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Social Security (Contributions) (Amendment No. 2) Regulations 2009

I seem to have drawn the short straw among my colleagues for participating in this annual ritual to approve these two social security orders. In preparation, I had the pleasure of reading the Government Actuary’s report for the first time. It is an impressive document, if largely incomprehensible to an amateur in the field such as me. As we have heard, the good news is that the balance in the National Insurance Fund is in surplus, is well over the recommended one-sixth of annual benefit expenditure, and will therefore need no Treasury grant this year. However, are the assumptions made about unemployment and benefit payments on track, or does the Minister think that they are far too optimistic? The Government in general seem to be surprised at the speed at which the country has hurtled into deep recession. I see that the Actuary has used the same assumptions of employment and unemployment levels as the Treasury did in the Pre-Budget Report on 24 November last year, and that worries me. After all, the Chancellor predicted growth in the second half of this year, but this has now been revised downwards. It was also predicted that the economy would contract by between 0.75 per cent and 1.25 per cent, but this was also wildly optimistic; I use the same phrase as the noble Lord, Lord Howard of Rising. What are we to make of the assumptions in the report now? Perhaps the Minister would enlighten us. The actual upratings are, of course, welcome. But no one should think that the benefit system is generous, as many people are now finding out who may have paid contributions for many years and who may now feel cheated that the jobseeker’s allowance is so low. There are several groups about whom we should be greatly concerned. The first is pensioners who do not take up their entitlement not just to pension credit, but also to housing benefit and council tax benefit. This group has grown in the past 10 years, according to the Rowntree report Monitoring Poverty and Social Exclusion. In fact, pensioners are being hit from all directions at the moment, because those with modest savings are finding that their income has plummeted due to very low interest rates. The Government should redouble their efforts to make sure that pensioners who need it at least receive pension credit rather than go hungry and cold, which is almost certainly happening at the moment. The second group is working-age adults in low-income working families. This group is set to rise, with only low-income jobs available in many areas. The third group concerns the number of children in working families needing tax credits to avoid low income. The Rowntree report states that this increasing need for tax credits is the key to why the Government have missed their child poverty targets. Another alarming statistic is that the proportion of all low-income households paying full council tax has risen by a third over the past 10 years to 60 per cent; so much for the popular view that the country is full of benefit scroungers. In parenthesis, it is worth noting that the authors of the Rowntree report say that, as far as child poverty is concerned, the much-repeated mantra of work being the best route out of poverty is not necessarily the case. It states: "““Rather, there needs to be an understanding of the problems that work can cause as well as the benefits that it provides””." Amen to that, I say. It is perhaps unfair for me to ask the Minister a couple of questions, as he is not the Minister who deals with social security benefits. However, I shall not be deterred. No debate about benefits should fail to ask where the benefit simplification project now stands. There is no doubt that many millions of pounds in benefits are not being claimed because of confusion about entitlements and complex application processes. Finally, there is worrying evidence that some new benefit claimants, such as lone parents looking for work, are having difficulty in accessing crisis loans from the Social Fund, such is the burden on Jobcentre Plus offices at the moment. Is the Minister confident that enough trained staff are in place at these vital offices who understand the system that they are trying to administer?