If he will make a statement about the ending of the social security agreement between the United Kingdom and Australia and its effect on pensioners reaching pension age after 28 February 2001 who have spent periods of their working life in Australia. [136106]

People who are already receiving benefit with the help of the agreement with the Australian Government will not be affected when it terminates. We are aware that there are implications for people currently residing in the UK who had previously lived in Australia and are not yet retired. We are actively considering the full implications of the Australian Government's decision, and in particular what we can do to protect the position of those people.

More fundamentally, will not the Government end the discrimination whereby they index-link the British pensions of British pensioners living in the United States and European Union countries, but not those of pensioners living in the Commonwealth countries—Australia, Canada and New Zealand? Will the Government at least make arrangements to protect the thousands of United Kingdom pensioners who will retire after 28 February next year and who are unable to count their years in Australia towards their basic pension, and who do not have the opportunity to supplement their pension?

We have no plans to change the present policy. I must make that clear, so that we do not give anybody false information. I have already said that we are looking actively at what we can do to protect those people who retire after the agreement finishes at the end of February. A perverse arrangement could come about whereby the UK Government could gain from the change. I do not see that that would be morally justified, so we want to do what we can to protect such people. However, there are a few myths that we must knock on the head. I must tell the right hon. Gentleman that there is no basic state pension in Australia: it is all means-tested. [Interruption.] It is not all means— tested in this country. If the Government did change their policy in respect of Australia, we would be paying to the Australian Treasury. The only people who would gain in Australia are those who are so well off that they do not get the age pension in Australia.

What is the justification for the disparity in arrangements between Commonwealth countries, as compared with the United States? There is no logic in it. Is not there a need for a conference of social security Ministers of the key countries where ex-pats live? Is not liberty also involved? People want mobility in retirement, and the current arrangements are an impediment to that, particularly when abroad they can enjoy not necessarily the support of the taxpayer, but the love and succour of their families?

I have already said that I am not prepared to defend the logic of the present situation. It is illogical. There is no consistent pattern. It does not matter whether a country is in the Commonwealth or outside it. We have arrangements with some Commonwealth countries and not with others. Indeed, there are differences among Caribbean countries. This is an historical issue and the situation has existed for years. It would cost some £300 million to change the policy for all concerned. We must also consider that as the European Union expands—pension upratings are, naturally, paid in the EU—the issue will not go away. I accept that.

What assessment he has made of the relationship between the indices used to calculate annual pensions upratings and patterns of expenditure by pensioners. [136108]

Each year, when considering the uprating, consideration is given to a wide range of factors, including the retail prices index. We recently announced our intention to increase the basic state pension by more than prices, and indeed by more than earnings.

Will the Minister confirm that in two years the basic pension will be uprated on the basis of the same index as that which gave us the miserable 75p this year? Is it not odd that it contains elements that are not relevant to pensioners, and does not include items that are highly relevant, particularly to the poorer pensioner? Is it not time to stop messing about with indices, and to move instead to an independent review body? That is good enough for judges, generals and even for Members of Parliament. Should it not be good enough for pensioners?

:I did not hear a thank you in that, or any reference to the fact that the pension is to increase by 7.4 per cent. next April. I heard a reference to poorer pensioners, many of whom will get a £14 a week increase next April. That is the reality. I am more interested in making sure that we deliver what we promised next April than in discussing the hypothetical issues relating to two years hence.

On patterns of expenditure, does my right hon. Friend agree that the old motto, "From each according to his means, to each according to his needs," is still a good one and might apply to pensions? Pensioners with means should accept some responsibility. Is my right hon. Friend aware that in my constituency there is concern about the application of the difference between personal and nursing care for the old in long-term care? Will he continue to keep this sensitive matter under review, as it causes deep concern to pensioners in Rotherham?

I cannot give my hon. Friend a substantive answer, but I understand that the matter will be sorted out in forthcoming legislation, subject to the contents of the Queen's Speech.

Does the right hon. Gentleman recall using the lowest possible index to increase state pensions last year and the highest possible index to raise duty on petrol last year? Does he further recall saying that any concessions on fuel tax would mean no more money for pensioners? Can he now explain to us at what point the Chancellor of the Exchequer decided to do a double U-turn?

