Social Security

Certainly, there is some truth in what the hon. Gentleman says, and I personally think that we need a range of policies to deal with this very important issue and the scandal of the poorest people paying the most through prepayment meters—a matter that I raised in the House a number of years ago. We could do all sorts of things—for example, with the Post Office card account, the use of which the hon. Gentleman will be particularly keen to encourage. People could be provided with decent information, telling them whether they are getting the cheapest tariff. They should not have to ring up and ask; it should be made absolutely obvious to them—something that the Conservative party is proposing. There is something in what the hon. Gentleman says, but we can do a number of other important things to tackle the issue. I want to deal with fraud and error—a subject that the Minister for Employment and Welfare Reform mentioned when he made the December statement in relation to the order. It is an important issue, because if we were able to deal more effectively with the £2.6 billion overpaid, we could uprate many of these measures more generously. The figures are pretty staggering: £2.6 billion overpaid, and £1.1 billion of benefit expenditure underpaid. That has been going on for a very long time, and it includes money paid wrongly to prisoners, to people who have moved abroad and who were not entitled to it, to people already earning an income through employment and to people already claiming other benefits. The Department is now running a sort of television show, showing some of its inspectors doing very good work. It makes quite entertaining television, but I tell the Minister in all seriousness that £2.6 billion is a very large amount of money at a time of great pressure on public expenditure. Again, I ask her to go back to the Department and discuss the matter with the Secretary of State and her fellow Ministers and to urge that that matter be pushed rather higher up the Department's agenda. We could be more generous with the uprating of a number of these benefits, which, as a number of Members have pointed out already, are not that generous for many of our fellow citizens in great need. I want to consider the issue of the complexity of the benefits system. As I have said, 14 pages of benefits are uprated by the order that we are considering. That is 14 sheets of closely typed A4. The National Audit Office report, ““Progress in tackling pensioner poverty: Encouraging take-up of entitlements””, underlines the fact that complexity is part of the problem when it comes to delivering support to those who need it. It states:"““Many pensioners and those that advise them””—" we must not forget the lobby groups and support groups that help pensioners—"““consider the systems and administrative procedures for claiming benefits to be too complex. In all there are 23 potential entitlements for pensioners, with 36 linkages between 16 of them.””" Our pensioner population will need degrees in higher mathematics to work their way around some of the system. Similarly, the 17th report of the Social Security Advisory Committee, published in 2004, says:"““complexity characterises the entire benefits system...the size, complexity and dispersion of the benefits system, and the blurring of the boundaries over what should constitute its proper role has led to a pervading sense of a loss of cohesion””." Bodies do not come much more independent than the Social Security Advisory Committee. Help the Aged makes a point in similar terms. It says, on benefits for pensioners, that the"““system is so muddled and poorly advertised that even Pension Credit, a widely advertised benefit aimed at some of the poorest older people, is only claimed by just over half of those entitled to it.””" I come to the final subject that I want to discuss. It is incredibly important, and I should be grateful if the Minister would respond to this part of my speech as fully as she can when she winds up the debate. If there are points to which she cannot respond, will she write me a fairly full letter on the subject, and put a copy in the Library? I refer to the thorny issue of what is happening in the national insurance fund. I have great concerns about the assumptions that the poor old Government Actuary, Mr. Trevor Llanwarne, has been forced to use, namely the ones given to him by the Chancellor in the pre-Budget report. I have before me a report from the Government Actuary's Department; it is directly relevant to the debate. Indeed, it was produced for the House, and is about the two orders before us. The Government Actuary is forced to use the assumption, made by the Chancellor in the pre-Budget report, that there will be an increase in earnings growth of 3.2 per cent. in 2009-10. The average of the forecasts in the Treasury's January comparison of independent forecasts for the UK economy is an increase in earnings growth of only 2.7 per cent for 2009-10. The assumption in the pre-Budget report on claimant count unemployment for 2009-10 was 1.31 million. Yesterday, the figure rose to 1.23 million. The Treasury's January forecast for 2009-10, which uses independent forecasts, is average claimant count unemployment of 1.83 million, so the first thing that I want to say about the national insurance fund is that I am concerned about the assumptions in the pre-Budget report that the Government Actuary has been forced to use. Even small changes in those assumptions are likely to have a very large impact on the fund. I want to ask the Minister a question that I should think almost every Member of the House is asked regularly by pensioners in their constituency, not least if those pensioners are allied to the National Pensioners Convention. It is on the thorny subject of the increasing surpluses in the national insurance fund, and the fund's increasing balance. I do not know about the situation in the Minister's constituency, but in mine, the Dunstable pensioners' association and other bodies haul me in once a year and ask, ““What are you MPs doing? You are sitting on more and more cash in the fund. We're not very well off. By law, the money can be given only to pensioners and others. Why can't we have some of it?”” That is more or less what they are saying. I see from the Government Actuary's report that the Government Actuary is required to make sure that there is a yearly excess of at least one sixth over and above what is paid in benefits. This year, that will be a sum of £12.5 billion, yet when we look at the report, we find that the balance is actually £52 billion. The surplus, and therefore the overall balance, has got larger year on year since about 1997, and it is forecast to grow in a substantial way. If Members look at page 30 of the report, they will see that the balance will rise from £52 billion in 2008-09 to £102 billion in 2013-14. That is a substantial rise. That may well be necessary because of demographic trends in the population—there will be a lot more pensioners, and a lot fewer people paying into the national insurance fund—but I have not found that clearly stated by any Minister in recent times. It causes me slight concern that when the hon. Member for Newport, West (Paul Flynn) tabled a question asking the Minister's predecessor, the hon. and learned Member for North Warwickshire (Mr. O'Brien), about the issue, part of the answer received was:"““when there is a surplus it is invested in public services.””—[Official Report, 22 February 2008; Vol. 472, c. 1116W.]" The Minister knows as well as I do that, by law, the national insurance fund can be used only for pensions, jobseeker's allowance and so on—a very narrowly defined range of public services. People might see the answer and think that money was being taken out of the fund and spent elsewhere in government. The Minister's predecessor went on to say, again in a written answer:"““The equivalent of the excess of receipts overpayments would need to be raised through tax increases to maintain the Government's fiscal strategy.””—[Official Report, 21 April 2008; Vol. 474, c. 1858W.]" That is in relation to the issue of ever-increasing yearly surpluses in the fund. There may be perfectly good reasons why the balance in the fund is increasing in such a significant way—and such a sustained way, according to the forecasts in the back of the report—but we need clearer answers on the issue, if only so that we can properly engage with people from the National Pensioners Convention and others who are, quite properly, considering the issue and wondering whether the Government could be more generous. I hope that I am not blind-siding the Minister on that issue; I know that it is technical and complicated, but it is incredibly important. I am not playing party politics on this serious issue. If she is not able to give the House a full answer today, will she write me a full letter, and place a copy of it in the Library, so that every Member can see it? To conclude, I hope that when we debate next year's uprating order, fewer people will be in dependency, and more people who want support can get it. I also hope that the millions of people who say that they would work if they had the proper support will have had the chance that they want of a better life for themselves and their families, and the chance to be less reliant on benefits. We hope, too, that more of our fellow citizens will be able to make arrangements for their pensionable age, so that some of the all-too-low pensioner incomes will be higher. We will work with the Government on any proposals that they make, but I serve notice on them that the Opposition will make their own proposals to deliver better welfare, and a fairer system that lifts more people out of dependency, which is not where so many of our citizens want to be.