§ 11 am
§ The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman)
With permission, Mr. Deputy Speaker, I should like to make a statement.
The Government are modernising the welfare state to meet the changing needs of the 21st century. We inherited a system that was failing on all counts. It was failing to tackle poverty, despite spending more. It was failing to help people work, and was writing them off to benefit dependency.
Reform is necessary—work for those who can work and security for those who cannot. We have already set about the task. We have established the new deals—with the biggest ever investment in opportunities. We are not only helping the young and long-term unemployed, but for the first time helping those whose aspirations had not previously been recognised, whose benefit dependency had simply not been addressed—lone parents and people with disabilities and health problems. We are overhauling the child support system, setting up a comprehensive counter-fraud strategy and raising child benefit with extra help for the poorest families.
We are committed to fundamental reform of incapacity benefit for new claimants. We aim to spend less on incapacity benefit, and to provide more help for severely disabled people with the greatest needs and more help for disabled people to return to work. We will improve gateways into disability benefits, and we have already begun discussions with disability organisations about that.
Helping people into work helps them to be better off than they can be on benefits, but it will also help them to provide more for themselves in their retirement. Later this year, we will publish a Green Paper setting out our long-term strategic proposals for pensions. Now we are starting pensions reform for today's pensioners.
This House rightly places great emphasis on the concerns of older people—people who have worked hard all their lives either out at work or bringing up a family; the generation who fought in the war. They are entitled to security in their retirement. They deserve dignity in their retirement.
There has been much focus on the basic state pension, and that is right. It must remain the foundation of income in retirement. We will uprate it at least in line with prices, but we know that pensioners feel that their concerns were not central to the previous Government, and they want action now.
Yesterday, my right hon. Friend the Secretary of State for Health announced to, the House the abolition of charges for eye tests for all pensioners. On Monday, my right hon. Friend the Deputy Prime Minister will announce new concessionary travel for all pensioners. Today I can announce to the House, as part of the comprehensive spending review, extra help with winter fuel payments for all pensioners.
We have already made a winter fuel payment of £20 to all pensioner households and announced our intention to do so again this winter. As a result of cutting VAT on fuel, our winter fuel payments and other changes, average pensioner fuel bills are as much as £100 lower this year. As part of the comprehensive spending review, we have 704 allocated a further £0.5 billion to make those winter fuel payments a permanent feature of all pensioners' income. All pensioners will know that, in addition to the help with their fuel bills from our cut in value added tax to 5 per cent., they will get a winter fuel payment of £20.
There are elderly people for whom even the extra help of the basic state pension increase and the winter fuel payment is simply not enough. These are the pensioners whose income has fallen furthest behind. Typically, they have no occupational pension, no private pension, no savings, no state earnings-related pension scheme, sometimes not even the full entitlement to the basic state pension. They fall back on income support. They have fallen further and further behind. In a divided Britain, the gap between the poorest and the richest pensioners has been widening. It has been widening for 30 years, and without decisive Government action is set to widen further.
This Government are committed to tackling poverty and social exclusion and we are not prepared to let that happen. We are taking action. We will establish a guaranteed minimum income for pensioners. So, for the poorest pensioners, we are increasing their income by three times the increase in income support that they would have received had we awarded only the usual price uprating. For 1.5 million of the poorest pensioners, this is the biggest single increase they have ever had.
For the first time, all pensioners will have a guaranteed minimum income of not less than £75 a week. For the first time, pensioner couples are guaranteed a minimum income of £116.60. The oldest pensioners will get even more.
There are some pensioners who are even poorer than those on income support. They are some of the very poorest people in Britain. They are the pensioners who are entitled to income support, but are not getting it; those who are slipping through the safety net altogether—the forgotten pensioners. This is not a marginal issue involving just a few slipping through the net. We estimate there are as many as 1 million of these forgotten pensioners. They are mostly very elderly, and nearly all women. Now we are taking action to bring the guaranteed minimum income to them, too.
Starting from next April, we will be introducing, for the first time, a new national programme of personal advisers for pensioners. We have already set up, and are running, nine pilot projects to help us shape this new service. Through new technology, we will for the first time use the information that pensioners have already given us throughout their lives. We will match the data that we already hold on their personal records in the Contributions Agency, the Benefits Agency and the local authority records to identify those who are likely to be over pension age, entitled to income support and not receiving it.
