Social Security

I am grateful for your guidance, Mr. Deputy Speaker. I was simply trying to highlight that the winter fuel payment is an important issue for pensioners, who are also in receipt of many of the other benefits that we are discussing today. It is important that we work to get extra income to pensioners across the board. As has been said, the basic state pension should be uprated in line with earnings. The importance of that is highlighted by the fact that many of the costs that pensioners face—not least energy costs—are increasing dramatically. The fact that we have seen again today scandalous and excessive energy company price rises, which pensioners will pay out of their pension credit, their basic state pension and their winter fuel payment, makes the point—which I hope the Minister is taking on board—that the Government must reconsider the current amount of the winter fuel payment. As has been said, pensioner poverty is an important issue. It would be churlish not to recognise that, over the past 10 years, there have been improvements in terms of tackling it, yet the take-up of benefits is still a major problem. The Government have introduced the pension credit, a means-tested system, to top up the basic state pension, but up to 1.7 million pensioners do not claim the pension credit to which they are entitled. Likewise, many pensioners are entitled to council tax benefit, which is also dealt with in the orders before us today. In the past 10 years, that benefit has increased by 87 per cent. yet it is claimed by only 53 per cent. of pensioners who are entitled to it. Today's uprating statement is a huge missed opportunity in terms of pensioner poverty in that it fails once again to announce the uprating of pensions in line with earnings. During the passage of the Pensions Act 2007, we argued that that should be introduced this year. It has not been. The Government have still not even said when they intend to do so; it might be in 2012, or it might not be until as late as 2015. As the hon. Member for Newport, West rightly observed, that means that the value of the basic state pension will fall still further behind average earnings. I have made the point before that that amounts to a serious erosion of pensioner incomes, particularly for those who do not claim pension credit because it is complex or because they find means-testing intrusive. Those are understandable reasons. We should move towards having a much higher basic state pension. The objective should be a citizen's pension, so that every pensioner has, on the basis of residency, a basic state pension that keeps them out of poverty. That is, I believe, an obligation of the state, and the citizen's pension is the means to deliver it in such a way that we can ensure that it goes to every pensioner who needs that money. It is also worth noting that the uprating of pensions applies only to some pensioners. It applies to pensioners in this country, of course, and to some British pensioners who have moved abroad, but it does not apply to many British pensioners who have moved abroad to live in certain countries, such as Canada, Australia and New Zealand. There is a genuine injustice in that, which the Government have recognised in previous debates but have done nothing to address. Again, the Minister needs to examine that issue. We are dealing with a number of benefits, rates and so on relating directly to children. Worryingly, it is looking ever more difficult for the Government to meet their child poverty targets, because child poverty rose in the last year for which we have figures. That is appalling, particularly given that poverty has been entrenched in many families for generation after generation. I would like child benefit to be used much more directly to address that problem; indeed, we have put forward proposals for increasing child benefit so that more families with children can be helped out of poverty. As for the tax credits system, although that system has benefited many families, it is equally true that 40 per cent. of families claiming tax credits have received overpayments or underpayments and a great deal of hardship has been caused, particularly by the overpayments. About 2 million families were overpaid tax credits in the last year for which we have figures, creating a financial rollercoaster and costs, and in many cases causing hardship. The system is supposed to help people in work who need their income supplemented to get them out of poverty. That is why moving to a system of fixed awards is the right way to go, as opposed to the present fluctuating system. I hope that the Minister will pass on my comments to his Treasury colleagues, who are responsible for the tax credits system although we are dealing with its uprating today, so that a degree of stability, which is vital for so many families, can be introduced into it. Today's uprating statement does little to address the high marginal deduction rates that many people still face. Although the number of people who, when they get into work, face marginal deduction rates equivalent to tax rates of more than 100 or 90 per cent. has been reduced, a substantial body of people in the middle face marginal deduction rates ranging from 60 to 80 per cent. That is unacceptable. If the Minister were to say that he wished to introduce an income tax rate for higher earners of 60, 70 or 80 per cent., there would rightly be howls of protest. When the tax credits system interacts with the benefits system—housing benefit, council tax benefit and so on—and people keep only 10, 15 or 20p of every extra pound they earn, that system should be seen as no more acceptable for people on low incomes than higher-rate income tax would be for people on high incomes. One further pressing issue is missing from this statement, namely the way in which housing benefit works, particularly for young people under 25 who still face the scandalous single room rate. That rate means that people below that age receive a lower level of housing benefit. That causes hardship and difficulties, not least for young people starting out in life who have left home or who are trying to get out of care. It is important that the Government do not lose sight of that problem. Ministers have been repeatedly pressed to drop the single room rate, which children's organisations, anti-poverty organisations and housing organisations, such as Shelter, protest against. If the Government are serious about dealing with poverty among young people, they must directly address that issue. I obviously welcome the overall uprating of benefits. However, there are serious problems in our welfare system relating to adequacy, complexity and the incentives for people to get back into work—those incentives must be a crucial part of the welfare system. The Government have a very long way to go before they can claim to have met the aspirations that the Minister set out in his opening speech.