We considered many issues in relation to the uprating that we announced. We did not use an index.

What recent representations he has received on the level of the state pension. [136109]

Many pensioners have welcomed the increase in pensions and the winter fuel payment of £200, which is being paid from today.

Although, according to my mother, any increase in the basic state pension is welcome, will the right hon. Gentleman explain why, under this rotten Government, the number of pensioners living in poverty has increased by 400,000? Does he regard the basic state pension as adequate at the moment? If it is only adequate now, will he explain why the Government, supported by the Liberals, have sustained the basic state pension at an inadequate level when the Chancellor of the Exchequer does nothing but boast about all the money he has?

Somebody kindly gave me a copy of the Conservative party briefing for this Question Time. I see that the hon. Member for Southend, West (Mr. Amess) has opted for suggested question No. 4. To be fair to him, I must say that he added one original observation, about his mother.

Has my right hon. Friend received representations from the mother of the hon. Member for Southend, West (Mr. Amess) or anybody else about the fact that the Conservative party's fraudulent one-year pensions increase offer will be paid for by stealing £2 billion from pensioners every year and by abolishing the winter fuel payment, the free television licence and the Christmas bonus? Were there any representations about the fact that, although the Liberal Democrats called the 75p increase an insult, it was precisely their policy for this year?

My right hon. Friend is right. The Conservatives' commitment to pay pensioners £10 more a week, about which we can read in today's edition of The Daily Telegraph, is a complete fraud. What the report does not say is that they are proposing to remove the £200 winter fuel payment, free television licences for over-75s and, indeed, the Christmas bonus—a payment that the shadow Chancellor previously called a much-appreciated addition for older people.

The Secretary of State likes to be known as the pensioners' champion. Last winter, he oversaw the highest level of excess winter deaths among pensioners for nearly a quarter of a century. Is he content that he has taken sufficient steps between last winter and the one that we are about to enter to prevent tens of thousands more unnecessary winter deaths among pensioners?

As I told the hon. Gentleman last week when he asked the same question, we introduced the winter fuel payment because we recognised that too many pensioners were dying, in many instances because they could not afford to heat and eat adequately. That is why we have increased pensioners' incomes through the minimum income guarantee, which I think the hon. Gentleman is against. He was when I last asked him about it. Perhaps this week Liberal policy is slightly different. The MIG will mean that incomes will increase for the poorest pensioners by nearly £20 a week. In addition, from today every pensioner household will receive a payment of £200 to be used towards winter fuel payments. That is much more than the Liberals ever promised to deliver.

What plans he has to help pensioners who do not qualify for the minimum income guarantee and who are in receipt of modest occupational pensions.[136110]

Madam Speaker—[Interruption.] I beg your pardon, Mr. Speaker. The pension credit will guarantee a minimum income of £100 a week plus an added payment to reward those with savings.

In general, will the single pensioner with minimal capital with a small occupational pension who qualifies for the pension credit be better or worse off than a single pensioner on the basic pension who receives all the passported benefits including housing benefit, council tax benefit and the minimum income guarantee? Does my right hon. Friend agree that to encourage people to take up occupational pension schemes, they must be seen to be better off as a result?

I agree with my hon. Friend. Pensioners will be better off. First, the pension credit, which we are introducing from 2003, will mean for the first time that if people do what successive Governments have asked them to do and save for their retirement, they will receive a cash top-up to reward them for their effort. That is crucial if we are to get more people to save. We must be clear that there is a real incentive to save. I am glad that last week so many insurance companies and the Association of British Insurers welcomed the pension credit. They recognised that it will help people to save.

Does the right hon. Gentleman now regret introducing the element of means-testing into pensions? What will he do about pensioners who are approaching 75 years of age who have been told that they must buy an annuity, possibly costing about £250,000? If they were to die, they would lose that capital sum.

The annuity rules have been in force for some time. As the hon. Lady knows, people can defer taking out an annuity until the age of 75. I believe that the present arrangements are beneficial to the majority of pensioners.