The pensioner will then be contacted by the personal adviser, who, over the telephone or through a visit, will assess their entitlement, and then fill in the forms for them. All that pensioners will have do is sign, and their extra money will come through the following week.
Yesterday, I visited one of the pilot projects in Torfaen in Wales and met some of the pensioners who had already been helped. The pensioners were all absolutely clear about two things. First, the extra money, even where it was only a small amount, meant a great deal to them. It is desperately needed. Secondly, without the personal 705 contact, there would have been absolutely no chance of their getting the money. It is right that we are taking this service nationwide. It will begin to tackle the hidden problem of pensioner poverty.
Today, my announcement marks a major modernisation of the pensions system. We have been able to deliver real help for pensioners within a social security budget that is set to grow more slowly in this Parliament than it did in the last, to take a lower share of gross domestic product, and to take a lower share of public spending as a whole. It is part of our pensions reform and marks a new approach to tackling the problem of pensioner poverty and inequality.
We promised to reform the welfare state around work for those who can work. We have made progress on that. We promised security for whose who cannot work. Today we make progress on that too. This marks a major step forward in our determination to deliver security and dignity in retirement for all.
§ Mr. Iain Duncan Smith (Chingford and Woodford Green)
I thank the Secretary of State for giving me advance sight of her statement, although I did not receive the last two minutes, so some of the details will have to be studied later.
Today's statement is as fascinating for the detail, which I shall address later, as for the omissions. The way in which we account for how we pay for the changes and how pensioners receive the increases depends to a large extent on how well the economy does, which clearly depends dramatically on how the social security budget is either kept in check or reduced. What has happened over the past few days is a deliberate attempt by the Government to talk themselves out of a pledge that they gave at the time of the last election.
The quotes are straightforward and simple. The Prime Minister said at the time of the last election:we have said as we get the welfare bills down, these appallingly high bills for social and economic failure under the Conservatives, then we can release more money into education and health and the services…we really want".Therefore, my first question for the Secretary of State is this: why are she and the Prime Minister now trying to pretend that the Labour party did not pledge to reduce the costs of social security?
The 1996 Labour document, "Getting Welfare to Work—A New Vision for Social Security" states clearly that they had "three fundamental goals", the second of which was,to save money for the taxpayer, as the benefit bill reduces.That is the key: the Government are acting like a bunch of con men, trying to persuade the public that they never made such a pledge. It is not an easy pledge to meet, but the Prime Minister and the Secretary of State must answer the question—why are they trying to avoid it?
In her statement, the Secretary of State spoke of reducing dependency and of the pledges in that respect, but it is clear that, like a number of the Government's measures, the working families tax credit—I know that the Secretary of State does not want that to be in the social security budget, but the fact is that it replaces benefit payment, so it is in that budget—raises dependency quite dramatically, as more than 400,000 extra people will enter dependency as a result. That is another broken pledge.
The key to today's statement is the question of how the pensions are to be afforded. We need to determine how much of the money will be long-term and sustainable, 706 so let us look at the reality of the welfare budget—how much the Government have managed to secure through reductions, and what that means overall. The document about which the Chancellor made a statement on Tuesday is significant for the absence of most of the money within the social security budget of which it is necessary to take proper consideration.
For example, we saw that the Government had taken out administration costs—roughly £3.5 billion a year. They have also taken out the working families tax credit, with most of it hidden in accounting adjustments, but with 20 per cent.hidden elsewhere. Those figures should have been included, because they represent money that was family credit and part of overall benefit payments.
When we look at the figures, despite the absence of calculations on housing benefit, council tax benefit and other benefits, we begin to get a much truer picture of what the state of the budget is and, more important, is likely to be over the next few years. The figures tell us that, before Labour's arrival in government, the welfare budget was falling each year, year on year; and that, as a direct result of the previous Government's actions, it went into negative growth in the first year of the new Labour Government—it actually fell to less than 12 per cent. of GDP. That figure was clearly the result of the activities of the previous Government—so to say that the Conservatives did not reduce the overall burden of welfare or reduce the costs of welfare as a proportion of GDP is utterly absurd. The figure fell below 12 per cent. and was likely to fall further.
