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Baroness Thomas of Walliswood: My Lords, I was most interested in what the Minister said about international examples in respect of the benefit to be obtained by educating women. I have had some experience of that myself in one of the most deprived countries in the world. Does the noble Baroness agree that one way to ensure that individual women get the messages that they need to receive for the improvement of the health of their families is to work at the lowest level, on an absolutely face-to-face basis, with individuals? Can the Minister tell us what aspects of the Government's programme would respond to that need; in other words, to what I would call the "outreach element" of such measures?

Baroness Hayman: My Lords, a range of activities in the White Paper would respond to that particular need. Some of them relate to the development of healthy living centres, not as buildings and bricks and mortar but as regards inter-community access to health information. It is fascinating to see the uptake of NHS Direct from women, including from women with young children; indeed, an enormously high proportion of callers are looking for information and advice.

Most of all, I would answer the noble Baroness by focusing on the role of community nurses, health visitors, school nurses and midwives. They gain great respect from the people with whom they deal. They have tremendous opportunities, often at very crucial times in people's lives, for making interventions which have real impact. A whole range of areas is important in this respect, although not especially mentioned in the White Paper. I refer, for example, to the provision of prison health services, especially those for women in prison. There is the opportunity to make a difference there. That is also the case in schools, where children can be introduced to the concept of cooking healthily, or to the concept of taking responsibility for their own health--be it sexual health or health in relation to drugs and alcohol--or the health of others by knowing the fundamentals of first aid. Those are very individual people-oriented activities, which can make an enormous difference.

Welfare Reform and Pensions Bill

5.25 p.m.

House again in Committee.

Baroness Castle of Blackburn moved Amendment No. 44AB:

After Clause 18, insert the following new clause--


(" . In section 44(4) of the Contributions and Benefits Act, for "£66.75" there shall be substituted "£75".")

The noble Baroness said: This amendment stands in my name and that of my noble friend Lady Turner. As

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Members of the Committee will soon appreciate, this is an extremely modest amendment. I quite genuinely hope that my noble friend the Minister will take it seriously in the light of its potential for evening-out the pensions provision in this country.

The amendment provides that the basic state pension, which we know is payable as of right to its contributors, shall be raised from its present figure of £66.75 to £75 a week. We have done this because the basic pension has slipped back badly since the days when Labour were in office in 1974. The introduction of the earnings link by that government for the operating of that basic pension meant that, by this year, the pension would be worth £90.50 per week. It would have been so if the noble Baroness, Lady Thatcher, had not abolished that earnings link.

I am not pretending that any government can afford to restore to pensioners at a stroke the whole of the extra money of which they were then robbed. We are not asking for that; the amendment does not bring us anywhere near to restoring to pensioners the figure that they would have had. Indeed, it only goes one-third of the way. We have done this because we are realists. We know that governments have economic difficulties and that they must act economically realistically. But this is not just an arbitrary figure that we have picked out of a hat. As my noble friend the Minister well knows, it is the figure that the Government say ought to be paid when basic pension additions are means tested.

The Government have said that no pensioner can be expected to live on less than that figure, but they are not prepared to say that pensioners should, as of right, have at least £75 a week restored to them. We are not talking about the £90.50 that they would otherwise have received; we are talking about a mere £75 a week. We have taken the Government's figure and this is what should be paid to pensioners under a means-test assessment of pensioners' needs. Of course, it would be theirs of right.

The Government have always said that their aim is to target what money is available to those who need it most; in other words, to the poorest pensioners. But I remind the Minister that by the Government's own admission--by some of her own admissions--the poorest pensioners are not getting the £75 to which the Government have attached the income support figure. Why is that? It is because on the Government's own figures 1 million pensioners have refused to accept, or apply for, the income support to which they are entitled. This quite rightly alarmed the Government and alarmed the noble Baroness, Lady Turner, myself, and I am sure many other Members of this Chamber. These poorest pensioners are some of the most elderly, the most frail and the most in need of the money. Why are they not claiming it?

Last year the Government told us that they would inquire into this and try to solve the puzzle of why 1 million of the poorest pensioners in this country were not claiming the £75 a week income support to which they were entitled. Last year in another place Harriet Harman, then Secretary of State for Social Security, told the Chamber that the Government took

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this problem so seriously that they were going to appoint a whole team of personal advisers who were going to sit down with each individual pensioner and help them to fill in the forms. That must be because the pensioners could not fill in the forms. Having seen some of those forms, I would not be surprised if that was part of the answer to the mystery. But where are those personal advisers? Are any in post yet, and what would be the cost?

