Pensioners and Winter Fuel Payments

Lord Dodds of Duncairn Excerpts

Tuesday 22nd November 2011 Commons Chamber

[Mr Nigel Dodds (Belfast North) (DUP)]

I beg to move,

That this House is concerned about pressures on pensioner households this winter with high and rising fuel prices; notes that the Winter Fuel Payment will be £50 lower in the winter of 2011-12 than in each of the last three years for a pensioner aged 60 or over and £100 lower for those pensioners aged 80 or over; and calls on the Government to review the impact of its decisions on Winter Fuel Payments and VAT, and to announce in the Chancellor’s Autumn Statement urgent steps to ease the burden on pensioner households.

It is a pleasure to move the motion standing in my name and the names of my right hon. and hon. colleagues. This motion is about a life and death issue. Fuel poverty and the effects of cold winter weather on the elderly are a lethal combination. Only today, the Office for National Statistics has published figures for cold-related deaths for England and Wales. That report shows that in 2010-11 there were some 25,700 excess winter deaths among old people in England and Wales, which is roughly the same number as last year. However, last year’s figure represented a big increase on the previous year. More people are dying as a result of living in a cold house in the United Kingdom than are dying in road traffic accidents each year.

The figure for excess winter deaths is defined by the Office for National Statistics as the difference between the number of deaths during the four winter months and the average number of deaths during the preceding autumn and the following summer. In the Conservative party manifesto for the 2010 election, these figures were described as “a national disgrace”, and that is absolutely the correct description. This is nothing short of a national catastrophe that affects every region of the United Kingdom. The motion before the House therefore calls for the Chancellor to take

“urgent steps to ease the burden on pensioner households”

right across the United Kingdom.

I want to refer particularly to the situation in our own area of Northern Ireland as an example of the dire circumstances facing many of our senior citizens living in cold houses.

[Mr Denis MacShane (Rotherham) (Lab)]

I shall certainly support the right hon. Gentleman in the Lobby tonight. Surely, however, the problem is poor pensioner households. The difficulty with the winter fuel allowance is that everybody over 60 or 65 gets it, irrespective of their means, and as a result it has become a generalised payment that helps the rich but does not give enough to the poor.

[Mr Dodds]

I understand that argument entirely. Indeed, the Select Committee on Energy and Climate Change pointed to it in its report back in 2010, and I will come on to deal with the targeting of resources and tackling fuel poverty. As for cold weather payments, there is clear evidence that many pensioners do not claim all the benefits to which they are entitled. The benefit of having a universal system is that it reaches all those who need it. I will deal with the issue that the right hon. Gentleman has highlighted in more detail later.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

In some of the trials aimed at trying to reduce fuel poverty in other parts of the United Kingdom, there has been a conscious drive to improve benefit take-up, and that has made a huge difference to people’s income, far more than the winter fuel payment would make.

[Mr Dodds]

It is a combination of all these factors. The winter fuel payment does play an important role, as the Government and the Minister have acknowledged. The Government made it very clear in the coalition agreement that they would maintain the payment. The hon. Gentleman is right to say that benefit take-up is extremely important, and we should all be doing more to encourage it. Back in Northern Ireland, the Executive have also taken steps to try to encourage benefit take-up. The winter fuel payment plays an important role in tackling this issue.

[Tessa Munt (Wells) (LD)]

Does the right hon. Gentleman support the scheme that was proposed initially by Somerset Community Foundation whereby the winter fuel payment, because it is a universal allowance, could be distributed through community foundations, with the assistance of the Department for Work and Pensions, so that people who are less fortunate and less able to heat their homes could take some or all of the winter fuel payment that is given by those who are a little wealthier ?

[Mr Dodds]

There has been a debate on that very issue over the past few days. I commend those who decide that because they do not need the winter fuel payment themselves, they wish to distribute it to those more in need. I welcome the initiative that the hon. Lady mentions.

[Mr Mike Weir (Angus) (SNP)]

rose—

[Mr Dodds]

Let me press ahead and make a little progress, and I will take more interventions in a short while.

I want to refer to the situation in Northern Ireland. Last winter, we had the coldest December in 100 years. In 2009-10, there were almost 1,000 excess winter deaths, 80% of which were of people aged 65 or over. On average, we get 910 such deaths per year, and that figure compares with 590 in 2001-02, so there has been a massive increase over that period. We have to understand that in addition to the stark figures on mortalities, for every death from cold there are eight hospital admissions and more than 100 visits to general practitioners and health centres. This is suffering on a vast scale.

The recent interim report from the Government’s independent review of fuel poverty, conducted by John Hills, states:

“Living in cold homes has a series of effects on illness and mental health.”

I will not go into all the repercussions of cold weather and of living in cold and damp housing on people’s mental and physical health. The interim report outlines those very clearly.

The winter fuel payment was introduced in January 1998 as a tax-free annual payment. Its purpose was and is to alleviate fuel poverty by giving specific help to encourage older people to spend more on heating during the winter. What is happening this year? For the past three years, the winter fuel payment has been £250 for those aged 60 and over, and £400 for those aged 80 and over. Despite spiralling fuel prices—we had a debate only a couple of weeks ago in this House on the crisis in the energy sector—and despite the extremely cold recent winters and the forecasts of a very cold winter to come, in 2011-12 the payment for pensioners aged 60 and over has been reduced by 20% to £200, and the payment for those aged 80 and over has been cut by a quarter to £300. That does not affect just a small group of people; it affects more than 9 million households and about 13 million people throughout the United Kingdom. Some 12.7 million of those people are in Great Britain and some 317,000 are in Northern Ireland.