When we then examine the Government's figures with all the relevant figures having been added back in, as the Library has done for us—
§ Mr. Duncan Smith
I shall get on to pensions, all right.
The point about affording pensions lies absolutely in whether or not the costs of welfare are being reduced or increased. In reality—even according to the Government's own predictions—once working families tax credit has been added back in, the budget is set to rise to 12.3 per cent. of GDP by 2001. From what independent analysts have calculated in the past few days, we can begin to see that, even if there is only slight variation in growth, that budget forecast is likely to rise to more than 12.5 per cent. of GDP; and if growth becomes worse, it will rise to nearly 13 per cent. of GDP by the end of this Parliament.
All that bears directly on the Government's ability to afford what they say they want to pay to pensioners and others, so why did the Secretary of State allow such misleading figures to be published? Does she accept that the figures in the book that was published on Tuesday are not correct; and that, when the money relevant to the social security budget is added back in, the proposal breaks the Government's pledge about reducing the overall burden of welfare as a proportion of GDP?
Several questions remain to be answered, even after today's statement. The statements on health and education dealt with the entirety of the changes and the implications for the budget, but today the Secretary of State has chosen not to talk about the entirety of the changes, so a huge number of questions arise. The comprehensive spending 707 review says that the new education maintenance allowance will be "linked to parental income". Will the Secretary of State clarify whether child benefit—
§ Mr. Duncan Smith
The hon. Gentleman probably does not realise that child benefit is part of the social security budget.
Will child benefit be taxed or means-tested as a result of that declaration? Will the Secretary of State also tell the House how much money the Government expect to raise from the announced switch to education maintenance allowance, or will spending on child benefit and EMA remain the same as the total spending on child benefit, but simply be reallocated?
Why were no decisions on the future of disability benefits explained in the statement? Why was there nothing on housing benefit and council tax benefit? Why was there no mention of the change programme? Part of the proposal to hold costs in check relies wholly on what happens in respect of restraining administrative costs, which remain fairly flat in the Government's forecast. What are the Government likely to receive in terms of such cuts?
In his statement on Tuesday, the Chancellor announced a target of 40,000 lone parents going back into work as a result of the new deal programme, which bears directly on the social security budget, which has a bearing on pensions, to which subject I shall turn in a second. In a debate on Monday, the Secretary of State said that she would announce no targets until she had received the full understanding of what was entailed in the programme currently in place. Did she receive that understanding overnight? How is it that the Chancellor was able to announce on Tuesday a target of 40,000 lone parents going back into work as a result of the Government's programmes?
Conservatives have always upheld, and will continue to uphold, the principle that the most vulnerable, especially pensioners, should be assisted in claiming their full benefit entitlements; and that those entitlements should reach the level required for people to have a sustainable income in retirement. Yet the question remains whether the increases announced today are real and sustainable and will not be clawed back in due course as a direct result of the Government losing control of the economy, as has happened so often under Labour Governments. The Government have already clawed money from pensioners through their hit on advance corporation tax dividend tax credit, which has taken £5 billion a year from pensioners who bother to save.
The new higher so-called guaranteed income is a massive increase in means testing. It represents a complete U-turn from the more sensible policies advocated by the Labour party when in opposition, and, more particularly, some of the more sensible utterances of the Minister for Welfare Reform, who said that extending means testing would be a retrograde step. Not only will it have a devastating effect on the incentive to save of people on modest incomes, who have been encouraged and who want to save, but it will deprive them of the enhanced means-tested benefit.
708 The Government now have a policy that will simultaneously greatly increase both dependency and Government expenditure. How do the Government propose to persuade more people to claim their means-tested benefits? How much more money will be lost in bureaucracy?
The Secretary of State talked about advisers, but I want to know how many she expects there to be. There are 10 million pensioners in this country, of whom only 1.7 million claim income support, so, if the Government's intentions are to be taken seriously, that must mean that more than 8 million pensioners will have to be screened or visited. If one civil servant can screen roughly 1,000 pensioners a year, that means more than 8,000 new civil servants, at a cost of £250 million every year, spent just on bureaucracy. How much of the money for pensioners will have to be allocated to the bureaucratic mechanisms that will be necessary?
