Pensioners and Income Support (Hansard, 22 October 1998)

§ The Parliamentary Under-Secretary of State, Department of Social Security, (Baroness Hollis of Heigham)
My Lords, the Department of Social Security has been running nine pilot schemes since April this year to find the best way to provide more automatic help to the poorest pensioners. The pilots are only just being completed. We have commissioned an independent evaluation of the pilots which is currently being carried out. Results are expected early next year, and publication will then follow as soon as possible.

§ Baroness Castle of Blackburn
Does the Minister's reply mean that the publication of the Government's Green Paper on their comprehensive pensions policy is also to be delayed until the spring, making a fourth delay in the long saga of waiting for the Government to make up their mind? Or have the Government already made up their mind that a large part of pensions provision has to be means tested and that therefore it does not matter that this information is not available at the time of decision-making?

§ Baroness Hollis of Heigham
My Lords, the Green Paper on pensions will, as my honourable friend Mr. Denham has repeatedly said in another place, be published towards the end of this year. It is a Green Paper, and therefore a consultation document. There will be ample time for the results of the pilots to feed into the Government's future proposals for pension reform.

§ Baroness Miller of Chilthorne Domer
My Lords, does the Minister think it significant that the take-up of housing benefit is so much higher than that for income 1556 support? Housing benefit is delivered by accountable, and usually more reachable, local authorities. Will the Minister tell the House what progress the Department of Social Security is making with its attitudes to claimants survey to discover the comparative experience of those claiming from local authorities and from the Benefits Agency?

§ Baroness Hollis of Heigham
My Lords, I welcome the noble Baroness, who is asking her first question. She is right. The record achieved by local authorities in the take-up of housing benefit is indeed higher than that for the take-up of income support by pensioners. That is precisely why we have engaged on the pilot schemes. It is clear that pensioners take up housing benefit because they are disproportionately living in council housing, or it comes to them automatically. We wish to see whether we can learn from that and achieve the same automatic delivery of benefit to pensioners who fail to claim but who are entitled to income support.

§ Baroness Castle of Blackburn
Does the Minister's reply to my question mean that the Government are determined to extend the area of means-tested benefits instead of building up a proper state insurance scheme under which people may receive their pensions as of right?

§ Baroness Hollis of Heigham
My Lords, the choices are not merely a matter of either means-testing or a state insurance scheme. As the noble Baroness will know, the prosperity of future pensioners depends on a good second-tier pension, an occupational pension, appropriate personal pension or whatever; or, if those do not apply, SERPS or our proposals for stakeholder pensions. We currently have a problem in relation to poorer pensioners, mainly single women over the age of 75 who fail to claim income support and who have no occupational pension of their own. We believe that something like 1 million of them are failing to claim £15 a week. Therefore my noble friend and I are not in conflict on this matter. We all wish to see prosperity for future pensioners. However, there is a problem now; namely, that people who are not entitled to an occupational pension need income support and are failing to claim it. That is why we are going ahead with the pilot schemes.

§ Baroness Gardner of Parkes
My Lords, in my experience as a dentist I have found that older people were brought up under a system whereby they now feel it is beyond them and beneath their pride to ask for benefit. Does the Minister believe that that is a factor in relation to the age division? Or is it simply that the forms are too complicated?

§ Baroness Hollis of Heigham
My Lords, the noble Baroness may well be right. There may be a generation issue. However, the qualitative survey that we undertook before entering into the pilot schemes suggested that the reasons pensioners seemed not to be taking up income support were a mixture of ignorance as to their 1557 entitlement, the complexity of the forms, as the noble Baroness rightly identified, the stigma associated with means-testing, but also because sometimes a pensioner, having sought a benefit in the past, may have been rebuffed and now wishes to have nothing to do with the system. In the pilot schemes we are attempting to find a method that may work to help overcome those perceived hurdles. If, for example, we scrutinise the records of those receiving attendance allowance, it is quite a good proxy to ensure that people also receive income support.

§ Lord Borrie
My Lords, will my noble friend consider a proposal whereby all those over 75 automatically receive a larger amount, a minimum pension guarantee, unless it is shown that their means enable them to receive a satisfactory income without the extra amount?

§ Baroness Hollis of Heigham
My Lords, my noble friend may be referring to the proposals of Liberal Democrat spokesman, Mr. Steven Webb, regarding an extra pension for those aged over 75 and over 80. It is an interesting proposal. We are examining it. However, two issues would have to be addressed. One is the cost: £1 billion gross, half a billion net; the other is that a large proportion of the money would still go to people who financially do not need it because they are already relatively comfortably off.

§ Baroness Ludford
My Lords, there has been mention of a one-stop shop as between local authorities and the Benefits Agency. In reply to my noble friend Lady Miller, the Minister said that more people apply for housing benefit than for income support. When we discuss forthcoming social security it is to be hoped that there will be a move towards a one-stop shop. Information given to local authorities ought to be shared with the Benefits Agency. That would be one way of tackling the problem. Secondly, has the Minister noted the Audit Commissioners' estimate in their report on housing benefit fraud of £180 million, not the £4 billion mentioned by the previous Minister in the Department of Social Security?

§ Baroness Hollis of Heigham
My Lords, on the last point it is hard to know the real figure in relation to fraud. Had it been detected we should have received the money. The noble Baroness is right, as was her noble friend Lady Miller. There is a much higher take-up for housing benefit—94 per cent.—compared to the take-up of income support, which runs more generally at about 80 per cent. The discrepancy is even wider for pensioners. That is why, in the recent Social Security Act, we extended proposals introduced by the previous administration on data matching (information sharing) for good reasons between local authorities and central government. We hope to go further down that road.

§ Baroness O'Cathain
My Lords, on the point about providing additional pension to those over the age of 75, surely the problem would be tackled if that particular part of the pension were liable for tax. Those who were 1558 not liable for tax would receive the full benefit of the additional payment, and those who were better-off would not. Does the Minister agree that that would solve the problem?

§ Baroness Hollis of Heigham
My Lords, that is certainly true. As I said, we are looking at the matter. It is worth reminding ourselves how much pensioners' incomes have stretched over the past few years. As of 1996 the average income of the fifth of pensioners with the lowest incomes is only £100 a week. For the fifth of couples with the highest incomes the average is £600 a week. Inequality has widened within the population of pensioners over the past 20 years. That is why we are addressing the matter and are so concerned to target public resources to those in greatest need.

§ Baroness Byford
My Lords, I refer to the first comment of the noble Baroness, Lady Castle, relating to the delay in millions of pensioners claiming their allowances. On these Benches we share the concern that, by delaying claiming, those pensioners miss out on fuel payments and other benefits to which they are entitled. On the broader front, will the Minister accept that a minimum-pension guarantee would not increase the state pension? Surely, the result would be an increase to means-tested income support? Does she not accept that that may result in a disincentive to save, increasing dependency on the state?

§ Baroness Hollis of Heigham
My Lords, I do not accept the assertion behind the second part of the noble Baroness's question. The Chancellor has announced that from April 1999 we shall spend £2.5 billion on pensioners in terms of the take-up of income support and increasing the top-up from retirement pension to income support by three times what would have been the normal uprating, so that the minimum guaranteed income for pensioners will be £75 for an individual and £116 for a couple. In addition, we shall repeat the winter fuel payments and restore free eye tests—which should never have been stopped—and concessionary fares. A substantial package will go to the poorest pensioners, as a result of which they will enjoy a much greater hike in their real income than they have had at any point since the previous Labour administration.