What staggers me is the way the Government are always ready to find money to prevent some people getting it. They are prepared to pay an extra £5 per recipient per week for the administration and means-tested benefits over and above what it costs to administer the basic pension. That is to stop some people getting it as a right although they may have contributed to it. We on this side--most of us anyway--think that the Government have a contract when they set up a contributory scheme and tell people that they are obliged by law to contribute to their upkeep when they are old. If people have fulfilled their part of the legal obligation, the Government must fulfil their part; namely, to give them that for which they thought they were contributing. But some of them are not to get that, so that--the Government say--all the money can go to the poorest.

I asked some questions about this in the Chamber at an earlier stage. I asked what the Government are doing to discover the answer to the mystery. I have no doubt at all what the answer is. Part of the answer is that even poor people have their dignity. Even poor people do not like the stigma of dependency and of charity. They like to feel that they have earned something as of right. I said that I thought that was part of the answer; but if the Government had a better one, why did they not tell us what it was? We were told last year that the Government were setting up nine pilot schemes to study what was preventing people applying. I hope that today the Minister will tell us what has happened to those pilot schemes. The reports will, of course, be published. I hope that we will not just be given the Government's spin-doctored analysis of the findings. Let us see what those pilot scheme reports say. We are not children. We have a right to judge for ourselves what the answer is. Personal advisers have vanished into thin air. Pilot schemes lie shrouded in mystery. We do not know what the Government are spending on them. We do not know when we will get them. Questions were asked in another place--I think it was yesterday--about what was happening and the answers were astonishingly evasive.

I should like something definite from the Minister this evening. We are told that we cannot afford it and that it is fine having fine principles but that if we are to spend money wisely, it must be "targeted". Incidentally, that was a favourite word of the noble Baroness, Lady Thatcher. She must be listening to it with delight. We shall be told perhaps by the Minister--I hope not, as this is getting a little tattered and irrelevant--that to restore the pension to the level it was before the earnings link was dropped would be prohibitive and that the Government have better uses for the money. But I am not asking for that. Will the Minister please not answer

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with one of her prepared solutions? Will she answer my amendment which states that we want pensioners to have £75 a week as of right? I shall tell her where the money could come from. The Government Actuary has published a recent report--I have forgotten the exact date--about this year's uprating of the basic pension. The Government Actuary announced that the National Insurance Fund had a surplus over and above what the Government Actuary thought was necessary of no less than £5.9 billion. So how dare the Government say that the money is not there?

Let us not forget that that money was contributed by the very people who are now asking the Government to fulfil their part of the bargain, or at least a modest section of it. That £5.9 billion would more than cover the cost of what this amendment is seeking. In fact, it would take only half that £5.9 billion to increase the basic pension to £75 a week. So how can anybody who believes in restoring human dignity to everyone not want to see those million poorest pensioners brought into the glow of this financial improvement? How can anybody who lectures us about the need to get rid of the dependency culture dare to insist that we have to make that £75 a week means-tested because we cannot afford it? I hope I have convinced the Minister that we can and that she will therefore accept this amendment gladly. I beg to move.

5.30 p.m.

Baroness Hollis of Heigham: As the noble Baroness has explained, the purpose of the amendment is clear. It would immediately increase the basic state retirement pension to £75. As the pension paid to a married woman on the basis of her husband's contributions is linked to the rate of the basic pension, this would also be increased to £45, giving a total rate for a couple of £120 per week. As my noble friend said, this would increase the pension to the level of the minimum income guarantee which this Government introduced to help the poorest pensioners from this April.

I think the Committee will understand why the noble Baroness tabled this amendment. But I am sure that the Committee will also understand that the key problem with this amendment is that it will give extra money to people who do not need it. Much of the money would go to well-off pensioners--many of whom, I suggest, are sitting in your Lordships' House today--who do not need more--and at a time when we all know that there are many pensioners in Britain who need help far more.

Given that the purpose of the amendment is to increase the basic pension to the level of the minimum income guarantee, while better-off pensioners would gain, the poorest--those on income support--would see no gain at all. As my noble friend said, we would be spending some £3.8 billion--and every penny of that would be going to better-off pensioners and not one penny would be going to the poorest pensioners, who currently get their income topped up to £75 a week in any case.