As a result of the changes, the expenditure on winter fuel payments will fall from approximately £2.75 billion in 2010-11 to some £2.136 billion in 2011-12. That is a substantial monetary saving for the Treasury, but at what cost? That is the question that many people are asking. People in charities or third sector organisations who deal with older people’s issues are making it clear that they fear that this cut, which directly hits the pockets and incomes of pensioner households throughout the United Kingdom, will result in more illness, more disease and more deaths.

[Sarah Newton (Truro and Falmouth) (Con)]

The right hon. Gentleman is making a very moving case. I am sure that there is not anybody in this Parliament who is not concerned about excess winter deaths and this nation’s terrible legacy of not tackling fuel poverty among the poorest and most vulnerable. In his analysis for this debate, has he looked at the wide range of other measures that the Government have put in place to tackle the issue this winter and to make more lasting, wholesale changes in winters to come?

[Mr Dodds]

Interventions have an uncanny knack of happening at the precise moment when one is coming on to deal with the very issue that they raise. I will deal with the issue that the hon. Lady has raised. Of course there are other measures aimed at dealing with fuel poverty and coldness-related illness among elderly people. There are the cold weather payments, to which I referred, which some may argue are more specifically targeted. I will come on to that in a moment.

There is also the warm home discount. Recently, the Northern Ireland Assembly unanimously passed an appeal to the Government to think again on this issue, and when the Minister replied he referred to, among other things, the warm home discount scheme. However, the scheme applies only in Great Britain, because the legislation did not apply to Northern Ireland. Half a million pensioners benefit from that scheme in Great Britain, but pensioners in Northern Ireland do not. I am sure that the Minister will address that point.

There are also other measures. On the practical health side, there is the flu vaccination scheme. Northern Ireland has its own warm homes scheme, which I am glad to say was introduced under devolution by a Democratic Unionist party Minister. It has helped 80,000 households and has received widespread support in Northern Ireland. Northern Ireland also has a boiler replacement scheme and the social protection fund, which the Executive have brought forward. I understand that discussions are under way to address the specific issue of fuel poverty and the elderly in Northern Ireland. So yes, there are a range of measures, and we need to keep investing in such things as energy efficiency and home insulation to prevent fuel poverty in the long term.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

Will the right hon. Gentleman give way?

[Mr Dodds]

In a moment.

However, I say to the hon. Member for Truro and Falmouth (Sarah Newton) and the House that those other measures do not mean that we can cut the winter fuel payment to such a massive extent. It goes directly to our senior citizens and is an important tool. It is not the only tool—it goes only to senior citizens but, as I have said, they are disproportionately affected—but it is an invaluable tool in helping to tackle fuel poverty among the elderly.

[George Hollingbery (Meon Valley) (Con)]

Looking at the standard Library note on the issue, I am interested to see that the standard payment for the winter fuel allowance has been £200 and £300 since 2003, supplemented by one-off extra payments in the past three years, so the standard rate has remained the same. The right hon. Gentleman may also have noticed that in 2006-07 and 2007-08, that one-off payment was withdrawn and the amount paid was the standard payment of £200 and £300. Does he have any data about the increase in deaths in that period and whether there was a real effect of that money being withdrawn?

[Mr Dodds]

I understand the hon. Gentleman’s point about the standard rate, and of course when the Chancellor made his announcement about the winter fuel allowance earlier this year he did not dwell on it in any great detail. In fact, he passed over the issue almost completely, and we found out about it only in the small print. I understand the hon. Gentleman’s argument, but it beggars belief that whereas it was thought okay to have the increase in each of the last three years, the Chancellor and the Government have chosen this year to cut the extra payments for our senior citizens, despite the anxiety that was expressed throughout the House just a few weeks ago about extremely high and rising energy prices across the country.

When I raised the matter with the Prime Minister on 2 November, he said:

“we have kept the plans that were set out by the previous Government and I think that is the right thing to do.”—[Official Report, 2 November 2011; Vol. 534, c. 918.]

I have listened to the Prime Minister and Ministers speak many times about their spending plans and what the previous Government did, but I do not think I have often heard them say that. On virtually every occasion they have said that the previous Government’s plans were leading to economic disaster, yet on this issue, and only on this issue, they pray in aid the fact that the previous Government were, they say, going to cut the allowance, and that it is therefore the right thing to do. Frankly, that is not good enough. I leave it to the Opposition to outline what their position was.

The Government have decided to maintain health spending at a certain level, saying that it needs to be ring-fenced. They have said that international aid spending needs to be protected, and that we needed to spend money to intervene in Libya. I have no difficulty with any of those things—I support them—but now the Government say that it is right to cut payments to our senior citizens, at a time when they are suffering from extreme cold and high and rising energy prices, because that was what the previous Government had planned. That is a shabby argument, and not one that bears any kind of scrutiny. The Government should stand on their own two feet, argue their case for themselves and justify it to the House and the country.

I want to pay tribute to groups such as Age NI for their work in Northern Ireland, and to Age Sector Platform, which has been very busy in recent months running a significant campaign called Fight the Winter Fuel Cut. Recently, a group from Northern Ireland led by Margaret Galloway, Michael Monaghan and Nixon Armstrong travelled to Westminster and presented the Minister of State, the hon. Member for Thornbury and Yate (Steve Webb), with a petition. Hundreds of people are signing that petition every day.

[Lady Hermon (North Down) (Ind)]

Before the right hon. Gentleman leaves the subject of Northern Ireland, will he reflect on the fact that, for the first time, a commissioner for older people—and a very good one in Claire Keatinge, who was formerly the director of the Alzheimer’s Society—has been appointed? Does he see a role for the commissioner on the issue of winter fuel payments? How could she influence the Government to do the right thing? We hear a lot of criticism of human rights in the House, but there is a guarantee that no one in the UK should experience degrading treatment. For older people, the Government’s policy seems like degrading treatment. Does the right hon. Gentleman agree?

