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Last Updated: Sunday, 5 December, 2004, 12:13 GMT
Interview with Alan Johnson, MP
Please note BBC Politics Show must be credited if any part of this transcript is used.

NB:This transcript was typed from a recording and not copied from an original script.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy.


On Politics Show on Sunday, 05 December, 2004, Jeremy Vine interviewed Alan Johnson, MP, the Work and Pensions Secretary.

Alan Johnson, MP
Alan Johnson, MP: work and pensions in the limelight?

Jeremy Vine: I'm joined now by the cabinet minister responsible, Work & Pensions Secretary, Alan Johnson, welcome, thanks for coming in.

So, 2.7 million people on incapacity benefit, how so many?

Alan Johnson: Well there were 2.6 million when we came in to government in '97. What happened between '79 and '97, is the numbers trebled from seven hundred thousand to 2.6 million.

Now there was a fair deal of suspicion there that it was a policy to move people off of unemployment benefit and on to IB, and therefore to make the unemployment figures look better.

Actually, they didn't, unemployment still gone up to three million. So, Roger Berry was quite right there to point out we've at - the numbers coming on to IB have gone down by a third. If we'd have continued that same trend through the '80s and '90s there would be over four million on benefits now.

On incapacity benefit, rather than 2.7 million. But the majority of those came on during the '80s and early '90s.

Jeremy Vine: Okay, but if we look at the 2.7 million, how many of those do you think are capable of work?

Alan Johnson: Well, this is a contributory benefit and they have to go through something called the personal capability assessment, which is the toughest gateway to the benefit in the world. The OECD said it was it was amongst the three toughest in the world.

So this is not a question of saying there's any fraud going on here, indeed the very extensive work that was done on this a few years ago found that the level of fraud is tiny. So these are people who do have problems, do have problems either mental problems or physical problems. The question is how can we help them to actually get back in to work, to reconnect with society - those who can.

Those who can't, they need security and they need peace of mind, and we'll offer that. It's giving a hand to those who really do want to come back to work, that haven't had an opportunity to do it before.

Jeremy Vine: But there's a suspicion, isn't there, that people who are, who maybe haven't got access to a job because they're in a high unemployment area, are going to their GP and saying look, please get me the extra money, please sign me off sick.

And we were talking just a couple of weeks ago to Dr Hefin Jones, who was speaking about signing people off sick in Merthr Tydfil, this is what he said, 'the overall structure was to apply the all work test that we should designate people as being fit to work or not fit to work, but you know nothing in life is that black and white. It's very difficult, and on the sub conscious level, you get influenced by the fact that you know what the work situation you know - what the type of work is in this area.

And as a doctor anyway, you do get involved with people on a personal level, and if you feel it's bad for their health, no matter what the ministry of pensions rules say, there is a tendency to sort go on the patients side'.

Jeremy Vine: So the GPs aren't helping here.

Alan Johnson: Well, I spoke to the BMA a couple of weeks ago. There is a kind of sick note culture getting in to this kind of incapacity benefit route. Starts off with a sick note, but you can't stay on it and gain the full amount of the incapacity benefit without going through the PCA that I mentioned earlier. But never the less there is an argument here.

We've got very low levels of unemployment, we've got the highest employment level of any G7 country, and there's six hundred thousand, seven hundred thousand vacancies out there, so this is the best opportunity we'll have to assist people to get back to work. Now I think the important thing about GPs is that we didn't involve the health service in this before.

And involving the health service as part of the kind of condition management of people who would like to get back to work - nine out of ten people who come on to incapacity benefit say they want to get back to work, and so helping them to do that involves not just Job Centre Plus staff, DWP staff, but also an NHS involvement to manage their condition.

Jeremy Vine: Yes, but a cynic would say well it has suited you up to this point to keep them on IB because that makes it look as if there is no, virtually no unemployment.

Now that we have a situation where we've got job vacancies and no one to fill them, you're suddenly saying, well hang on, let's change the test, let's sort this out and bring them off IB and in to the jobs market.

Alan Johnson: Well, a cynic might say that but it's wrong. I think it is the case that we concentrated from '97 onwards on long term unemployed, long term youth unemployment, loan parents, you know, there was a real drive here to reduce the massive amounts of unemployment.

That's been very successful and so in that sense, yes we do need to turn attention now, with the kind of economy we're in, with six hundred thousand vacancies out there.

But this is not about us saving money, this is about us genuinely giving assistance, as all the disability lobby will tell you. What happened before is people were told, you are now an incapacity benefit recipient, you are a passive recipient of benefits. Go away and you know, we don't expect to see you again.

Now, the emphasis is on, how can we help you, how can we help you to become socially included, how can we help you back in to work, given that nine out of ten IB recipients want to get back in to work.

Jeremy Vine: Let me ask you about another area in your huge department, which is pensions. Everyone is waiting for the final results of this Adair Turner report, into pensions, where it's rumoured that he will conclude that people need to be forced to save for their pensions. Now, is that something you've got sympathy with?

Alan Johnson: Well we asked the Pension's Commission specifically to look at that point, so I'll wait for their recommendations.

My own view, which I've said before, is that we could be doing more down the voluntary route. In terms of the labour market at the moment we've got 4.6 million workers out there, who work for companies who make a contribution to a pension scheme, but who don't choose to join that pension scheme. 4.6 million ...

Jeremy Vine: Well, they've volunteered not to do it haven't they, that's the point.