My noble friend was contemptuous of the word "targeting". I can understand that; the word has a history with which many of us feel unhappy. But it was her

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noble friend, my noble friend and her colleague in the first Labour government of 1945 who said that socialism is about priorities. Targeting is about priorities; and priorities are about targeting. If my noble friend believes in priorities, she must accept that there comes a time when one has to prioritise, to target, and to put money where the need is greatest; and that is with the poorest pensioners.

As a result of the minimum income guarantee, from April single pensioners who have savings of less than £3,000 and an income below £75 a week have their income topped up to the £75 a week level. The guarantee is higher for older pensioners: £77.30 for single pensioners over 75, and £82 for single pensioners over 80. As a result, about 65,000 pensioners who have been just above the level of income support until now are eligible for this extra help for the first time.

Perfectly properly, my noble friend put two specific questions to me. The first question was what has happened to the missing poorest pensioners. No one in the Committee would dispute that their needs are greatest, but we are not getting the response for the take-up of income support that we wish. Currently, some 76 per cent of eligible pensioners claim the income support entitlement; we should like to see that figure considerably improved.

Our research from the nine pilot studies and from the experience of personal advisers shows that part of the reason for lack of take-up is that many more pensioners than we anticipated have capital which takes them above the capital rules, even though their income may be below income support levels. As a result, about half a million pensioners have capital, and half of them have capital of over £20,000. In other words, it is their choice; it is an understandable choice--they are choosing not to draw on their capital to make good their income. But their capital disqualifies them from income support because the income support rules cut out at £8,000 for a single pensioner. So the first reason is that many pensioners have substantial capital which they are reluctant to touch. But it is there for a rainy day and it could be argued that it is appropriate to expect them to draw on their capital rather than to expect taxpayers to raise that income.

We are aware also--my noble friend is right--that there are problems about complexity; that there are problems about ignorance of the benefit; and that there is a dislike of officialdom. People have sometimes applied in the past for a different benefit--for housing benefit or the like--have been rebuffed and feel that there is no benefit available to them. That is why we have been working to see whether key events, trigger events--for example, reaching a certain birthday or receiving attendance allowance and so on--will allow us to piggy-back entitlement to income support on those key events.

We expect to publish the pilot results that my noble friend asked for in the autumn. We shall look at the implications at that stage. I hope very much that we shall have my noble friend's experience to draw on when we come to see how best we can encourage take-up.

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My noble friend's second question was that the £3.8 billion, which would be the cost of her amendment, could be afforded because of a surplus in the National Insurance Fund. The independent Government Actuary recommends that the fund should carry a minimum balance at all times of no less than 17 per cent of benefit expenditure. That effectively works out at about £8 billion. The current surplus is about £5 billion. Given that, I hope that my noble friend will accept that we are not inappropriately storing up money which could be distributed to pensioners across the board, irrespective of their income, irrespective of their need.

We have also said that we expect to update the level of the minimum income guarantee over time in line not with prices but with earnings, so that the poorest pensioners remain, so to speak, in the slipstream of the general increase of national prosperity, and rightly so. In the Budget the Chancellor announced that in a year's time that will be precisely so. That will mean that another 20,000 pensioners who are at present just above the threshold for income support will become entitled to it.

We believe that these are substantial improvements. We can only make a difference to the poorest pensioners. For example, a pensioner couple over 80 years-old will be more than £8 a week better off in real terms over the two-year period. We can only make this kind of improvement and this kind of difference because we are concentrating the extra help on those who need it most, rather than giving money to those who already have perfectly adequate second pensions.

I know that my noble friend does not agree with the Government's approach. She would like a general increase across the board, irrespective of need. If that happened, we could not at the same time lift the poorest and seek to reduce some of the inequalities between poor and rich that have grown over the past 20 years, particularly among pensioners. We believe that the right way is to target the poorest pensioners--or, in my noble friend's words perhaps, to prioritise the poorest pensioners. We believe that is the right way to help them and I urge the Committee to reject the amendment.

5.45 p.m.

Earl Russell: Before the Minister sits down perhaps I may ask her a question. She put considerable weight on pensioners having savings above the capital limits; can she tell the Committee when those capital limits were last uprated?

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