HC Deb 17 March 2003 vol 401 cc613-5
4. Mr. Gary Streeter (South-West Devon)

What percentage of the population are in receipt of means-tested benefits. [102948]

The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks)

About 17 per cent. of individuals in Great Britain over the age of 16 are in receipt of one or more income-related benefits. This Government are committed to targeting help at those who need it most, while putting in place a range of initiatives to help people back into work, such as new deals, improvements in child care, the national minimum wage and our new tax credits. All are about making work possible, but also about making work pay.

Mr. Streeter

Once the changes in April and October come into play, will not some 40 per cent. of the population—about 20 million Britons, according to House of Commons Library figures—be subject to means-tested benefits? Does that not horrify the Minister? Rather than luring more and more people into the sticky and complicated web of welfare dependency, would it not be better to reduce the burden of tax on hard-working families and set them free to make their own choices?

Malcolm Wicks

The reality is that we are seeking successfully to get people out of benefit dependency and into work. The number of people receiving income-based jobseeker's allowance, for example, fell from 1.2 million to 600,000 between 1997 and 2002. It is wholly appropriate, however, that we support children and work, so that when people make the often difficult transition into work, we can guarantee that it pays. That is the purpose of the tax credit system.

Mr. David Willetts (Havant)

Has the Minister seen today's powerful report from the Association of British Insurers, which says that eventually 80 per cent. of pensioners could be on means-tested benefits and that today's state pension system won't work tomorrow"? The association joins a long list of organisations—the National Association of Pension Funds, Help the Aged and many others—that have warned about the spread of means-testing under this Government. Instead of reforming benefits and making them simpler, all Ministers do is to introduce yet more means-testing. Why will not the Government join the growing consensus that benefits for pensioners need to be made simpler, instead of introducing ever more means-testing and complexity?

Malcolm Wicks

We have published our proposals in our Green Paper on pensions. Our strategy—to reduce means-tested dependency for those who are out of work by providing them with work—is the right one. However, it is wholly appropriate that we have a strategy, for both pensioners and those of working age, to support savings and to support those who are in work, but often on low wages, through the tax credit regime. It is an appropriate and consistent strategy to attack poverty in this country.

Mr. Willetts

It is not a strategy at all. The Minister spoke of means-testing dependency for the unemployed, but it is the same for pensioners. Why will not the Minister listen to what so many outside groups are saying? Why are the Government so confident that they have got it right when everybody else is warning about the implications of their system? More means-testing means weaker incentives to work and save and a system that is so complicated that fewer and fewer people get the benefits to which they are entitled. Why will the Minister not listen to those powerful warnings from everyone else?

Malcolm Wicks

We listen to many groups. In opposition, we listened to the oldest and poorest, whom the last Tory Government did so little to support. Our targeted strategy has brought huge gains to some of the poorest and most deserving among our elders. The Opposition need to explain why they would take away pension credit from many hundreds of thousands of people who need and deserve it.