Does not that also mean that the Secretary of State's proposals will begin the erosion of the contributory principle which so many hon. Members on both sides of the House think should be enhanced rather than clawed away? In the present proposals, the Government have sounded the absolute cry that they no longer consider the contributory principle to be the mainstay, and bit by bit, they will extend the means-testing process across the whole state income.
As the Secretary of State knows, one of the reasons why many pensioners do not claim income support is that they do not like the idea of taking what they view as charity, but they believe in taking their basic state pension because they view that not as charity but as a provision to which they have contributed. How is the Secretary of State building on that? Surely she is asking all those people, to whom income support may not be at all relevant, to declare their incomes when they did not do so before.
In conclusion, the issue is sustainability and whether the Government, like so many Labour Governments, have for short-term reasons declared that they will somehow raise incomes only to claw them back as the economy fails and they fail on their pledge to cut social security and welfare dependency. In a few years, pensioners up and down the country will find their incomes falling, not rising, as a result of the Government's actions and failures.
§ Ms Harman
The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) has failed to address pensioner poverty and to say whether he thinks that we are right to tackle that problem by investing in help for pensioners and giving the greatest help to the poorest, who have been left behind. If, in addition to the help that we are giving all pensioners, we gave them the £2 billion that we have set aside for the poorest pensioners, the poorest would get just pence—they need pounds. We cannot limit the help that is needed by the poorest to that which we could prudently give to all. The problem is that the pensioners who have fallen behind—the very poorest—need extra money.
I shall tell the hon. Gentleman about one of the pensioners I met yesterday. She is an elderly widow who had been identified through our pilot project and given extra help. She told me that, instead of being able to buy only two apples at a time, she could now afford to buy a 709 pound of apples. We are talking about people who are living on the margins, while the hon. Gentleman is pursuing high-blown theory. The proposal aims to tackle pensioner poverty and give pensioners the help that they need.
The hon. Gentleman said that the proposal will lead to means testing and bureaucracy. He has not listened. Personal advisers will not have to visit all 10 million pensioners. Of course that is not our proposal. We are doing what his Government did not; we are using the data that we already hold on our computer systems to identify those who are likely to be vulnerable. The personal advisers will visit only those people, who are screened by new technology, so the question is not simply one of bureaucracy.
The hon. Gentleman said that there will be a massive increase in means testing. Presumably he opposes the measure, but he has no proposals to stop the poorest pensioners falling behind, and none to tackle the problem of the 1 million pensioners who, under his Government, fell through the net altogether.
The measure has nothing to do with the devastating effects on the incentives to save, which were caused by the rip-off of private pensions, in which £1 in every £4 was eaten up in costs and administrative charges. The devastating effect on personal pensions was caused by the scandal of pension mis-selling. This is a practical, sensible and socially just proposal for giving immediate help to those who are most in need, and we are right to make it.
The hon. Gentleman talked about overall spending figures. He made two points. He accused us of being misleading about the figures, and he took issue with the overall spending plans. He said that we had hidden social security administration figures. We have not; they are not hidden. They are on page 16 in table 1 of the comprehensive spending review, clear for all to see. Those figures cover three years.
The hon. Gentleman said also that the working families tax credit was an accounting fiddle and a broken promise. It is not; it is a promise being kept, to give more help to low-income working families and to make sure that work pays as part of our welfare-to-work programme.
§ Ms Harman
We have not fiddled the figures. There are times when figures move, as they did under Conservative Governments, from the social security budget to the health budget, from health to social security and in and out of the tax system.
I shall give examples. Did not the hon. Gentleman's Government remove spending on residential care in nursing homes? That was switched from the Department of Social Security to the Department of Health under community care. We did not argue that it should be put back into the DSS figures. It moved from the social security budget and the same amount was dealt with under community care. The Conservatives removed the cost of statutory sick pay from the social security budget. We did not argue that it should put back, because it was being paid differently.
We are restructuring the help that we give to low-income families in work. We are rightly paying that money through the tax system as part of a major reform of tax and benefit. All the figures are there to see, and we have accounted for them properly and publicly.
710 The hon. Gentleman talked also about the level of social security spending. Under the Conservatives—we have their record on which to judge them—the social security budget rose from 9.7 per cent. of gross domestic product to 12 per cent. Under this Government, it is set to fall from 12 per cent. to 11 per cent. While the social security budget was increasing in cash and percentage terms, poverty was also increasing. There was less help for those who needed it, but extra help was being given overall because more people depended on benefits who could and should have been in work. That is why we have said that we shall cut the cost of social and economic failure.
