need to claim council tax benefit, then say that that is a policy triumph. Under this Government the proportion of pensioners who get the

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help with council tax that the state believes they need has fallen. That is critical. The take-up rates, as a percentage of those who are eligible, have fallen.

10.30 am

Miss Anne Begg (Aberdeen, South) (Lab): I am interested in what the hon. Gentleman is saying. More pensioners are eligible for council tax benefit in Aberdeen, because the new Liberal council has increased the council tax way above inflation, with the second largest increase in Scotland. Would not it be better if information about council tax benefit were sent to people with the council tax information? That is much more appropriate than what is done now, because it is easier for people to relate the benefit that they might receive, or the claim that they might make, with the tax.

Mr. Webb: I have no problem with that. I suspect that the vast majority of local authorities do that. In the glory days in South Gloucestershire, when the council was run by the Liberal Democrats, council tax information was sent out with the bills. That is right. However, the system is not working, and we want one that works.

The £100 payment is testimony to the fact that council tax benefit is not working. If the council tax benefit system worked, everybody who needed help with council tax would get it, and we would not need a separate bureaucratic system to deliver a separate payment to poorer pensioners. Then we could have a decent pension and a decent system of help with council tax. Obviously, we would prefer to scrap the council tax, but that is beyond the scope of the amendment. We need to make council tax benefit work for as long as we have to put up with council tax.

Amendment No. 11 would ensure that people are reminded about benefits when they receive the payment under the Bill, which is allegedly something to do with council tax. Given that that would come more or less in mid-year, or towards the end of the calendar year, or two thirds of the way through the financial year, it would be a good complement to the sort of information that the hon. Member for Aberdeen, South (Miss Begg) said should be sent to people at the start of the financial year, or just before it. It will provide a reminder and further information, roughly six months on, which can only help.

Meanwhile, the Bill is trying to redeem the irredeemable. We have an unfair local tax system and an ineffective rebate system, and we need a third payment to deal with those two problems. We are trying, through amendment No. 11, to make the best of a bad job by saying, ''If we must have this ineffective, complex system, let's at least ensure that people claim what they are entitled to.'' I hope that the Minister will accept amendment No. 11.

Amendment No. 13 gnaws away at a slightly different issue. The Bill mirrors the winter fuel payments system, and age-related payments will be delivered through that mechanism. However, there is a problem of small take-up with the winter fuel payment. Two groups are worried. First, there are the men aged 60 to 64, who suddenly became entitled

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through a court case, although we are not talking about that group here, because we are dealing only with the over-70s. Secondly, a small number of people who do not receive winter fuel payments automatically have to make a claim, but fail to do so. We are talking about thousands of people.

Amendment No. 13 encourages the Government to be proactive, because they are failing to get winter fuel payments to thousands of people over 70 in the specific circumstances in which they have to make a claim. Under the amendment the Government would be required to encourage people who fall in that fairly narrowly defined category to claim the payment. That is a rather different take-up point.

Amendment No. 11 is the main amendment because it is meant to tackle the woeful take-up of council tax benefit among pensioners. From what I can gather, the hon. Member for Eastbourne often slips in at dinner parties the fact that council tax benefit has the lowest take-up of any means-tested benefit. I have met people with whom he has had dinner, and they say that he slips that out at every opportunity. That fact is true, particularly among pensioners. Council tax benefit, which is intended to relieve the burden of council tax, is not working. The amendment would at least ensure that a few more of Britain's hard-pressed pensioners would get the help to which they are entitled.

Mr. Waterson: I do not support amendment No. 11, because I agree with two parts of what the hon. Member for Aberdeen, South said. She and I, and a lot of other Committee members, share the problem of having a Liberal Democrat council. In our case, there has been a 45 per cent. increase in its element of the council tax in two years, which is disgraceful. Although, philosophically, I am not a capper, if any council deserved to be capped, it was Shepway district council, which had the highest increase this year of 28 per cent. We all know who runs that council at the moment.

I also agree with the hon. Lady about timing. As part of the laudable attempt to try to improve take-up of council tax benefit, the obvious time to send out a form or leaflet is at the same time as the council tax demand, because that is when people are hit, particularly by a big increase by a spendthrift Liberal Democrat council.

I am sure that the hon. Member for Northavon never goes to anything as frivolous as a dinner party, and I cannot remember trotting out the latest figures for take-up of council tax benefit, as he put it, but it is extraordinary that they show a substantial decrease. The situation is worse than it appears, because within those figures—this is the point at which guests at this fictional dinner party start to see their lives flashing before them—there are other, hidden problems, which I explain on these occasions, such as that older pensioners are less likely to claim than younger ones and that older owner-occupiers are particularly unlikely to claim. I assume that that is because in many

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cases owner-occupiers cannot imagine that they qualify. There is no point banging on about this because it is in the statistics.

It is good that the Government are having another campaign to try to increase take-up, but they are attacking the problem from the wrong end. The real solution is not to have great surges in council tax as a direct result of Government policy.

What the Government are trying to do is absurd. Let us assume for a moment that the average pensioner was not born yesterday—far from it, of course—and fails to see through what the Government are up to. They are not going to be wildly impressed with getting the £100 about eight months after they get their council tax demand. This is another strange feature of the proposal.

Because of the Government and Labour and Liberal Democrat councils, council tax bills for the average band D home have increased by 70 per cent. The typical household pays almost £500 extra a year under this Government. The problem is that that has the greatest impact on pensioners, which is why we are here today, and, as I have explained, that is compounded by the low take-up of council tax benefit.

If we want to help older pensioners and to mitigate the effects of big increases in council tax, why develop a system that does not give them the money until many months later? They get their council tax demand at around Easter, and they get the money at around Christmas. There is no logic to that. It is another example of the Government not having thought things through.

I do not blame the Minister for that. I blame the Chancellor. If he had taken the Minister a bit more into his confidence about what he had in mind, we might not be in the mess that we are in at the moment.

Malcolm Wicks: I am just trying to work out the relevance of all of this to the amendments.

Mr. Waterson: Let the Minister try to do his job properly before he starts trying to do yours, Mr. Conway.

I am trying to explain to the Minister—in words of one syllable or less, because these concepts can be quite punishing—why I do not support amendment No. 11, and why I think that it is bizarre that there will be such a big time lag between council tax demands and payment. That is a simple point.

The Minister has a great wad of briefing that I am sure he often trots out at his own dinner parties. The Minister, the hon. Member for Northavon and I are very sad people; we bore for Britain on these issues because we think that they are important. However, on this occasion I think that the Minister has got it wrong again.

Malcolm Wicks: I will not follow that, because there is nothing to follow. I shall speak to the amendments. Is there a problem with the take-up of council tax benefit? Yes, there is, although I do not discuss it at dinner parties, as I prefer to talk about the prospects for Crystal Palace football club at the weekend.

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Nevertheless, there is a major problem with the take-up of council tax benefit, which is why we are in the middle of a major campaign about it. There are excellent examples of good practice. For example, there has been much success in the Wirral. I shall not spend time describing it, however, because I accept the proposition.

Given that relatively few people might not automatically receive the £100 payment, I accept that we must do everything possible to inform them about it. As part of our campaign for winter fuel payments, we plan to advertise the new £100 payment. I shall not go wider because, as the hon. Member for Northavon said, it is not within our powers this morning , even if we wanted to, to abolish council tax, to introduce a local income tax or to inaugurate a new Gladstone Administration. For good or ill, such matters are outside the scope of the Bill.

The most interesting point that has been made is whether we might use the fact that we will be mailing the winter fuel payment to all pensioners to better publicise council tax benefit. That has occurred to us; it is a useful idea. I cannot promise that we will definitely do it. There may be administrative complications, but I am keen on the idea. If we can implement such practice, we do not need to stop at council tax benefit but can include pension credit and issues relating to energy efficiency. It would not be appropriate to put such information in the Bill, but I hope, given my reassurances, that the hon. Gentleman will withdraw the amendment, although I accept its spirit.

 

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Prepared 25 May 2004