[Mr Dodds]

I certainly do agree with the hon. Lady, who rightly points to the important step taken by the Northern Ireland Assembly and Executive of appointing a commissioner for older people, which follows the appointment in Wales of someone who fulfils the same kind of role. I have no doubt that the commissioner, who I agree is an excellent appointment, will be active in putting to Northern Ireland Executive Ministers the case for our older people. As I outlined earlier, a number of things are currently being undertaken by the Executive, and they are considering others, to help our older people. However, what the hon. Lady says on winter fuel payments, which affects the entire country, and which is for decision and debate in this House, should carry some considerable weight.

On whether the allowance is poorly targeted and whether it is the appropriate way in which to deal with fuel poverty—the right hon. Member for Rotherham (Mr MacShane) mentioned this—the argument against the universal payment principle overlooks the fact that many of those entitled to, for instance, pension credit, do not receive it, for a variety of reasons. In Northern Ireland, somewhere in the region of £60 million is not claimed by those who are entitled to pension credit. Those people are hit with a double whammy: they do not get pension credit or cold weather payments, because the latter go only to those who claim the former. The only way to ensure that the most vulnerable people get financial help is to keep the universal payment. I believe that there is no dispute between the Government and those who agree with me, because the Conservative party pledged in its manifesto that the allowance would be kept.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

The right hon. Gentleman makes a potent argument, but does he share my concern that cold weather payments are triggered by monitoring equipment in only certain parts of the country? My area shares the same climate characteristics as his, and my constituents regularly lose out, which is why the universality of the wider payment is a much better system.

[Mr Dodds]

The hon. Gentleman rightly points to one of the major deficiencies of cold weather payments, which has also been raised by DUP Members.

[Mr David Hamilton (Midlothian) (Lab)]

Another point is that, currently, cold weather payments are not taxed—they go directly to the person and the payments cover everyone. If the money is put through in different ways, it could be taxed and off-takes would come into operation. That would affect not just those 13 million people, because the families of many old-age pensioners supplement their parents' incomes to make sure they are okay.

[Mr Dodds]

The hon. Gentleman makes a valid point.

The Institute for Fiscal Studies has said that people are 14 times more likely to spend the winter fuel allowance on fuel than they would be if their incomes were increased in other ways. If an allowance is given specifically to spend on fuel, people are more likely to spend it on fuel; they would be less likely spend an allowance on fuel if it was not designated as a fuel poverty measure. There are strong arguments—for reasons that hon. Members and I have outlined—for retaining the universal payment of a winter fuel payment at current levels, and for indexing payments to the rising cost of energy. Some have argued that at a time of pressing demands on the Treasury and given the state of the economy, that would be a luxury we can ill afford. As I have indicated, money has been found for the priorities that the Government have deemed essential: the protection of international aid budgets, taking a penny off fuel duty, ring-fencing NHS budgets and so on. It is vital, however, that we also prioritise saving the lives of our senior citizens in times of very cold weather.

The chief medical officer has said that the annual cost to the NHS of treating winter-related diseases resulting from cold private housing is estimated at about £860 million, but that does not include additional spending by social services, economic loss through days off sick, and so on, which means that the total cost to the NHS and the country as a whole is unknown. However, we do know that every £1 invested in keeping homes warm saves the NHS 42p in health costs, so again this money would be well spent, and it could save the NHS more money in the long term.

Levels of fuel poverty in this country are staggering: in England, 18% of households are in fuel poverty; in Wales, it is 26%; in Scotland, it is 33%; and in Northern Ireland, it is 44%. It is right across the board. That equates to 302,000 households in Northern Ireland alone, 75,000 of which are in extreme fuel poverty, which means that they spend 20% or more of their income on fuel. Furthermore, almost half of all fuel-poor households in the country are headed by over-65s, so clearly fuel poverty disproportionately affects the elderly to a staggering degree.

Yet the situation will only get worse. I have highlighted the rising cost of fuel. In the past five years to October 2011, the retail price of gas in the UK rose by 52%, and the price of oil rose by 86%. In Northern Ireland, the situation is much worse. The price of home heating oil, which is a product that we depend on, has risen by 63% in the past two years and by 150% since 2003. Almost 70% of homes in Northern Ireland depend on it for their primary source of heating—that figure is 82% in rural areas—yet the price of oil has risen beyond anyone’s imagination.

[Mr Weir]

The situation is similar in rural Scotland. I have previously suggested—I wonder whether the right hon. Gentleman agrees with this proposal—that the Government make the fuel allowance available earlier in the year to those who rely on home heating oil, when price and demand are lower, allowing them to fill up before the winter hits and the price tends to rocket.

[Mr Dodds]

Yes, the hon. Gentleman raises an important point about those who depend on home heating oil. These are one-off payments of about £600 for 900 litres of oil—it is a lump-sum payment—so it would be extremely helpful to people to have that money in their hands when they were able to buy more oil at a lower price. He makes an extremely good point.

The picture is stark: we have much higher energy costs; there are considerable pressures on pensioner household incomes owing to lower savings returns; and increases in VAT are hitting everybody hard, but hitting pensioners particularly hard. Furthermore, pensioners tend to be on fixed-retirement incomes, and we know that, according to a recent report, the cost of living has risen by one fifth for older people over the past four years, compared with 14% for the population as a whole.