Does my right hon. Friend accept that, according to his pensioner credit document and assuming that every pensioner who is eligible claims the pension credit, in 2003 half of all pensioners will still have an income of £136 a week or less? Does he also accept that his document assumes a national insurance pension increase of £1.50 a week in 2003? Does he agree with me that a re-elected Labour Government will find such an increase unacceptable and will substantially increase it?

As my right hon. Friend knows, the pension credit is to be introduced from 2003, and its effect will build up over the years. We shall have to wait and see what we do about pension increases in 2003. We have announced increases for next year and the year after as we move towards the credit. The principle established by the credit, which was welcomed by one of my Conservative predecessors, the right hon. Member for Sutton Coldfield (Sir N. Fowler), as a reform that should have been introduced some time ago, will make a change, because for the first time ever people who save and make sacrifices during their working lives will be rewarded for doing so.

The Secretary of State claimed on the television yesterday that 2.5 million letters have been sent to pensioners asking them to take up their entitlement to the minimum income guarantee. How many successful new claims for the minimum income guarantee have resulted from his take-up campaign?

I am glad that someone was watching the television programme yesterday, because half way through it occurred to me that there would not be that many viewers on a sunny Sunday afternoon. Clearly, there was at least one. For the sake of completeness, I can tell the House that my mother was also watching.

May I give the Secretary of State the exact figure from a parliamentary answer? Of the more than 500,000 people who Ministers say are eligible but not claiming, 24,746 extra pensioners have received the benefit, which is a 5 per cent. success rate. Does that not show that pensioners do not want to claim the minimum income guarantee? If they do not want to claim that complicated, new, means-tested payment, why on earth should they go cap in hand to claim the pension credit—the new means-tested handout that the Secretary of State has invented? I would be interested to hear from him his estimate not of how many people will theoretically be entitled to the pension credit, but of how many pensioners will claim the new pension credit.

If the hon. Gentleman is right that people do not want to claim the minimum income guarantee, it is curious that 600,000 people have so far responded as a result of the campaign, which is about the number that we have always thought may be eligible. That implies that there is not a reluctance to get in touch to find out. All those people have made the effort—most of them by telephone, and the others have written in. Up till now, the problem with the minimum income guarantee has been the problem that we inherited from the previous Government.

May I explain to the Secretary of State what the figures really show? Of the 600,000 pensioners who phoned the helpline or tore off the slip in the newspaper, only 60,000 made a claim, fewer than half of whom were successful. That means that there have been only 24,000 successful claims.

The Conservatives doubled means-testing during their 18 years in power. I want to return to the minimum income guarantee before dealing with the pension credit. The fact that 600,000 people responded implies that they are sufficiently interested to contact the Benefits Agency to establish whether they have an entitlement. Of those claims, only 60,000 have been processed so far, of which just under half were successful. I repeat: the two main obstacles to success are having too much money in the bank or too much income from an occupational pension. The pension credit will deal with both.

If they want to.

Well, the hon. Gentleman knows full well that if those people saved only a modest amount, he would not help them at all because he does not accept the need for a credit to reward saving. Interestingly, independent observers—of course, the right hon. Member for Sutton Coldfield is not entirely independent, but he has some experience in this context, unlike the hon. Gentleman—have welcomed the pension credit almost universally as a way to help people to save. That reform, which is the most radical change to the social security system made during the past 50 years, is long overdue. Far from being complicated, it is quite simple. At the moment, people are penalised for their thrift, but in future it will always pay to save. That is something that the Tories can never say.

It is a good job that the hon. Member for Havant (Mr. Willetts) is not counting the votes in Florida—otherwise, we might not have a result before the next presidential election.

Yes, we do. I announced last week that we shall get rid of that ridiculous tariff income, although the hon. Member for Havant apparently wants to keep it. It is ridiculous to assume that pensioners or anyone else can get a 20 per cent. return on their savings. That is not possible anywhere, so far as I am aware. That is why we will scrap the arrangement.

:If he will make a statement on winter fuel payments. [136111]

Winter fuel payments have been increased to £200 this week. Payments will be issued from today.

