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Oral Answers To Questions

Volume 403: debated on Monday 14 April 2003

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Work And Pensions

The Secretary of State was asked—



If he will make a statement on the most recent unemployment rate in (a) Tamworth and (b) the UK.[108704]

Since 1997, the claimant unemployment rate in Tamworth has fallen by more than 40 per cent. In February, it stood at 2.9 per cent. That compares with the national rate of 3.1 per cent.

Our policies are providing a stable economic environment that is helping more people to move into work. We are building on this by promoting flexibility with fairness in the labour market, so that it can adapt to changing circumstances and deliver high and sustainable employment for the future.

Would my right hon. Friend like to congratulate organisations such as the Tamworth Programme Centre, which I shall visit on Wednesday? It works with Jobcentre Plus to get people back into employment. Does he agree that active labour market reforms have produced the record high employment that we have today, at a time of world recession? That runs counter to the idea that high unemployment kept the rate of inflation down and was therefore a price worth paying.

I join my hon. Friend in congratulating the centre in his constituency that is working in partnership with Jobcentre Plus. Partnership work such as that has, in Tamworth, cut long-term unemployment by 76 per cent. and long-term youth unemployment by 82 per cent. I am sure that the centre is looking forward to my hon. Friend's visit on Wednesday. Unemployment is never a price worth paying.

Intermediate Labour Markets


What steps he is taking to develop intermediate labour markets. [108705]

Intermediate labour markets work with disadvantaged people and seek to provide a supportive work environment, helping them to develop the skills needed to retain employment. They are widely used in the United Kingdom, and some are funded by new deal providers and local authorities.

The Department is investing £40 million in StepUp, a transitional work programme that will provide guaranteed jobs for up to 5,000 long-term unemployed people.

Does the Minister agree that the importance of intermediate labour markets was stressed by last year's report of the Select Committee on Work and Pensions? Will he give a commitment to mainstream such measures in the future work of his Department?

I have visited a number of intermediate labour market programmes, including the StepUp pilots. I am impressed by the work that they do, and particularly impressed by the enthusiasm that they seem to be able to raise in local communities—including enthusiasm from local public representatives and local providers. I can give my hon. Friend the commitment that he asks for.

Does the Minister accept that intermediate labour markets are welcome because they help into productive work people who are a long way distant from the labour market? At the moment, the funding streams are very flexible and insufficiently co-ordinated. During work on its recent employment report, the Select Committee heard that some providers were struggling as they tried to make sense of 10 different funding streams. Will the Government do something to co-ordinate the funding so that it is more easily available?

The hon. Gentleman chairs the Select Committee and its point was well made. In response, we are trying to find a way—within the Department and, indeed, across Government—of co-ordinating advice that is given to providers of not only intermediate labour market programmes but programmes more generally on which the Government rely. We are also trying to find a way of having an official to co-ordinate things and to work with lead providers to ensure that the range of provision is properly scoped and that providers have full information in front of them. However, the decisions will remain with the providers. An alternative approach, which is touched on in the Select Committee's report, would be to put the funding resources, or most of them, in one place. I think that that would mean that a whole range of programmes that are important to the Government would end up with less support. The right approach is to have better co-ordination, and we have made a start on that in the Department.

I welcome what the Minister has said. There are still parts of the country where long-term unemployment problems are deeply ingrained and where the private sector has yet to penetrate. Intermediate labour markets allow people to gain the confidence to get back into work. In my constituency, there are two very successful programmes—one in Havercroft and the other doing environmental work—but the funding streams are precarious. Will my right hon. Friend therefore encourage his Department to en sure that the funding streams are more robust in future?

Where, largely for historical and geographical reasons, unemployment is high, intermediate labour markets have an important part to play. If my hon. Friend writes to me about the specific funding issues for the two intermediate labour markets that cover his constituency, I shall—without making any specific promise—see what I can do to help.

I am sorry, Mr. Speaker, I was seeking to catch your eye not on this question but on Question 4.

Precisely what assistance is given to people who have difficulty in accessing the employment market because they have no transport of their own, and what assistance is there for people to travel to Jobcentre Plus? There is not even one Jobcentre Plus in the Vale of York.

I understand what the hon. Lady says; indeed, she has raised the issue with me before. The question of how Jobcentre Plus can provide the new and exciting range of services to sparsely populated communities is an important one. A range of initiatives is under way, including subsidised transport arrangements, which will make a difference. Concentration on this issue in the Department, working with the Countryside Agency, is something that I take very seriously indeed—partly because of my former responsibilities. I acknowledge that, due to the rural nature of the hon. Lady's constituency, it is impossible to provide a Jobcentre Plus office physically within the boundaries of the Vale of York, so if there is an initiative that she thinks will help her constituency, I am more than willing to respond constructively to any specific representations she may wish to make.

Child Support Agency


If he will make a statement on the speed with which assessments are made by the Child Support Agency. [108706]

If he will make a statement on the Child Support Agency reforms. [108717]

In 2001–02, about half the cases took less than 20 weeks to reach full assessment, but one in six took more than a year.

