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Payment Fraud and Error

9. Mr. Stewart Jackson (Peterborough) (Con): What steps he is taking to reduce fraud and error in relation to income support, jobseeker's allowance and pension credit; and if he will make a statement. [113155]

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): We have made significant progress in reducing fraud and error in income support, jobseeker’s allowance and pension credit. In fact, fraud in income support and jobseeker’s allowance is at the lowest level ever recorded; it is down by almost two thirds from 1997-98. We are determined to reduce both fraud and error even further, and we will publish our strategy for reducing error in the very near future.

Mr. Jackson: The Government admitted at the end of last year that in the past three years, due to fraud and error, they wrongly paid out £13 million in benefits to prisoners, and they also admitted that the problem is getting worse. Is that a result of fraud, incompetence, or a combination of both?

Mr. Plaskitt: The figure to which the hon. Gentleman refers relates to estimates of overpayments, accumulated over three years. In his allegation about overpayments to prisoners, he overlooks the Department’s success in identifying overpayments and recovering them.

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Mr. Brian Jenkins (Tamworth) (Lab): My hon. Friend will realise that there are different performance levels in different regions. What action is he taking to ensure that best practice, and therefore the lowest error and fraud rates, are rolled out across the country and become national practice?

Mr. Plaskitt: My hon. Friend makes a good point. If we consider the performances of individual offices across the country, especially in respect of official error, we find different levels of performance, as he says. The Department is trying to put in place a twinning arrangement between the best performing offices and those that are still not performing as well as we would like, in order to ensure the spreading of best practice around the system. I am confident that that will help us to make even more progress in reducing error.

Mr. David Ruffley (Bury St. Edmunds) (Con): The total cost of customer fraud and error for the three benefits in question alone is over £500 million a year. A staggering £100 million a year of that is down to people claiming to be single, when they live with a partner. That is because the system sends the message: “Pretend to be single, and you’ll get much more benefit than you would as part of a couple.” When will the Minister get a grip on that dysfunctional system, and end the damaging discrimination against couples, both married and unmarried?

Mr. Plaskitt: That is a bit rich coming from the Opposition. I remind the hon. Gentleman that, for the benefits concerned, the amount of fraud was £850 million in 1997, but it is now £250 million. The figure for official error was £280 million, but it is now £230 million, so right across the piece, on fraud and on error, the Government have made far more progress than was ever made under the previous Administration, and we will continue to do so.

Winter Fuel Allowance

10. Mr. Mike Weir (Angus) (SNP): What recent discussions he has had on extending the winter fuel allowance. [113156]

The Minister for Pensions Reform (James Purnell): The Government keep all tax and welfare policies under review and any changes are considered as a part of the normal Budget and spending review processes.

Mr. Weir: I thank the Minister for that answer. He will be aware that a coalition of charities called for an extension of the winter fuel allowance to those people under the age of 60 who are particularly vulnerable in cold conditions and who receive long-term benefits. Indeed, the Government’s own energy review accepted that there was a problem in that area. Has the Minister pressed the Chancellor to use some of the massive £1 billion increase in VAT receipts, arising from the increase in fuel bills over the past year, to extend the winter fuel allowance to such groups?

James Purnell: That is not my ministerial responsibility, so it is not my job to do so. The key things are that recent falls in wholesale prices should be passed on to customers soon and that we protect the
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most vulnerable. I remind the hon. Gentleman that in 1996, only £60 million was spent on the problem, but now more than £2 billion is spent on it. I am sure that he welcomes that.

David Taylor (North-West Leicestershire) (Lab/Co-op): Will the Minister congratulate the excellent regional and county newspaper, the Leicester Mercury, on its campaign to highlight the fact that, given the inflation in energy prices, the winter fuel allowance buys rather less fuel than it did when it was set? It has urged county MPs to make a submission to the Chancellor—possibly the future Prime Minister—and I have agreed to do so. Will my hon. Friend allow his signature to be added to my letter?

James Purnell: I think that I would probably have to resign from the Government if I did that, so no, I will not give my hon. Friend that promise. The winter fuel allowance has increased far faster than inflation and energy prices. It was £20 when it was first introduced, but it is now over £300 for people over 80, which is a much faster rise than the increase in utility prices. The key thing is that the cuts in wholesale prices are passed on to customers, particularly the most vulnerable, as soon as possible.

Pensions Bill

11. Mr. Andrew Mackay (Bracknell) (Con): What recent representations he has received on the Pensions Bill. [113157]

The Minister for Pensions Reform (James Purnell): We published the Pensions Bill on 29 November. We have received, and continue to receive, a wide range of representations. We have also met, and continue to meet, a wide range of stakeholders to discuss our proposals.