Is not the real fraud that is being perpetrated on pensioners today the fact that a Social Security Minister promised in July that all payments for past winters would be cleared by the end of September? However, nearly 1 million pensioners are still waiting for their winter fuel payments from previous winters. Would not it be far better to consolidate winter fuel payments in the basic pension and to give a benefit, no questions asked, to all pensioners, which they would receive when they needed it, not when the Government decide that they should get it?

I note that the hon. Gentleman has the brass neck to refer to the subject of Question 5. He sheds crocodile tears about the winter fuel payment and his comments are unconvincing because the Tories are committed to getting rid of it. He is concerned about men between the ages of 60 and 65 who have not yet received their winter fuel payment, but the total is only 3 per cent. and claims are still being processed. He must tell those men that under the Tories they would not get any help whatever because they would lose £200 per household. His concern has no credibility.

Two days after Christmas 1996, I took a group of Labour Members to No. 10 Downing street to urge—to plead—for some help to be given with heating costs because of the freezing weather. No action was taken.

My hon. Friend is right. The cold weather payments scheme meant that it had to be cold for a long period, and that happens less than people might think, even in parts of the country where it appears to be cold all the time. The difference is that under our scheme every pensioner household receives a £200 winter fuel payment. The payments are being made between today and Christmas, which means that pensioners will have the money when the weather is starting to get cold, and will not have to worry about turning up the heating this winter.

We will put it on the basic pension.

The House of Commons Library looked at the hon. Gentleman's figures, and said that the best he could claim was that pensioners would be 42p a week better off. I am more than happy to stand by what we are doing, in contrast to what the Tories are promising to take away from pensioners.

Why are women who reached the age of 60 last month unable to receive the winter fuel allowance this winter?

Because, as with many other provisions, there has to be a qualifying date. Otherwise, it would not be possible to ensure that all the payments were made. There has always been a qualifying date; nothing has changed this year.

Can the Secretary of State confirm that the new £200 winter fuel payment will be payable to men aged 60 to 64? Is he aware of the importance of his assurance to constituents of mine such as Mr. Hutchings, who has rightly campaigned for prompt payment of the benefit to those in his age group? There is no doubt that men aged 60 to 64 would lose out following the implementation of Tory plans to axe the benefit and replace it with absolutely nothing.

My hon. Friend is right. We have received more than 1 million claims from men aged between 60 and 65; 990,000 have been met, while about 3 per cent. have yet to be processed but will be met shortly.

What contribution he made concerning age discrimination in his capacity as Minister with responsibility for older people to the framing of the European Union directive on discrimination in employment. [136112]

We have worked closely with colleagues in the Department for Education and Employment throughout negotiations on the EU directive to ensure that the final text provides a clear and workable foundation on which all member states can base their legislation.

Can the Minister confirm that the Government backed a six-year delay in implementation of the age discrimination aspects of the directive? Does he agree that it is very much a case of cold comfort for 50-year-olds who face discrimination now to be told that they must wait until they are 56? Will the Minister and his colleagues take steps towards legislating to implement the measures that are necessary to protect people from age discrimination now, rather than waiting for another six years?

I understand why the hon. Gentleman has raised the issue, but I remind him that the European directive is not just about age discrimination. In any event, measures could not be introduced overnight.

Does the Minister accept that one group suffers a triple discrimination—namely, older people who are disabled and on social security? In the context of the new European initiatives, will he look at speeding things up to try and ensure that there is no inbuilt discrimination within the system, as referred to in last week's statement? That would enable any changes in policy to be introduced quickly instead of waiting for the European directive.

I entirely agree with the right hon. Gentleman. First, six years is allowed to do everything in the directive, but much can be done in less than six years. Secondly, regarding age discrimination in employment, as opposed to other aspects that I have talked about, we have introduced a voluntary code of practice. We want that to work and will meet employers tomorrow and listen to the issues that they want to raise. We have already said that if the code does not work, we shall take other measures, as we are not going to let the idea wither. We are attempting a voluntary approach to start with, but if that fails, we shall look at other approaches.

In anticipation of the possible—indeed, likely—passage of the directive, what review has the Department undertaken of its own employment practices?