At the last election, the parties made a number of pledges. On pensioners, the Conservative party described the number of excess winter deaths as a national disgrace, and it said:

“we want to set the record straight. Labour are sending cynical and deceptive leaflets to pensioners’ homes saying we would cut their benefits. This is an outright lie, and here it is in black and white: we will protect pensioners’ benefits and concessions, and this includes: the Pension Credit; the Winter Fuel Allowance; free bus passes; and, free TV licences.”

I defy anybody out there in the public to interpret that statement as anything other than a pledge not only to maintain the existence of the winter fuel allowance, so that it continued to be paid as a benefit, but to maintain it at the same rate at which people were receiving it when the election was called. What other interpretation can we put on those words?

The Liberal Democrats said in their manifesto before the last election that they would reform winter fuel payments, extending them to all severely disabled people, and that this would be paid for by delaying age-related winter fuel payments until people reached 65. However, the Minister, who is in his place, said earlier this month:

“There are no plans to extend provision under the winter fuel payment scheme.”—[Official Report, 3 November 2011; Vol. 534, c. 719W.]

The coalition programme for government stated:

“We will protect key benefits for older people such as the winter fuel allowance,”

and so on. Then there is the argument about the Labour party’s position and what Labour was proposing—or not proposing—to do had it remained in office.

I point to those pledges for this reason. People say today that politicians, Parliament and this House are disconnected from ordinary people. People are losing faith in politics; and is it any wonder, when they read those clear statements and are led to believe one thing, but then, as soon as the election takes place and the same politicians come to office, they turn round and do something entirely different? Their argument in doing so is: “Well, we’re only doing what the previous Government said they would do.” When people can so cynically disregard the pledges that they make on such an important issue, that is another reason for the disconnect between politicians and the public out there.

[Sir Robert Smith]

I understand the right hon. Gentleman’s argument, but does he think that one reason for the disconnect is perhaps also the previous Government’s mistaken decision to raise the rate to a level that they did not think they could afford to maintain in the long term? That was where the disconnect started.

[Mr Dodds]

I have not heard it said that the level of the payments made over the last three years was unsustainable. I have never heard anybody make that argument.

Let us be fair: the Government have made choices. They have decided, because of the economic situation and the deficit, to cut expenditure in certain areas. In other areas, they have decided to maintain or increase spending. That is the choice of the Government and the majority of the Members of this House; but do not let anyone pretend that the Government had no choice about winter fuel payments or that they had to do what they did. They did not have to do it: they chose to pick this area for cuts and not others. That is a reprehensible choice—a choice that is not justified either economically or morally. At a time of so many excess winter deaths among our older population, it is appalling that cuts should be aimed at that sector of our population.

[George Hollingbery]

Will the right hon. Gentleman give way?

[Mr Dodds]

I am pressing to a conclusion now. I am sure that the hon. Gentleman will want to catch Mr Speaker’s eye in order to speak, as other Members will want to.

The winter fuel payment should be restored to the amount that was paid over the past three years. Indeed, I would go further and say that future payments should be indexed to reflect rising energy prices. After all, when the winter fuel payment was initially introduced, it paid over half the cost of an older person’s fuel bill, whereas the current level is nowhere near high enough to meet those bills. Our attitude to this issue goes a long way towards illustrating our attitude to the treatment of our older people throughout the country. I hope that the whole House will join me and my right hon. and hon. Friends in supporting the motion this evening, and I commend it to the House.

--- Later in debate ---

[Steve Webb]

Well, obviously, cynicism would be well beyond this Government. The rates of public spending are published through a comprehensive spending review period and for the rest of this period the figure we inherited was £200. That, as I say, was our baseline.

Another strange thing that went on was to do with the cold weather payment. That is the money paid when it is freezing cold to the poorest and most vulnerable people—the poorest pensioners and the poorest disabled people. Temporarily, pre-election, that was increased from the regular £8.50 to £25 a week. Temporarily, too, for the year after the election, as announced before the election, it was to be maintained at £25 a week. You will not be surprised to learn, Mr Speaker, that beyond that, it was planned to be slashed back to the £8.50 a week level. In other words, had we done nothing and taken no action, the winter fuel payment would have reverted to its £200 level and the cold weather payment paid to the most vulnerable when it is most cold would have reverted to £8.50 a week.

Let me remind Members that that was the baseline from which we were trying to find something in the order of £70 billion to £80 billion-worth of savings, so the question was not whether we should cut the winter fuel payment or the cold weather payment, but whether we could find the money to reverse the planned cuts, and thus have to find still further cuts from across the budget.

I agree with the right hon. Member for Belfast North on one point—that Governments have to make choices about priorities. He listed some of the priorities of this Government: ring-fencing the NHS, for example, about which I suspect the pensioners of Northern Ireland will be glad. He also mentioned the penny on petrol duty. I was not aware that it was his policy that we should not have reversed that, but I am happy to be corrected.

[Mr Dodds]

I am sure that the Minister was listening when I said that I supported those priorities. My point was that the Government had decided to increase or maintain spending in certain areas but to target cuts on other areas, and I wanted to know why they had targeted our senior citizens.

[Steve Webb]

I am grateful to the right hon. Gentleman for confirming that the measures that he listed were measures that he supports. I had assumed that, having begun by telling the House that we should spend an extra £600 million on something, he would in the course of his speech identify something on which we should spend £600 million less. Given that he spoke for 30-odd minutes, I may have missed it.

[Mr Dodds]

I could have taken much more time—indeed, I had a page devoted to areas that we could cut—but I considered it to be in the interests of the debate to leave time for others to speak. I am sure that my colleagues will make similar points, but may I begin by suggesting that the Minister reverse his attachment to Europe and save the £400 million that is going to the External Action Service, along with all the other money that is being wasted? And what about the £80 million that he wasted on the alternative vote referendum, which could have gone towards helping older people rather than being wasted on a trivial political exercise?