We shall invest, through the new deal, in opportunity and help those who can to work. All the lone parents who have gone to work under the new deal are, on average, better off by £39 a week than they were on benefit. That is tackling poverty. However, their benefit dependency has also decreased by £42 a week on average. That is our approach. We are investing in opportunity and cutting the cost of social and economic failure. At the general election, we set out what we would do to tackle poverty and social exclusion and to broaden opportunity. We said that social security would be part of reforming the welfare state. We have done that.
§ Mr. Malcolm Wicks (Croydon, North)
Despite the icy-hearted response from the Conservative Front Bench, a great number of British people will applaud the measure to support citizens, many of whom are in their 80s and 90s, who are not only some of the most decent people in this country who have served us so well over the years, but some of the poorest.
However, I have a suggestion. As personal advisers will be calling on that group, could we ask them also to find out whether they are missing out on other parts of the welfare state, such as insulation grants—some elderly people make a choice in winter between eating and heating—and to advise them about the new free eye tests? Those are just two examples. The personal adviser system will be relatively expensive, and rightly so, but could we use it more generally as a human access point for the wider welfare state for people who ask so little but deserve so much from the rest of us?
§ Ms Harman
My hon. Friend makes a very important point. The pensioner personal advisers—I pay tribute to the work that they are doing—are changing the face of social security and bringing help to people who have fallen through the net. They also advise on free eye tests and insulation grants.
Yesterday, I spoke to one pensioner and her personal adviser in Wales. She had a problem with another bill altogether—she was told that she owed more than she did—and her personal adviser helped her to sort it out. It is an overall service that helps vulnerable people with their problems and gets them help in their own homes when they need it. It is less expensive than spreading help thinly to all pensioners, although we are concerned about all pensioners: that is why we are providing free eye tests, concessionary travel and winter fuel payments and will retain the basic state pension as a foundation of income in retirement. However, we must get extra help to the very poorest.
§ Mr. Steve Webb (Northavon)
Unlike the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith), 711 I congratulate the Secretary of State, first on not keeping the Prime Minister's pre-election promise to cut welfare spending, and secondly on focusing help on poorer pensioners, about whom I have made representations on many occasions.
I welcome her statement this morning, but does she accept that, when history comes to judge the first two years of the new Labour Government, it will view them as a wasted opportunity because of the unnecessary adherence to Tory spending plans? Does she accept that, for many very elderly pensioners who are in the last years of their lives, two years is too long to wait? Would it not have been better as an immediate measure to increase the basic state pension for all older pensioners so that people got the money straight away?
Does the Secretary of State propose to link the proposed pension guarantee to earnings or prices? We very much welcome the above-inflation increase next April, but beyond that what will happen? If it is not linked to earnings, first, the Government will break their manifesto pledge that pensioners would share in general prosperity, and, secondly, the growth in pensioner income inequality that the Secretary of State professes to oppose will continue. So I hope that she will reassure us that it will be linked to earnings.
Finally, does the Secretary of State believe that she is subject to the Trade Descriptions Act? Can the minimum income guarantee to which she referred justify the word "guarantee"? For want of a better word, is it guaranteed, or is it the case that, even when the so-called guarantee is in place, tens of thousands and probably hundreds of thousands of pensioners—particularly those who are not claiming benefit—will still miss out, so that it is not a true guarantee?
§ Ms Harman
Before the election, my right hon. Friend the Prime Minister promised to cut the cost of economic and social failure—the cost of people who depended on welfare and benefits but who could and wanted to work—and that is what he has delivered. I am happy to acknowledge that the hon. Gentleman and many of his hon. Friends have urged that we should give extra help to the poorest pensioners and criticised an approach that simply gave help to all and allowed the poorest to fall further behind. I acknowledge the part that his arguments have played in the change.
Reform of the welfare state has been under way since we took office. Last July I set up the new deal for lone parents. That is welfare reform, extending opportunities to those who did not have them before in order to increase their incomes and cut the cost of economic and social failure.