Mr. Andrew Mackay (Bracknell) (Con): What discussions has the Minister had with the Chancellor of the Exchequer about people who have made voluntary national insurance contributions and will not benefit from the new arrangements in the Bill? Is there not a strong case for those contributions to be refunded?

James Purnell: We have worked closely with Her Majesty’s Revenue and Customs on the issue. From the moment that they were put into the public domain, we wrote to people alerting them to the proposals, which appeared first in the White Paper and are now in the Pensions Bill. Obviously, we cannot take Parliament for granted and start to change the rules before the law is changed. We must change the law first, and that is the stage at which we will be able to make the change that the right hon. Gentleman suggested. The precedent, under both the previous and present Governments, is that contributions paid at the time should not be refunded, otherwise every time that we introduced a social security policy change we would have to make changes backdated many decades.

Andrew Miller (Ellesmere Port and Neston) (Lab): Will my hon. Friend accept a representation from me, and agree not to set any artificial capping on pension
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fund surpluses, as introduced by Nigel Lawson in the 1986 Budget? Does he not agree that that was the beginning of a difficult period for pension funds, and that such changes should be avoided?

James Purnell: My hon. Friend is right. That restriction on surpluses has, in fact, been removed by the Government. He is right, too, that those pension trends have been under way for many years. The number of people in occupational pension schemes fell under the previous Government, and that has been the case, too, under the present Government. It is important that we work on a policy to make sure that everyone has access to employer contributions to their pensions, and that is exactly what we are doing through personal accounts.

Child Support

12. Mr. Tobias Ellwood (Bournemouth, East) (Con): What representations he has received on the Child Support Agency White Paper. [113158]

The Secretary of State for Work and Pensions (Mr. John Hutton): Following publication of the child maintenance White Paper on 13 December, a formal consultation is now under way that will end on 13 March. A report will be published following the end of the consultation detailing the representations received. As of 5 January, we have received 49 representations.

Mr. Ellwood: I am grateful for that reply, but the reforms are rather late in the day. More than 750,000 child support cases remain unresolved, and £3.5 billion of debt is outstanding. How will the reforms improve a system that has been dormant for so long?

Mr. Hutton: The hon. Gentleman should look at the White Paper, where he will find the answer to his question. The reforms will work in two ways. First, £120 million has been allocated to the operational improvement plan. The money is already going in, and improvements have been made. The backlog to which he referred, for example, has been reduced. Secondly, in the long term, the move to a system in which parents are encouraged to reach voluntary agreements on child maintenance, together with a more generous maintenance disregard for income support purposes, will produce a much more efficient and effective child support system, as well as one that is better administered.

Welfare to Work

13. Mr. Graham Allen (Nottingham, North) (Lab): What progress has been made in implementing city strategies on welfare to work. [113159]

The Minister for Employment and Welfare Reform (Mr. Jim Murphy): I am delighted to say that the city strategy pathfinders have now submitted their delivery plans. We are considering all the plans, including Nottingham’s, my hon. Friend will be pleased to know, and will make announcements shortly.

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Mr. Allen: I hope that the House will forgive me for teeing up this month, as in previous months, an opportunity for the Minister to let the House know about the flexibilities in the welfare to work scheme. As the Prime Minister, the Secretary of State and the Minister have all underlined, it is important that such schemes are allowed great local and personal flexibility, not least in the ability to carry over savings that have been made under the welfare to work scheme. Will my hon. Friend inform the House whether any progress has been made in the past month?

Mr. Murphy: This is the third month in a row that my hon. Friend has doggedly persisted in asking that important question. I can confirm that during the Christmas and new year break, officials and I have been looking at the detail of the submissions from city strategy consortiums, including proposals to devolve resources and proposals for local branding and more flexibility in training. It is an important package of requests, and our approach is that the city strategy will be an important devolved platform for the delivery of not only these plans, but an increasingly localised and personalised welfare state over future years.

Means-tested Benefits

14. Mr. Alistair Carmichael (Orkney and Shetland) (LD): What discussion his Department has held with interested parties on the number of people likely to be subject to means-tested benefits under the Government’s state pension reform proposals. [113160]

The Minister for Pensions Reform (James Purnell): We have discussed state reform proposals and the outcomes with a wide range of interested parties.

Mr. Carmichael: It is estimated that up to 45 per cent. of people will still qualify for pension credit, a means-tested benefit, by 2050. How can people be encouraged to save for retirement, when it seems that means-tested benefits will remain such a central part of the Government’s future pension strategy?