[Steve Webb]

It is intriguing that, in presenting a 30-minute explanation of why we should spend a further £600 million, the right hon. Gentleman should remove the bit about where the money should come from, which seems to me to be fairly central to the debate.

Faced with that baseline of a proposed reversion to a £200 winter fuel payment and an £8.50 cold weather payment, we could simply have gone ahead with the previous plans, and found our £70 billion to £80 billion on top of that. However, we took the view—as does the right hon. Gentleman—that fuel poverty matters, and we therefore found the money that would enable us to reverse the planned cut in the cold weather payment. I believe that ours was the right priority. If we are concerned about the most vulnerable when it is most cold in the coldest of winters, we should bear in mind that an increase from £8.50 to £25 gives people the confidence to turn up their heating when it is bitterly cold. The system even allows cold weather payments to be triggered by a forecast. It need not actually have been freezing cold; we merely have to expect it to be freezing cold.

Last winter in Northern Ireland, we made 672,000 cold weather payments at a cost of £16.8 million. Had we not reversed the earlier decision, the value of those payments would have fallen by about two thirds. Our decision put about £10 million into the hands of the poorest pensioners and disabled people in Northern Ireland during a bitterly cold winter, and I am proud that we made it.

--- Later in debate ---

[Steve Webb]

My hon. Friend is quite right. In Northern Ireland, dependence on heating oil is substantially greater than it is on the mainland and even in a semi-rural constituency such as my own, oil prices, oil supply and so on are big issues. I am grateful for her kind words about our ministerial colleagues as these are important matters.

Let me go back to the issue of fuel poverty. Clearly, it has a number of components and one is income. We focused on a change from last year’s rate to this year’s of less than £1 a week in the winter fuel payment and that is what we are talking about today. Instead, we have taken the basic state pension, which for 30 years has been declining relative to wages, and put a triple lock on it so that every year from now on, pensioners in Great Britain and Northern Ireland will see their pensions rise by the highest number of inflation measured by the consumer prices index, earnings and 2.5%. We are in a strange period in which inflation is greater than earnings, but in most years, earnings have grown faster. That will mean that as we return to more normal times, pensioners will enjoy above inflation standard of living increases year after year.

The cost of that commitment—I hope that the Chancellor is not listening at this point—will add a total of £45 billion to the amount we spend on pensions by the mid-2020s, which gives a sense of the magnitude of what we have announced. That is rather invisible at the moment, because prices are higher than earnings. When I signed the legislation into law last year, I expected bells to peal and for there to be confetti on the floor and so on. That has not quite happened yet, because people have not seen the impact. In the longer term, it will give a sustained boost to the real incomes of pensioners in Northern Ireland and Great Britain.

[Mr Dodds]

The Minister raises the issue of the triple lock. Previously, in the autumn statement the Chancellor has always announced the increase in line with the September rate of inflation, which would mean a 5.2% increase. Does the Minister expect the Chancellor to do the same this year, and would he rebuke the Chancellor if he were to take an annual inflation figure? Given what he has said, I take it that he is very much in favour of the former.

[Steve Webb]

The Chancellor was asked this very question at Treasury questions recently, and he confirmed, as is entirely in line with my view, that the triple lock is something of which we are proud. I am sure that we will be just as proud next Tuesday when he announces his verdict.

This is not just about the basic state pension: it is also about pension credit. As has rightly been pointed out, we need to make sure that pension credit take-up is maximised and we already do many things in that regard. Some people may not know that they can ring an 0800 number—a freephone number—to claim pension credit. They might think there is a long and complicated form to fill out, but in fact they can claim it over the phone and can also claim housing benefit and council tax benefit at the same time. We also undertake a lot of activity to engage with people who might be eligible. For example, we mention pension credit to people when they claim the state pension or when they report a change in their circumstances such as a bereavement. We also have a visiting service so that if people are not online or perhaps are not able to get out, DWP and local authority staff go out to their home and fill in forms with them in their front room.

As a Department, we are doing quite a lot to encourage take-up, but I am aware that the Democratic Unionist party manifesto mentioned trying to pay pension credit automatically. We have been piloting that in Great Britain and I can update the House on that exercise. We took a random sample of about 2,000 customers who were not receiving pension credit but whom we thought, based on what we knew about them, appeared to be entitled to it. For 12 weeks, we paid them the money anyway without their having to make a claim and then we contacted them and said, “By the way, we’ve just given you some free money. This is what we think you would get on pension credit—would you like to make a claim for it?”

The delivery phase of that study ran from November 2010 to March 2011 and an evaluation is now under way, but I can update the House on the early findings from that research. We found that by August, after the process had finished, a percentage of those involved in the study had successfully claimed pension credit. I am going to ask Members to think to themselves what percentage I am about to say, assuming that no one has read what we published. So, of the 2,000 people to whom we gave pension credit because we thought they were entitled to it, what percentage do hon. Members think then successfully claimed it? I shall not do a straw poll at this point. The answer is just 9%, which is a very low figure. Given that 3% of those in the control sample claimed, if we had done nothing we would have had 3% claiming anyway, whereas we had 9%.

We found that those who did go on to claim pension credit did so because the study had raised their awareness of the benefit and their potential eligibility for it, as one might expect. We talked to some of those who did not claim and found that some of them retained the view that they were not entitled to it even though we had contacted them and given them the money. Some felt that they did not need it, which is fair enough, some did not claim because of health issues, others forgot and some did not quite understand what was going on. It was a complex process, and we will publish a rigorous evaluation of it. It would be great if we could spot all the folk who are not taking pension credit and get the money to them automatically, but the early indications are that that will not be the case and that this approach is not a silver bullet that will enable us to deliver the money automatically. However, we will see what lessons we can learn from the pilot and I shall be happy to update the House on that a bit nearer the time.

--- Later in debate ---

[Maria Miller]

I think the House will draw its own conclusions from the fact that the hon. Lady again failed to take the opportunity to make clear what the Labour party’s policy is on this issue. The coalition Government have made permanent the increase in the cold weather payment from £8.50 to £25. Again, hon. Members on both sides of the House will be pleased to hear that that money is going to the most vulnerable of our constituents. Some 2.7 million pensioner households receiving pension credit also receive the cold weather payment.

The coalition Government are taking real steps to protect pensioners, which is why one of our first actions was to restore the earnings link with the basic state pension. We also gave a triple guarantee that pensions will be increased by the highest of growth in average earnings, price increases or 2.5%. Pension credit is also available for those who have low incomes, and we have continued key support for older people such as free NHS prescriptions, travel concessions and free television licences. For the longer term, we will need to help prevent people from retiring into poverty. Again, our actions are speaking louder than mere words, through the automatic enrolment in workplace pensions.

Hon. Members have made a strong case as to why fuel poverty is a real issue for many vulnerable people, including pensioners living in Northern Ireland. The differences in Northern Ireland are clear, and hon. Members have made that point in this debate. That is why Northern Ireland receives not only the support from pension credits, winter fuel payments and cold weather payments, which are provided for the rest of the UK, but a block grant of some £10.4 billion in funding for the Executive to address the particular priorities of Democratic Unionist party Members and other Northern Ireland Members. That money goes along with some £6 billion to pay for the cost of social security and pensions. We should not forget that Northern Ireland receives almost 25% more in spend per head of population than England, in recognition of the real issues that individuals living in Northern Ireland face.

[Mr Dodds]

The Minister makes a very valid point, but will she also acknowledge that, as we have highlighted in this debate, the people have horrendously higher needs in Northern Ireland, which arise because of ill health, fuel poverty and so on? Our energy prices are also much higher than those in the rest of the United Kingdom, so what she says needs to be put into perspective.

[Maria Miller]

I understand the point that the right hon. Gentleman is making. Indeed, that is why the block grant is so sizeable, and it is important that we recognise that.

Although we clearly want to address these issues here in Westminster, it is important that we work closely with colleagues in the Northern Ireland Executive. As the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), mentioned, I was in Belfast only last week meeting the Minister for Social Development to discuss child poverty issues in particular. Addressing fuel poverty is a devolved matter for the Northern Ireland Executive, and they are well placed to determine what measures should be in place to meet local needs. Hon. Members will be aware that earlier this year Northern Ireland launched its own fuel poverty strategy, which set out key areas for improving the situation for local people. I hope that after today’s debate the Executive may consider some of the initiatives in England and Great Britain, particularly the obligation on energy suppliers, which could well be other ways to improve things over the water.

We heard important contributions from right hon. and hon. Members across the House today, but there have been some puzzling absences. Where is the shadow Minister for older people? Where is the shadow Secretary of State for Work and Pensions? We welcome the hon. Member for Kilmarnock and Loudoun, but she is the shadow Financial Secretary—perhaps that is telling in terms of how the Opposition are dealing with this issue.

The right hon. Member for Belfast North (Mr Dodds) made a number of important points, and he talked about benefit take-up. I hope that he can bring himself to support the work that my Department is doing, through the introduction of universal credit, to improve the working age take-up of benefits. That is slightly different from the issue we are discussing today relating to pensioners, but it will make an important contribution.

The hon. Member for Kilmarnock and Loudoun made a number of important points, and I thank her for that. The very existence of the winter fuel payment does help with people’s mental housekeeping and reassures older people that they can afford to turn up the heating, as she recognised in her contribution. However, I must say to her that tackling fuel poverty in Northern Ireland is a matter for the Northern Ireland Executive. We have to make sure that those important devolved matters are dealt with at a local level. As I said, she was not clear about the Labour party’s stance on the winter fuel payment, but perhaps she will clarify it in the closing stages of this debate—or perhaps she will not.

The Minister of State talked about the importance of prioritising those most in need and he highlighted the fact that we have reversed Labour’s cut to the cold weather payments. My hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) highlighted the fact that we are dealing with a complex set of factors. I have to be careful now, because I think that I have to correct the hon. Member for South Antrim (Dr McCrea). He said that we were cutting support for the most vulnerable but that is absolutely not the case. We are reversing Labour’s proposed cuts to the cold—

[Mr Dodds]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

Oral Answers to Questions

Lord Dodds of Duncairn Excerpts

Monday 18th July 2011 Commons Chamber

[Maria Miller]

We have indeed had some important conversations about the matter. It is not for me to answer for the record of the previous Government, although I point out to the right hon. Lady that 40% of disabled people who left through the 2008 redundancy scheme retired. The figures that she quotes need to reflect that. I can assure her that we will do everything we can to make sure that people affected by any changes in the future are given the support that they need.

[Mr Nigel Dodds (Belfast North) (DUP)]

Has the Minister had any discussions with the Department for Social Development in Northern Ireland about some of the excellent initiatives that it is undertaking, particularly in relation to young people coming out of school and college?

[Maria Miller]

We have many conversations with the devolved Administrations. I cannot recall anything about that subject particularly, but I will pick that up later.