We started pensions reform very shortly after taking office, by investing millions of pounds in establishing pilot projects. We would not be in a position to target help nationally to the poorest pensioners had we not conducted piloted projects. The previous Government made no attempt to help the poorest pensioners. As soon as we were elected, we set about establishing pilot projects in order to be confident that we could take the policy forward. We are not announcing the start of activity, but going national on activity that we have been piloting, and I hope that the hon. Gentleman acknowledges that.
712 The hon. Gentleman asked whether the minimum income would be guaranteed. That is an important question, as it goes to the heart of the issue—those who are falling through the net altogether. We have not simply announced an increase and said that it is there for those who can get it; we shall make sure that we get it to those who need it through our system of data matching and personal advisers. We are investing in a new delivery system. It would have been the utmost cynicism to announce in the House a guaranteed minimum income for pensioners who were already identified and claiming income support. It is right that at the same time we are introducing a new delivery system to reach something like 1 million forgotten pensioners.
§ Mr. Deputy Speaker (Sir Alan Haselhurst)
Order. I have to protect the main debate of the day, so I must appeal for short, single questions and short replies.
§ Mr. David Winnick (Walsall, North)
Is it not a blot on the country that so many pensioners are forced to live in acute poverty? Many of them are ex-service men who sometimes wonder—and ask me at my surgeries—who actually won the war. Is it not absolutely essential that they are assisted, having been betrayed by the Tory Government? In respect of the concessionary travel to be announced on Monday, I hope that my right hon. Friend will try her very best to see to it that there can be a reduction in the cost of TV licences, as that, too, would be helpful to many retired people.
§ Mr. Edward Leigh (Gainsborough)
Surely what is important is not whether it is called a minimum income guarantee or income support, but how much extra money will be in the pockets of pensioners. What does it mean for the contributory principle? Is not the statement, with its narrow focus, rather like the dog who did not bark in the night? Why is there not more talk about how cuts in total welfare spending—as promised at the election—will finance increases in public spending on health and education? Is it not time to admit that welfare spending has risen remorselessly in all western countries in the past 40 years; that the bulk of welfare spending falls quite rightly on pensions, the disabled and child benefit; and that it is impossible for the Government to deliver their promise to cut the total welfare bill?
§ Ms Harman
We promised to cut the cost of social and economic failure. The reduction in benefit dependency allows us to prioritise our resources on our manifesto commitments in health and education. As we are not spending money on those who could be working, we are able to direct the resources to those who are not working because they are in retirement.
§ Mr. John McAllion (Dundee, East)
Can my right hon. Friend assure the House that receipt of the new guaranteed minimum income will not affect entitlement to income 713 support? It would clearly be wrong to give increased pensions with one hand and take away entitlement to housing benefit and council tax rebate with the other. Does my right hon. Friend recognise that today's pensioners are demanding the restoration of the link with earnings and that, until that happens, her generation will not have redeemed their debt to them?
§ Ms Harman
My hon. Friend makes a very important point. Many pensioners in Scotland are struggling to make ends meet. In fact, 156,000 pensioners do not have enough second pension or savings and depend on income support. However, we estimate that a further 100,000 pensioners in Scotland are entitled to income support but are not receiving it. My hon. Friend has been a long-standing advocate of our determination to tackle poverty and inequality. I am sure that he will agree that we should get help not only to the 156,000 who need a better standard of living, but to the 100,000 who are falling way behind. The guaranteed minimum income will ensure that all those pensioners will be much better off than they could ever have been with the previous rates of income support.
§ Mr. Ieuan Wyn Jones (Ynys Môn)
Although I very much welcome her statement, I have noticed that on two occasions now the Secretary of State has refused to make a commitment to restore the link between pensions and earnings. Given that, obviously, it is now the Government's position that the link will not be restored, will she recognise that, as hon. Members on both sides of the House have pointed out, the issue of concessionary payments will become even more important? Can she confirm, therefore, that the announcement that will be made on Monday on concessionary travel will mean that it will be available to all pensioners at the same level, wherever they live, and will she make it clear that the Government will reconsider the issue of concessionary TV licences?
§ Ms Harman
I am afraid that the hon. Gentleman will have to wait until Monday for confirmation of the details of the Deputy Prime Minister's statement. May I say, however, what an urgent issue the poverty of the poorest pensioners in Wales is? We estimate that probably more pensioners in Wales are entitled to income support and are not getting it than are entitled to income support and are getting it. As a result, of all those pensioners in Wales who fall below income support level, only about half receive income support. That is why I believe that the measures that we have announced today—a guaranteed minimum income for pensioners and an increase for all the poorest pensioners—will be especially important for pensioners in Wales.