James Purnell: I do not think that any party in the House has a proposal to abolish means-testing in the system entirely. The proposals will reduce the level of means-testing to about a third. We are confident that those are the right figures. The proportion of people on 100 per cent. withdrawal rates is much lower now than under the previous Government, so real progress has been made. We believe that personal accounts will be a very good way for people to save.

Leader of the House

The Leader of the House was asked—

Wars: Parliamentary Approval

20. Mr. Graham Allen (Nottingham, North) (Lab): What representations he has received on proposals for requiring the House’s approval for going to war; and if he will make a statement. [113138]

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The Leader of the House of Commons (Mr. Jack Straw): I receive many informal representations on this matter. In their November response to the Lords Constitution Committee report “Waging War: Parliament’s Role and Responsibility”, the Government said that they were keeping their policy in this area under review. I think the whole House will agree that we have to ensure at all times and in all circumstances the safety of our service personnel, but subject to that and to emergency situations, I cannot conceive of a situation where the Commons should not have a key role to play in decisions in respect of going to war.

Mr. Allen: The Leader of the House knows that since the beginning of the Iraq war, members of parties in all parts of the House have signed Remaining Orders which highlight the difficult situation facing any Government in consulting any legislature in any democracy about going to war. Will he take it from me that many of us appreciate the thought that he is giving to the matter, and that there must be some sort of formal settlement—some sort of procedure—which involves the Executive having the flexibility and the nimbleness to respond to aggression whenever necessary, and which recognises the needs of a democracy to ensure that a legislature can at least endorse that very important decision to take a country to war?

Mr. Straw: In return, I thank my hon. Friend for the seriousness and care that he is taking on the matter. When I used that phrase, I was in many respects echoing the words of my right hon. Friend the Prime Minister before the Liaison Committee in early February last year, when he said:


That is in practice the convention that we have established. The issue remains whether that convention should be formalised or should be left, as many conventions are, as conventions.

Mr. Douglas Hogg (Sleaford and North Hykeham) (Con): I, too, welcome what the Leader of the House has said. However, will he forgive my saying that it is not a convention yet? We need a formal expression of what he has said either by way of a clear convention in this House or by way of statute.

Mr. Straw: I think that it is becoming a convention. In a different context, the Joint Committee on Conventions has said that conventions are, by definition, difficult to codify. However, the Lords Constitution Committee has ruled out the possibility of a statutory arrangement and has suggested that the situation should be bedded down by way of a resolution of each House or particularly of the Commons, since it would be for the Commons to make the final decision. We are looking at that matter with care.

Andrew Mackinlay (Thurrock) (Lab): I welcome what the Leader of the House has said, but surely it is implicit that as well as there being an affirmative resolution of the House of Commons to deploy troops, there needs after some years of deployment to be a
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reaffirmation of that decision by a vote in this House. And if we ever have to do this again, there needs to be an institutional mechanism by which this House has direct access to the security and intelligence services, because such information should not be given to us by Ministers.

Mr. Straw: They are two different things. There has been no military action, approved by this House or not, that has not been subject to the most extensive inquiry afterwards, which is the case with Iraq. Although my hon. Friend is not terribly keen on the Intelligence and Security Committee—

Andrew Mackinlay: It is not a parliamentary Committee.

Mr. Straw: In one sense, it goes one better, because its establishment was agreed by Parliament and was enshrined in an Act. As anyone who has appeared in front of the Intelligence and Security Committee will tell my hon. Friend, the Intelligence and Security Committee operates as least as effectively as a Select Committee.

Mrs. Theresa May (Maidenhead) (Con): I, too, welcome the thoughtful way in which the Leader of the House has responded to the question. However, the decision to go to war is just one of the general prerogative powers exercised by Ministers. Will the Leader of the House accept that there is widespread concern that we need to redress the balance of power between Parliament and Government and that the balance of power has tipped too far in the Executive’s favour? If so, why have the Government so far refused to act on the recommendation of the Public Administration Committee, which stated in 2004 that the case for the reform of prerogative powers is “unanswerable”?

Mr. Straw: Quite rightly, prerogative powers have been reduced over time, because they go back to the period before the Glorious Revolution of 1688 and are, by definition, rather anomalous. There are some areas in which those powers are easy to replace by statute, which has been going on. The powers exercised by prerogative are subject to much greater constraint by statute now. For example, I refer the right hon. Lady to the Human Rights Act 1998, which has made considerable statutory inroads into the previous exercise of discretion by Ministers. The situation happens to be more difficult in other areas. It is important to put the power of this place into proper perspective. In a recently published study, a former parliamentary clerk has pointed out that the powers exercised quite properly by this House over Governments are now far more extensive than they were, for example, 40 or 50 years ago.

Mr. David Heath (Somerton and Frome) (LD): We know what the Leader of the House really thinks, because in 1994 he said that

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