Social Security

It is interesting that in a week when much of the news has been about people at the other end of the pay scale—those earning large sums of money—we are considering people who are surviving on benefits, and who are very much at the opposite end of the scale. Sadly, important though the measures before us are, they will not get the same news coverage as people who have been getting large bonuses and salaries. That is not to say that the measures are not important; they affect millions of people. The hon. Member for South-West Bedfordshire (Andrew Selous) covered many of the issues in great detail in his excellent speech. We welcome the uprating today. We are talking about a significant amount of money that will go to those who are most in need. I am delighted to see pensioners getting a significant rise in their pension. Of the £6.2 billion, £4 billion is going to pensioners. I could say it is too little too late, but we should welcome what has been announced today. It is a good thing. We have heard the details of the figures involved. I share with the hon. Member for South-West Bedfordshire a concern about the complexity that runs throughout benefits uprating and the entire benefits system. The 14 pages of details are too much. It is not only difficult for those receiving the benefits to understand; it is also very difficult for those trying to give them advice and work out exactly what benefits people are entitled to. As I said in my intervention, I thank the Minister for prior sight of her statement on invalidity allowance. I am pleased that no amounts will be claimed back. It is clear, once again, that because of the complexity of the system, many errors are made. So many people contact hon. Members regularly about errors made by the Department for Work and Pensions, particularly on tax credits. The Minister dealt with one relatively small error, but there are far larger errors out there that need to be tackled. It is also worth remembering today that there are many tapers, allowances and premiums that are not being uprated and have not been uprated for many years. We are entering different times. Last year's benefit uprating occurred before the increase in unemployment that we are, sadly, seeing now. With unemployment nudging the 2 million mark and with four unemployed for every vacancy, tackling poverty among the population of working age will assume increasing importance. Even in my constituency, which is not normally noted for much unemployment, Royal Bank of Scotland headquarters announced 2,300 redundancies earlier this week. Many people, for the first time in their lives, will be looking at the results of today's debate. People who have never known unemployment in the past will rely on the upgrading and the benefits that we are discussing. With unemployment rising across most sectors, there will be an increasing number of skilled workers on benefits and seeking employment. Although the extra money for jobseeker's allowance is welcome, is the Minister concerned that back-to-work benefits and policies under the Welfare Reform Bill are ill suited to high unemployment? We are considering a number of changes but, in the words of one famous individual, the times are a-changin'. I welcome the commitment that incapacity claimants with an age addition will not receive less than £95.15 a week. But does the right hon. Lady understand the frustration of disability groups, in particular, that the rate of support component will be no more than incapacity benefit, despite past promises to the contrary? Does she share my concerns that welfare to work and jobseeker's allowance arrangements have been designed to work in a period of low unemployment, as I said, unlike the circumstances that we will see in the year ahead? We are considering the uprating and various cost of living rises—the Rossi increase was mentioned—but we may be moving into a time of negative inflation. In the year ahead, as we enter uncharted waters, the Minister and her Department should consider how we ensure that benefits reach a more realistic level. I am amazed at how many people survive on the basic benefits. In the Treasury Committee, one banker asked what the level of jobseeker's allowance was—what people have to survive on. The figure is about £60 a week. The individual who answered the question was earning about £60,000 a month. Some people out there are surviving on very low levels of benefit. I welcome the decision to increase the state pension to £95.25 a week. Will the Minister take on board the point that when benefits are calculated, the income that savers are assumed to receive from their savings is 10 per cent., but that is not happening in practice? People who have been prudent throughout their lives, people who have saved and put money by, do not want to dip into their capital because that will reduce their income and affect the amount of benefits they will have to ask the state for. Many pensioners who have been prudent all their lives do not want to apply for means-tested benefits. There is too much means-testing in the system which, along with the complexity, puts many people off applying for benefits. It has been estimated that 1.8 million eligible pensioners do not claim pension credit. When I have raised the issue of means-testing in the past, it has been argued by the Government that that will focus most help on the people who most need it, so that the most deserving are in receipt of the amounts to which they are entitled. Sad to say, those most in need are not those who are entitled to and receive means-tested benefits, but those who are entitled to but do not receive the means-tested benefits, and they are right at the bottom of the heap. Those 1.8 million pensioners who are entitled to money but are not receiving it were often told by the Government that increased amounts such as the Christmas bonus would help make up the difference, but the sum paid out in that form is a small fraction of the £2.8 billion in unclaimed pension credits. Fraud and error have been mentioned by previous speakers. It is vital that we ensure that fraud and error are kept to a minimum because both, in effect, take money away from those who are entitled to benefits. The elderly, the disabled, the unemployed, and people trying to get into work and off benefits should get the maximum support to which they are entitled, and if money is being lost through fraud or error, it is not going where it needs to go. The Minister mentioned the winter fuel payment. Although I agree that that is usually a Budget issue, will she consider a higher rate for those who claim the higher rate mobility component of disability living allowance? Although benefits help many of those who are disabled, it is extremely expensive to keep the home of someone who is disabled warm, for two reasons—partly because, in certain cases, disabled people do not move around as much as the rest of us, and partly because there is a far higher unemployment level among the disabled so they are more likely to be at home and to need their home heated. The third factor is that the average income of a household with a disabled person in it is lower, so although the costs of running a disabled household are often higher, the income is often lower. The people caught in that pincer movement need extra benefits, and we must make sure that those who are entitled to the benefit receive it. It was mentioned earlier that falling interest rates were helping those with mortgages, but many of those who are unemployed and receiving mortgage interest relief are on fixed rate mortgages. I was pleased to see that the Chancellor and the Department have agreed not to introduce the formula which reduces the amount of mortgage relief until May, but if the base rate stays at 1 per cent., the current system whereby people receive their mortgage interest relief is 1.58 per cent. above base rate. That will give people mortgage interest relief at about 2.5 per cent., but 50 per cent. of those paying mortgages have fixed rate mortgages at 5 or 6 per cent. I appreciate the action that the Government have taken by not reducing until May the amount that such people are paid, but between now and May a new system will have to be introduced or we will find that the new group of unemployed people who are on fixed rate mortgages will receive a benefit that does not cover their mortgage interest. The end result of that will be that not only will they have lost their job but they will be in danger of losing their house. We hope that many people who are unfortunate enough to lose their job will get back into the job market fairly quickly, but in these times of rising unemployment, that will be more difficult. The last thing that they need is to lose their house at the same time. As I have said, I do not want to be niggardly, and I welcome the measures that have been introduced. When the Minister winds up the debate, I would like her to address the issues that we must deal with in the future—higher unemployment, means-testing, which is a major problem with the uprating, low inflation, complexity, which other hon. Members have mentioned, and the high levels of error and of fraud. In conclusion, I welcome what has been given, but the Department has so far to go.