Tied in with the directive is the publication of "Winning the Generation Game" by the performance and innovation unit, which relates to older people right across the board. Departments must certainly look at ensuring that they set an example. It is no good Ministers telling industry to do certain things if we do not take action in our own Departments. My Department is taking a lead in allowing people to work beyond 60, and I want that to be extended across Government. Some Departments have yet to resolve certain issues—such as the Home Office, which must deal with a cut-off point that applies to some members of the prison service but not others.

What recent assessment he has made of the amount of money fraudulently obtained from the benefits system since 1997; and if he will make a statement. [136113]

If he will make a statement on the amount of benefit fraud since May 1997. [136122]

The estimated loss due to fraud is £2 billion per year. That figure refers to the fraud we know about. We have now increased the targets for reducing the amount of fraud and error in the system. We are aiming to reduce the losses from fraud and error in income support and jobseeker's allowance—the two most vulnerable benefits—by 25 per cent. by March 2004, and by 50 per cent. by March 2006.

Despite all the rhetoric, according to a study by the Department, which was revealed in The Sunday Times in May, the cost of fraud in benefit may be as high as £7 billion—although, according to the Public Accounts Committee, it is £4 billion. Will the Minister confirm that, under the Labour Government, successful prosecutions for housing benefit fraud have halved since May 1997? Will he also confirm that, according to figures that he released to the right hon. Member for Birkenhead (Mr. Field), there are about 20 million more insurance numbers than there are people in this country?

May I deal with the last point first, as it is part of a myth? There are indeed more national insurance numbers on the system than people in this country, and a good example will suffice for hon. Members to understand why that is so. To pay a widow's pension based on her husband's contributions, we need to maintain the national insurance number for the deceased. We must also maintain numbers for people who leave the country, because we do not know whether they will come back. There is an extensive programme for managing the national insurance number system because, clearly, there can be problems with it. However, the system is not operated willy-nilly and it is not right to say that, because there are more numbers than people in the country, 20 million of them are open to fraud.

How many initiatives does the Minister think his Department has launched to cut fraud since the Government came to power in 1997?

I would not dream of counting them. The main one is to get a strategy for dealing with fraud—that is, to get the benefit right, paid to the right person and maintained properly in the system. If we do not do that, it gets out of control. Therefore, we have taken that strategic step.

Is it not a generalised truth that rumour, hearsay and sometimes malice exaggerate the amount of fraud?

The answer is yes, but we must accept that we pay in benefits a total of £2 billion a week—dozens of benefits to millions of people. For example, we issue 1 million order books a week. Our system is under attack by organised crime—organised criminals. I am not on about someone who is working and claiming, although I am not condoning that. I am on about organised crime.

Protection against fraud is extremely important—the Minister is right to point that out—but so too is common humanity. I have in my hand a letter to one of my constituents who was declared dead while living in a homeless persons hostel. His income support was stopped, his housing benefit was stopped and his community care resettlement grant was stopped. He was not dead, however. As a result of an anti-fraud protection measure, he now finds himself living in a council flat in my constituency without the benefit of his community care resettlement grant of only £285; and it cannot be reissued to him for a further six weeks.

Clearly, a gross error has occurred. I hope that my hon. Friend is not going to wait to contact Newcastle, but will give me the information immediately after Question Time.

The Minister of State has just said, to use his exact words, that he is concerned about stopping people "on the fiddle" in relation to benefits. He has also talked about the need to tackle organised crime, and for co-operation between various Departments and agencies. Can he therefore explain the extraordinary guidelines given to the Department's staff telling them not to supply information to police in cases involving car theft, muggings or burglary? Does he realise that the Department's guidelines suggest that those are minor crimes and that it is more important to protect customer records? Is he surprised, therefore, that Mr. Glen Smyth of the Police Federation has described the new guidelines as a "criminals' charter"?

They are not new guidelines—they are exactly the same as those issued by the previous Government. Nothing has changed whatsoever, except that the Police Federation has an axe to grind. I do not know what number initiative we are on now—

It is 43.