Alan Johnson: Well, that would be fine if they were taking a rational judgement in possession of all the fact. The evidence suggests that it's either inertia or it's confusion, or they just haven't got around to it.

So one idea is that people are automatically in a - if they've given up by the way, I mean you know, so they're automatically part of a pension scheme until they opt out, whereas the current situation is you opt out, you're out of the pension scheme until you opt in. So you know, there's more to be done there.

There's more on informed choice of people actually understanding this horrendously complex area, which you know, we need to tackle the complexity if we can. Who don't really know what the situation is with their pension.

Jeremy Vine: But it's not that complex for people to understand they don't have enough money when they're sixty is it and the government has said that and said that and said it and still, they don't sort it out.

Alan Johnson: Well, no, I think what the Pensions Commission have said is we lived in fools' paradise up until quite recently and now people are understanding. I mean the big question now, and it's for all western democracies, for all countries probably, is the birth rate is declining and longevity is increasing. It's a good news story; people are living longer.

But we have to tackle that, and you say, Jeremy, that people, it's simple, they just know they're not saving, well actually that's not the case. If people had more information we believe, then if they take a decision not to put money in to savings accounts or in to pension schemes, it's their decision. But we don't think they have enough information to make that informed choice.

Jeremy Vine: All right. But what if you come to a point where you say we've told them everything, they are still not doing it. Is forcing them to save, a bolt in your locker?

Alan Johnson: Well, it's obviously why we've asked the Pensions Commission to look at this. There are arguments for and against. We've asked the Pensions Commission first of all to do a proper analysis of the problem, and they've done that very successfully. And secondly, to move on to recommendations which will come next year. So, I think it would be a little foolish of me to pre-empt that, but I do think we don't stand still waiting for it.

Jeremy Vine: (overlaps) ... feel free, we've got an election coming.

Alan Johnson: (overlaps) But we don't, we don't stand still waiting for the second report. We just put a pensions, it's now a Pensions Act, where we encourage people, if you want to stay in work for longer, you want to take your pension at sixty five, fine.

If you want to stay in work till seventy, you can get between twenty five and thirty thousand pounds lump sum for doing that. We've got the Pension Protection Fund which avoids pension schemes going bust when the company becomes insolvent, so there's - and we've got the informed choice agenda. So all of that needs to be taken forward, while we wait for Adair Turner's final report.

Jeremy Vine: At the other end, on the State Pension, you've tried as hard as you can to get state money to the poorest pensioners. Means testing, really is not working is it?

Alan Johnson: We tried and succeeded and it does work.

Jeremy Vine: A third of those eligible aren't taking it up.

Alan Johnson: Now but this is a bizarre argument. When we came in to government we had 2.7 million pensioners living in abject poverty. I'm talking about sixty eight pounds a week, with income support. Now what were we going to do for those pensioners.

Say to them, they'll have to you know, go and see an actuary, or they'll have to - if we give them extra targeted money, it might influence someone's savings in the future. We had to get money to them. And we've done it, we've done that to the extent.

Jeremy Vine: Not very well.

Alan Johnson: We've done - I'm sorry, very well Jeremy, I mean the average increase for the poorest pensioners is forty two pounds a week.

Jeremy Vine: But so many don't ...

BOTH TOGETHER

Jeremy Vine: .. want to fill out the forms, and why should they?

Alan Johnson: Well, we're up to 70%. Pension credit started just a year ago in October. We're up to 70% coverage. And we need to do more on that. But all of our evidence is actually the poorest pensioners, the ones we're talking about - women mainly, in their mid 80s, didn't have enough National Insurance contributions even to get the full State Pension, that we are getting the money to them.

Jeremy Vine: And it stops people from saving as well doesn't it.

BOTH TOGETHER

Alan Johnson: Well this is another bizarre part of the argument. I mean the pension credit, for the first time, allows people who have got some savings or another small pension coming in, not to have pound for pound withdrawal, which was the old system.

I mean what we're doing with pension credit is actually rewarding their thrift for saving, and so there's an extra savings credit element, that goes on top of that. But this really has been enormously successful. We could have put that money, as a populist government, you just mentioned, coming up to the General Election; we could have said, we're going to put all of that five billion pounds on to the State Pension, and everyone would have got eleven pounds a week more.

The poorest pensioners would have been thirty pounds a week worse off. They don't have a voice in general in this debate. But I think if you talked to them, talked to them in my constituency, they've just had two hundred or three hundred pounds tax free coming through the post this week for winter fuel allowance.

They've got their pension credit running on average, forty two pounds a week, with a thousand pounds arrears. It really is having startling results with the poorest pensioners and the average increase for pensioners has gone up above the rate of earnings.

Jeremy Vine: All right. And just before you go, I want to just ask you about the Home Secretary. More column inches on David Blunkett to-day. Is there not a point at which the turmoil in his life starts to affect his ability to defend this country against al-Qaeda?

Alan Johnson: No is the simple answer to that. I don't want to talk about David's private life. In terms of how it impinges on his duties, there's the Alan Budd inquiry, and we'll wait for that.

I'm sure - I've seen David, up front, close and personal you know, during my three months in the cabinet, and I'm absolutely convinced it's not affecting his work.

He's also, incidentally, one of the most decent, honest people I've ever met. And I think he'll be cleared by the inquiry.


NB:This transcript was typed from a recording and not copied from an original script.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy.


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The next Politics Show will be on Sunday, 12 December, 2004 at 12.30.

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