As the House is aware, the new scheme started on 3 March, and early indications are that both clients and staff are responding positively. By the end of the first year of operation of the new scheme, I expect the CSA to have arrangements for maintenance payment in place, on average, within six weeks from the first contact with the non-resident parent.

I thank the Secretary of State especially for that target. Is he aware that when his hon. Friend the Member for Normanton (Mr. O'Brien), whom I am delighted to see in the Chamber, asked him when he last met the chief executive of the CSA

"to discuss progress on county court judgments, committal proceedings and the withdrawal of driving licences for nonpayment of maintenance",
the Under-Secretary of State for Work and Pensions, the hon. Member for Croydon, North (Malcolm Wicks), replied:
"Ministers have regular meetings with the Chief Executive."—[Official Report, 30 January 2003; Vol. 398, c. 996W.]
Technically, that could be described as a non-answer. Can the Secretary of State give some targets for the difficult cases where non-resident parents disappear, refuse to provide information and generally play havoc with the system?

We are in the process of setting demanding targets for the future operation of the CSA. The House will be aware that cash compliance is already up to 68 per cent. and that case compliance is up to 71 per cent. In the new system, we are setting targets of 78 per cent. for case compliance and of 75 per cent. for cash compliance. In place of the chaos and the huge backlogs that built up when the first scheme started, we have been making progress, and we are more ambitious for the future.

Figures from the Library indicate that the delay in introducing reforms to the CSA will cost lone parents about £90 million. What plans do the Government have to compensate lone parents for those losses?

Compensation would not be payable for the delay in introducing the new system, as the hon. Gentleman knows. It would have served lone parents and other recipients of maintenance badly if we had introduced the system when the IT was not ready. That would have risked repeating the chaos that occurred when the CSA first came into operation. It is good that we have got things right and that we set up the system only when the IT was capable of delivering an effective service. As much as anyone in the House, I look forward to the recipients of benefit also receiving, under the reforms that we have introduced, the child maintenance premium of up to £10 a week, which they have not received previously.

I thank my right hon. Friend for his efforts to make the CSA more transparent, more fair and more accessible to people in need of child support. In addition to speeding up the claims, will he take into consideration the accuracy of the claims and reducing the amount of paperwork that parents with care and even absent parents receive from the CSA, as it is difficult to understand and follow? In making the issue transparent, will he take action to ensure that the assessments are clear and correct, and to try to reduce the amount of paperwork involved in making assessments?

Very much so, and I pay tribute to the long-standing and informed interest that my hon. Friend has taken in improving the CSA's performance. The new system is very much simpler; it cuts dramatically the amount of information that has to be collected and the number of calculations that have to be made. That should build confidence in its provisions among not only parents with care but non-resident parents as well. It is an opportunity to start a new era of much more effective child support and its payment, which is the critical thing.

I appreciate the opportunity to press the Minister and to welcome the improvements, but how long will it take to deal with the backlog of parents who have been wrongly assessed, as they have been told that that will not happen for some time until new applicants have been dealt with?

The introduction of the new system for new cases should make it much more straightforward and easier to get such things right first time. As the hon. Gentleman suggests, one of the great disadvantages of the old system was that it was so complicated, because of all the factors that had to be taken into account, that barely had the initial assessment been made before new information became available and the assessment had to be adjusted—in many cases to the point where neither the parent with care nor the non-resident parent ever really knew where they stood. That accounts for the extent to which the backlog has built up, and of course we will do everything that we can further to clear it.

Is the Secretary of State aware that, of the 384,000 parents with care entitled to receive child maintenance, 193,000 receive less than their entitlement and 79,000 receive nothing at all—that is £250 million in unpaid child support? May I suggest to the Secretary of State that he enable every Member to suggest three child support cases in his or her constituency in which the sanction that the Secretary of State has to remove driving licences could be applied to those non-resident parents who deliberately and consistently evade their responsibilities, many of whom enjoy much higher standards of living than the parents to whom the money should go?

First, I acknowledge the close interest that the hon. Gentleman takes in such things and his contribution to the Select Committee on Work and Pensions. It is perhaps unfortunate that we cannot allow a universal system to be dictated by whoever is top of an MP's list for action. We can use the sanctions that we have at our disposal, but the threat of those sanctions is more important. At the end of the day, what is important is not taking driving licences off people, but how many people pay because they fear that their driving licences would have been taken away. As I said, we have been improving both cash and case compliance, and our targets for the future are more ambitious, as I told the hon. Member for Isle of Wight (Mr. Turner). I will certainly do all that I can to ensure that sanctions are used where appropriate.

Pension Credit


What the estimated impact has been on savings of the introduction of the pension credit. [108707]

When introduced in October, pension credit will for the first time reward, not penalise, savings, ensuring that those who have worked hard to save modest amounts will gain from having done so. The reward for saving will be up to £14.79 a week for single pensioners and up to £19.20 a week for couples. That is, of course, in addition to the guaranteed minimum income.

That is all very well—[Interruption]—but does the Minister not realise that he is creating a massive means-tested scheme for the elderly, specifically against his party's promise in 1997 and the wishes of the Chancellor? He has also created a massive disincentive to save—those are not my words, but those of the president of the Faculty of Actuaries—and a hugely expensive bureaucracy. