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13. Mr. Harry Barnes (North-East Derbyshire) (Lab): What assessment he has made of the likely impact on the living standards of lone parents of the continuation of current uprating policies for income support and child tax credit by 2010. 
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): Since 1997, incomes for lone parents in receipt of benefit have risen by more than prices or the cost of living. In April 2005, the child allowance rate in income support for a child up to 11 years old will have been increased by 127 per cent. since 1997. Child rates in income support and jobseeker's allowance are also being increased above inflation in April 2005 in line with child tax credit upratings.
Mr. Barnes: The Government are committed to increasing the child element of child tax credit in line with earnings, but will not that be pulled down in future where lone parents are dependent on income support? The rate is below that of the retail prices index and is based on the Rossi index, which excludes housing, so by 2010 there may be problems.
As I have already said, the child rates in income support are also being increased above inflation. The living standards of lone parents and their children depend not only on the level of benefit or, indeed, tax credit but on our ability to help those parents into work. In deciding the increases in the different elements of
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both income support and tax credits we must find a way of maximising our ability to meet the target of halving, then eliminating, child poverty, and also helping lone parents and others into work. That is sometimes a difficult balance.
The Minister for Work (Jane Kennedy): The success of the new deal for lone parents has been a major contributory factor in the increase in lone parent employment in every region, the reduction in the number of children in workless households and the reduction in child poverty. My hon. Friend might like to know that in Coventry, South, 840 lone parents have participated in the new deal for lone parents, 400 of whom have found work.
Jane Kennedy: I do not have the figures to hand, but I can find them and write to my hon. Friend after questions and once I have had a chance to look at Hansard. However, he may be interested to hear about one lone parent who became involved in the new deal through her work-focused interview. She had previously worked in a factory but, after some discussion, she decided that she was not keen to go back to that employment. Lacking formal qualifications and self-confidence, she felt that there was very little that she could do but, after her experience on the new deal, she has now gained qualifications in literacy and numeracy that have enabled her to accept work as a receptionist.
The Minister for Pensions (Malcolm Wicks): The hon. Gentleman's question is about the future of means testing, but we make no apology for the pension credit, given the fact that, as we heard earlier, it focuses extra resources on people without occupational pensions or a full basic state pension. Such people are often in their 80s, and two thirds of pension credit recipients are women. In future, we hope that people can retire on incomes from occupational pensions, savings and state pensions that would put most of them far above means-tested levels.
Does the Minister acknowledge that, notwithstanding the Government's efforts to improve take-up, 1.5 million people entitled to pension credit are still not receiving it? Would it not be better to allow the state pension to rise by linking it to the level of earnings, as the number of people requiring means-tested benefits would fall accordingly?
Malcolm Wicks: Despite what the hon. Gentleman said, he got the number wrong and I got it right, which will be the theme of our little dialogue. If we put all our resources into raising the basic state pension in line with earnings, over time it would cost a considerable amount. In the immediate periodand I think that that is the policy of Her Majesty's loyal Oppositionit would be better news for men than for women, and for people on the full basic state pension. It would be poorer news for people on only a partial basic state pension, which is why we are focusing our attention on pension credit.
I do not quite understand what the hon. Gentleman's policies are. I enjoy tramping through the New Forest, and often come across wild creatures, ponies and deer. I have never met him there, but no doubt I shall do so at some stage. Neither have I met all the 3,615I repeat, 3,615pensioner households in New Forest, West who receive pension credit. The hon. Gentleman probably knows them all by name, but when he meets them does he tell them that they are victims of a terrible extension
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle):
The Government want all
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pensioners to have a decent and secure income in retirement and to share fairly in the rising prosperity of the nation. Our first priority was to tackle poverty among pensioners. That is why we introduced pension credit, which is providing over £40 a week on average to more than 3 million people and has helped move 1.8 million pensioners out of poverty. We have also changed the rules for carer's allowance so that older carers can claim it and can have access to the additional amount for carers, worth an extra £25.55 a week, paid with pension credit, housing benefit and council tax benefit.
Mr. O'Brien: An ever-increasing number of elderly people are looking after elderly relatives or other elderly people. When they reach a certain age, their benefit can drop, which creates problems for the carer and the person being cared for. If we are to encourage members of the family to look after their parents and relatives, we must ensure that there is no reduction in their income. Some of these people also experience difficulties in receiving attendance allowance. Will my hon. Friend make sure that that situation is not allowed to develop, and will she introduce practices to ensure that people receive the proper reward for looking after elderly people?
To be brief, I think my hon. Friend is referring to the way the overlapping benefit rule operates between carer's allowance and state pension. People's income is never reduced, but when those who qualify for carer's allowance get to state retirement age and start receiving their state pension, they cannot receive both, because technically those two benefits overlap. Nobody's income should go down, even though the overlapping benefit rule applies to carer's allowance and the state pension. There is the carer's premium in the income-related benefitsit is the additional amount in pension creditwhich gives poorer pensioners an extra £25.55 a week, so it is still worth claiming carer's allowance if the person being cared for is in receipt of attendance allowance.
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Mr. Julian Brazier (Canterbury) (Con): On a point of order, Mr. Speaker. Have you received notice of the parliamentary statement that has been widely trailed in the media today on huge cuts in the Territorial Army, at a time when we have hundreds of territorials serving in Iraq and Afghanistan, and they represent the only framework for expansion that the country has for its very small Regular Army? Those cuts are viewed with considerable concern in the country.
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