Welfare Reform Bill

Lord Dodds of Duncairn Excerpts

Wednesday 15th June 2011 Commons Chamber

[Dame Anne Begg]

My point is that if the Government take contributory ESA away from this group of people and then change the criteria so that they no longer qualify for DLA or the new PIP, those people will end up with no independent income at all. That is the connection. We cannot look at the Government’s proposals to remove DLA and introduce PIP in isolation, because they are putting disabled people under all sorts of other obligations. If we look at the benefits in isolation, we will get into trouble, and that is what leads to the fears of disabled people, because many of them, particularly those with more profound disabilities who are trying to live independently in the community, have complex funding packages that they have put together to make things work for them. They are dependent on the personal care element of DLA for their care and on housing benefit to pay for their rent; they are dependent on local government facility grants to adapt their houses; and they are dependent on the mobility element of DLA to provide them with transport or, for many of them, with cars through the Motability scheme. These are complex packages, and if the Government interfere with some of them the whole edifice could collapse. That helps to explain why there is so much fear among people with disabilities about what the Government are doing. They feel that the Government are not seeing the whole picture—that they are seeing different pieces of the jigsaw but not putting it together or looking at the impact that those pieces will have on individuals.

Part of the problem with universal credit and with PIP is that we do not yet know the criteria, the payments or who will qualify for what, so it is impossible for individuals to sit down with all the new regulations, which nobody has seen because they have not been published, and work things out, saying, “Right, in my condition, I know I will get that, that and that, and I can add that together and that will then tell me whether I am going to be better off or worse off under the new proposals.” It is difficult to judge the situation, because we do not have that detail.

[Mr Nigel Dodds (Belfast North) (DUP)]

The hon. Lady is doing the House a great service in teasing out the complexities, and in illustrating just exactly what is and is not known. Is not that at the root of many problems? How can we proceed with these measures when our constituents have so many unanswered questions? They have asked me, but I am unable to relay with any certainty what is going to happen to them, so surely the issues that have been raised deserve full clarification. Certainly, what has been illustrated as definitely going to happen demands that the amendments be carried.

[Dame Anne Begg]

Much of Monday’s debate was about the fact that the regulations for PIP, for housing benefit and for universal credit do not exist, so it is difficult to judge exactly what will happen to individuals.

There is also a fear among disabled people, because the Government sometimes take a simplistic view of what a disability might be. Disability living allowance was quite clear, because it was to cover the extra costs of disability, but one worry is that, under the PIP proposals, aids will be taken into consideration. The implication is that, if someone has an aid, they do not have the extra costs associated with their disability—that somehow the aid will miraculously take away those costs.

It has been said—the Minister did so in front of the Work and Pensions Committee—that, if a wheelchair-using Olympic athlete has a university degree, it is reasonable to place some work obligations on them. That might be the case, but being an Olympic athlete who needs a wheelchair does not take away the need for an adapted car. They still need the car, the wider parking space, to build the ramps to get into their house, the adapted shower that the local authority’s facilities grant often does not pay for, and the adapted bathroom.

In many cases, therefore, aids and adaptations do not take away the need for extra money. In fact, people with disabilities sometimes need the extra money to run some of those aids, such as an electric wheelchair and the extra costs that that entails, or an electric buggy that gets them around the shops. Rarely are such aids supplied by the NHS or, indeed, by the local authority, and DLA was such a good benefit because people could choose how they used it in order to fulfil their needs and lead an independent life.

If disabled people have work obligations placed on them, they will need extra money for travel costs. I could be as fit as possible and have the best super-duper wheelchair in the world, but with the best will in the world I am still not going to be able to get on the underground. It just will not happen, so we need to ensure that we get PIP right, and to ensure that it enables disabled people and does not hinder them.

Disability living allowance, particularly the mobility element, acts not only as a passport but as a proxy for all sorts of other things. Local authorities and organisations such as railway companies and cinemas use an individual’s qualification for upper-rate mobility allowance as a proxy for the fact that they must be disabled and therefore qualify for a disabled railcard, a disabled cinema ticket or a blue badge—or, in my local authority, a green badge, for which we also have to pay 20 quid a year, so it is not as though we are getting it for nothing. That means that people do not have to be assessed time and again, which makes things much easier. For many people, the knowledge that they have been assessed and qualify for upper-rate mobility allowance is more valuable than the money. I would not say that the money is not important—of course it is—but access to a blue badge with reasonable ease is also incredibly valuable.

Welfare Reform Bill

Lord Dodds of Duncairn Excerpts

Monday 13th June 2011 Commons Chamber

[Yvonne Fovargue]

I will, but to say that local government is the main funder of CABs is to oversimplify the matter. I know of one bureau that had at least five different funding streams—the primary care trust, legal aid, the local authority, housing associations and a hospital. CABs rely on a mixture of funding streams, many of which are being reduced at the moment. Local authorities cannot take up all the slack, much though they should be continuing advice services.

Investing in early advice saves money. Avoiding costly tribunals and appeals is vital, and people who do not have access to advice are more likely to pursue their case to the appeal stage, costing them money and stress. Public confidence in any new system is vital. Advice on welfare benefits is crucial, and I urge the Government to accept amendment 26.

[Mr Nigel Dodds (Belfast North) (DUP)]

The hon. Lady is making a powerful point. The CAB in my constituency—in the Rathcoole area, which is very needy—does excellent work along the lines that she has described. Does she agree that whatever one’s views about the other amendments or the Bill, everybody should support amendment 26? Clear advice to constituents and clients is what it is all about, whatever one’s views.

[Yvonne Fovargue]

I thank the right hon. Gentleman, and I agree totally. The amendment would simply give people the opportunity to receive advice about their rights and responsibilities. That is crucial at any stage, but particularly when a new welfare benefit system is brought in. I urge all Members to support the amendment.

State Pension Reform

Lord Dodds of Duncairn Excerpts

Monday 4th April 2011 Commons Chamber

[Steve Webb]

I am grateful to my hon. Friend and I know of the expertise she brings to the Select Committee on these issues. We propose that bringing up the next generation or caring for an elderly relative will be valued by society just as much as a high-paid job. A year will be a year will be a year. If someone is contributing to society in that way or in paid work or in other ways, it will bring them one thirtieth of a single state pension. We think that is a big step in the right direction, which will be widely welcomed around the House.

[Mr Nigel Dodds (Belfast North) (DUP)]

We welcome the Green Paper and the consultation that will ensue. We agree that moving away from means-testing and complexity towards a universal flat-rate pension is greatly to be welcomed. The Minister says that this will not entail spending any more money. Given that so many pensioners today do not claim all the means-tested benefits to which they are entitled—this is a big factor in these reforms and should again be welcomed—does it not mean that more money will need to be spent to make up for the fact that people do not claim? If so, will the Minister guarantee that that money will be provided?

[Steve Webb]

The right hon. Gentleman has made an important point, namely that under the current system many people are entitled to top-ups and do not claim them, whereas pretty much everyone claims the state pension. The new system will guarantee that a great many people will live clear of the poverty line for the first time. As the right hon. Gentleman says, a price tag is attached, and we have factored that into our costings. Although the prospective state pensions of the very highest earners will be lower than they would otherwise have been, many lower earners and people who would not otherwise have taken up their entitlement to pension credit will be in a better position, and we consider that to be a fairer system overall.

Disability Living Allowance

Lord Dodds of Duncairn Excerpts

Wednesday 9th March 2011 Westminster Hall

[Guto Bebb (Aberconwy) (Con)]

I, too, congratulate the hon. Member for Arfon (Hywel Williams) on securing this debate. I feel nervous about contributing to the discussion that he has led, as he understands the issue and the field extremely well. I associate myself with the comments of my hon. Friend the Member for Banbury (Tony Baldry): although I feel unqualified to comment on the issue, as an MP, I respect the fact that people come to my surgeries with concerns, and it is important to raise those concerns with the Minister.

I also associate myself with the comments made about the active way in which the Minister has responded to correspondence, especially in relation to constituency matters that I have raised. An effort has been made to communicate, and that communication has been detailed and worth while, and it has been appreciated by constituents. The fact that we are looking at delaying changes to the mobility component until 2013 is welcome. It is a difficult and complex area, and that complexity must be looked at carefully before we implement any changes.

Before I look at the mobility component of DLA, I would like to make a point about the work capability assessment process. I am MP for a constituency where about 42% of the population are first-language Welsh speakers. Time and again, people who come to my surgeries are expected to attend a work capability assessment in which they must explain their position and say whether they are capable of working. Often, they have to do that in English, even though the Welsh Language Act 1993 requires them to be able to do it in Welsh. When someone is in a stressful situation such as that, it is unacceptable that the Department is unable to provide a bilingual service. I have received assurances that the Department is working within the demands of the Welsh Language Act, but time and again the situation on the ground in north Wales does not correspond with those assurances. I would like the Minister to respond to that point.

When I received a letter from the Minister, I almost felt as if she had been in my constituency surgery. The arguments about the complexity of the mobility care component in care homes show that the current situation is not coherent. From talking to people in care homes, it becomes clear that each care home deals with the mobility component in a different way. I have been quite proactive on this issue because I represent a constituency with a high average age—I think I am right to say that the constituency of Aberconwy has the highest average age of any constituency in Wales—and as a result, there are a lot of care homes. My office has spoken to 17 care homes to discuss how they deal with the mobility component and whether it is funded by the local authority. From those 17 care homes, we have had 17 different answers, so the chaos surrounding the issue is clear. It is difficult to move forward with a policy unless we acknowledge that the duplication mentioned by the Department is not constant or ongoing, and that the situation is very different from one case to another. The Government, and the Minister in particular, are trying extremely hard to address the issue in a fair and coherent manner, but to do that we need a long consultation process, which I will certainly feed into.

On a more personal level, it is crucial that consultations take place in a responsible manner. It was distressing to see the parents of a 57-year-old individual who has been in a care home all her adult life come into my surgery. Both those parents are over 80 years old, and are distressed because they believe that the mobility component will be lost. They feel distressed by that, and it is important to point out to constituents that we are genuinely undergoing a consultation process. It is important to ensure that that process is understood and communicated.

[Mr Nigel Dodds (Belfast North) (DUP)]

The hon. Gentleman makes an excellent point as part of an excellent speech. These are real anxieties and concerns because people see that the mobility component is scheduled to be removed. I welcome the fact that the consultation period has been extended, but that compounds the period of great uncertainty for people. There is a bit of a dilemma.

[Guto Bebb]

There is, but I am sure the right hon. Gentleman would agree that a Government who consult and listen are a Government who will succeed. The Department is genuine about the consultation and about listening, and that must be communicated to individuals. We do not want to create undue distress, but I do not think that the Government have communicated well on this issue, and we must take responsibility for that.

I understand that I must conclude my comments before 10.40 am, so I will raise a couple of important points. As I have said, the Minister has been good in responding to almost all my questions, but one question about the discussions the Department has held with the Welsh Assembly Government on this issue has not yet received a response. An excellent point was made about the fact that we are dealing with a complex situation in which the Welsh Assembly Government are responsible for care and social care, but the benefit system is with Westminster. I am slightly concerned that, as yet, the question about what discussions have been held between the Welsh Assembly Government and the coalition Government has not received a response. I am sure that the Minister will write to me or confirm that there have been discussions. We are trying to ensure that the system works, and it is imperative that the social care element and the benefit system interact positively. Part of that interaction in a Welsh context involves good, positive discussion between the Government in Westminster and the Government in Cardiff Bay.