Then let us have 44 initiatives. We are taking the issue so seriously that senior staff in my Department are being joined by the former head of investigations at Customs and Excise and by the former deputy director of MI5.

Are not some of the worst examples of benefit fraud committed by predatory private landlords who exploit some of the most vulnerable and poorest members of our society and milk the benefits system for all it is worth? What action is my right hon. Friend taking to improve the benefit system, so that not only is better housing provided, but fraud by those latter-day Rachman landlords is cut?

We have—at the risk of adding to the number of initiatives—a verification framework to ensure that those who are claiming housing benefit are who they claim to be; that they have legitimate reasons for giving the address that they give; and that there is no collusion with landlords to fiddle the rent amount. We have also provided local authorities with remote access terminals so that they can cross-check with the Benefits Agency on the matters that have to be checked. We have also set up the Royal Mail "do not redirect" service, as a way of stopping giro drops. Although I know even from my own constituency that there have been complaints about how those measures have slowed down claims, they are a way of cutting fraud.

If he will estimate the amount which a person retiring would need to have invested in a pension fund in order to be better off than a person retiring on the basic state pension. [136114]

Building on the basic state pension, people can contribute to the state second pension, or to an occupational, stakeholder or personal pension. Under the pension credit, no matter how much people save, they will be better off.

I note that the Secretary of State avoided answering the question and was not prepared to say how much someone needs to have in a pension fund to be better off. The accurate answer—as he will know if he has read the excellent briefing note prepared by the Conservative research department—is about £100,000. If he doubts that figure, he could provide his own.

I had of course looked at the Conservative party briefing, and the hon. Gentleman's question was all too predictable.

What is the right hon. Gentleman's figure?

I remind the hon. Gentleman what he asked: how much someone would have to save to be better off than someone retiring on the basic state pension. Everyone in this country who contributes gets the basic state pension. The point that I was making is that, under the system we have introduced, if someone saves a pound more than that, they will receive a credit for having done so.

Does my right hon. Friend share my amazement that the only thing the Tory Front-Bench spokesmen could say last week about the proposals to reward pensioners who save—whether in a pension fund or otherwise—was that the proposals would put strain on the tax system? What about the strain on pensioners for all these years? Will he confirm that when the pension credit is introduced, a pensioner on the basic state pension who has saved and has an income of about £20 a week from those savings is likely to receive an extra credit of £12 a week as a reward for saving?

I do not know whether we should be amazed or not, but as far as I am aware, the Conservative party is the only organisation that is against the principle that someone who saves ought to be rewarded and not punished for it. The Conservatives have made that abundantly clear—not just today, but in their helpful briefing, which I am more than happy to circulate among my hon. Friends so that they can better see exactly what they are up against. The briefing makes it abundantly clear that the Conservatives are opposed to a credit which will mean that people with an income of under £135 will be better off if they save. Surely it must be right that the social security system rewards thrift and does not punish it.

Will the right hon. Gentleman consider future pensioners? Is he aware that last week's pre-Budget statement will lead to a shortage of gilts in the market and hence a bad deal for people with defined contribution pension schemes? Is he aware that the delay on the Myners report until after the election, because it is too difficult, is a bad deal for people with occupational pension schemes? Is he further aware that the increase in the minimum income guarantee means that a man aged 45 will now have to save £50 to £55 a month in a stakeholder pension to do better than the minimum income guarantee? Does he agree that the Government have created a hat-trick of disincentives for future pensioners to save?

I am beginning to wonder whether Conservative party spokesmen have actually read the consultation paper on the credit, because the principle is clear—for every pound someone saves, they will get a cash reward. Under the system that the Tories want, people will be punished for saving. Under the present system, people who have too much money in the bank or who get a small occupational pension lose out. Under our proposals, 5.5 million pensioners will gain as a result of the credit. If those people vote Conservative, they will lose out.

What measures he is taking to help pensioners on low incomes. [136115]

We plan significantly to increase the minimum income guarantee to £92.15 next year, rising to £100 the year after. In addition, the new pension credit will benefit 5.5 million pensioners on low and moderate earnings.