§ Mr. Tony Colman (Putney)
I thank the Secretary of State for her statement, which will be welcomed by the pensioners of Putney and, equally important, by my 87-year-old mother and her friends. However, no mention has been made of the scandal of excess winter deaths of pensioners. Will the Secretary of State outline her action plan to deal with that scandal?
§ Ms Harman
My hon. Friend has raised an important issue—that of excess winter deaths. More people die in the winter than throughout the rest of the year. There are about 48,000 excess winter deaths among pensioners 714 every year. If one compares that situation with that in countries where there is a much wider fluctuation of temperature, I am afraid that one can draw only one conclusion: pensioner poverty is contributing to the toll of deaths in the winter.
We were not prepared to stand by and allow that problem to continue growing when the prosperity of the country has increased in each of the past five years. The measures that we take today, which specifically focus extra help on the poorest pensioners, are urgently needed.
§ Mrs. Theresa May (Maidenhead)
The Secretary of State has made several references to a pledge to cut the costs of social and economic failure. With the number of unemployed people and those claiming benefit rising, we are actually witnessing an increase in the costs of the Government's economic failure. Will the Secretary of State answer the very simple question that was asked by my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith)? How many personal pension advisers will be employed, what will be the cost of employing them, and what will be the cost of the data-matching exercise, which presumably will be on-going, in order to obtain the names of those pensioners who should be approached by their personal pension adviser?
§ Ms Harman
The hon. Lady made two points—first, on the issue of the cost of social and economic failure, and secondly, on the issue of personal advisers and costs. The number of lone parents on income support was increasing under the Conservative Government. There was no programme to help them to return to work. Married women were returning to work, and it was obvious that it should have been possible for lone parents to do so too, especially once their youngest child had started school.
We have introduced the new deal for lone parents. The number of lone parents on income support has fallen below 1 million for the first time, as the Prime Minister told the House on Wednesday, and it is forecast to fall by a further 40,000 next year. That is not a target; it is a forecast. We hope to move things even further forward with the new deal for lone parents. We are cutting the cost of economic and social failure. The bill to keep lone parents on income support at a low standard of living, with their children being brought up in a workless household, was rising. Under the present Government, backed by our programme of action, which will be augmented by the child care and the working families tax credit, that bill, which is a cost of economic and social failure, will fall.
The hon. Lady also asked about the number of personal advisers. As I have said, we are piloting their introduction. Details of the numbers of personal advisers and the costs of the new technology will be available when we have finished and evaluated the pilot project.
§ Mr. Jeremy Corbyn (Islington, North)
Will the Secretary of State tell us how pensioners are to cope with the twin problems that they currently face—a state pension that has been increased only in line with prices, not earnings, and is therefore £25 a week or more less than it should have been had that link been maintained; and the poverty trap in which many pensioners find themselves because they have a small secondary pension which takes them just above income support level and thus lose out on council tax and housing benefit entitlements? How will her proposals today affect those entitlements? Is she still considering a longer-term increase of the pension in line with earnings—the link that was so callously broken by the previous Tory Government?
§ Ms Harman
The Green Paper, which we shall publish in the autumn, will look at the level and future of the basic state pension. As a result of the announcements that we are making this week as part of the comprehensive spending review, all pensioners—not just those on income support—will be better off. They will not have to pay the cost of their eye tests; they will receive permanent help with winter fuel bills; and they will get concessionary travel.
§ Mr. Michael Colvin (Romsey)
The Secretary of State will be aware that many British pensioners live overseas, some of them in countries where their pensions have been frozen at the rate that they were receiving when they emigrated. Why has not her review addressed that injustice? Does she recall that the Minister of State, when Chairman of the all-party Select Committee on Social Security, recognised that injustice and recommended that there should be a debate in the House in Government time with a free vote? I believe that that would be a good idea now, so that the 144 people who have signed the early-day motion calling for the unfreezing of those pensions may air their concerns.
§ Mr. Deputy Speaker
Order. I am afraid that we must now move on. We have an important debate, in which many hon. Members seek to participate.