Is my right hon. Friend aware that 3,000 pensioners in my constituency will enjoy a substantial boost to their incomes when the minimum income guarantee is increased in April next year? Does he agree that it is right and proper that we focus our attention first on those pensioners who need help most? Does he further agree that if we are not to return to the pensioner poverty that we inherited from the previous Government, we need to review the minimum income guarantee in future years?

My hon. Friend is right. Two structural reforms were necessary to the present pension system. One was to make sure that we got rid of pensioner poverty once and for all. The only way the pensioner poverty that grew up over the past 20 years can be eradicated—is to give far more than a prices—or indeed an earnings—link to the poorest pensioners, and we are doing that by some £20 a week

Is my right hon. Friend aware that over the three years since 1997 the poorest pensioners have received an additional £24.35 a week—or will do eventually—compared with a starting point of £67.80, a sum accumulated over the entire history of pensions provision, including the 18 miserable years of the previous Government?

As I said earlier, during the course of this Parliament we will have done more for Britain's pensioners in five years than the Conservatives did in the 18 years they were in power. That is why I suspect that, when it comes to the election, the British people will look at what the Tories are planning. They want to take away the winter fuel payment of £200, the free television licences and the Christmas bonus, which are benefit-free and tax-free, and then try and con people into believing that they will be better off if those payments are given back to them. The fact is that some 2.5 million people will lose out from those measures; and when they look at the longer-term plans they will find it odd that the Conservative party is the only organisation in the country that wants to keep a rotten system under which people who saved were punished for it. We want to ensure that 5.5 million people who have saved for their retirement are rewarded for their thrift.

Does the Secretary of State agree with Baroness Castle that Conservative pension plans which consolidate Labour's pension gimmicks and give the money back as a decent rise on the basic state pension are "an absolute vote winner"?

As I have told the hon. Member for Havant (Mr. Willetts), when Conservatives pray in aid Lady Castle they are desperate indeed. The British people know that the Government have done more for pensioners in the past four years than the Conservative party did in the 18 years before that. I do not think that Lady Castle or anyone else is likely to support a party that is pledged to taking £200 off every pensioner household as well as taking away the free television licence for the over-75s and the Christmas bonus. People are in no doubt that if they vote for the Conservative party, in the long term they will lose out and be worse off.

If he will make a statement on the resources available to the social fund.[136116].

This year the discretionary social fund budget is based on £138 million of new money being paid into the fund. This, together with expected loan repayments of £458 million, provides a gross discretionary budget of £596 million.

I am grateful to my hon. Friend for that reply. As she will be aware, it is the discretionary social fund to which poor people in desperate circumstances turn to buy a bed, some furniture, a cooker or other household essentials. What would be the effect on those people of a £90 million reduction in the funds available to the social fund, which I understand to be Conservative party policy?

My hon. Friend is right to point out that this £90 million raid would decimate the fund. It would wipe out the entire grants budget, if that is where it was taken from, and hit the most vulnerable the hardest. In other words, it is a typical Tory policy.

What steps he is taking to improve provision for carers. [136118]

We recently announced a broad package of measures to improve financial support for carers. We intend to increase the carer premium in the income-related benefits by £10 on top of inflation, to increase the earnings limit in invalid care allowance from the current £50 to the lower earnings limit—currently £67—to allow ICA to continue for up to eight weeks after the death of the person being cared for, and to allow claims for ICA to be made by people aged 65 and over. We will be seeking to introduce these changes as soon as the legislative timetable permits.

I am grateful to my hon. Friend for that reply. Carers in my constituency will certainly be pleased that their valuable work is being recognised at last, but will he assure me and the House that carers will benefit from the increase in the carer premium and that it will not be clawed back in reduced housing benefit or council tax benefit?

I can give my hon. Friend that assurance. I, too, have heard carers welcome the changes. They were warmly welcomed at the annual general meeting of the Carers National Association. The chief executive of the association assured me that it gave him "great pleasure" to welcome the announcement last week, which would boost carers benefits. The measures provide a sensible balance between targeting support on those most in need and giving those who are able to work the opportunity to continue to do so. The changes will benefit 300,000 carers at a cost of about £500 million over three years.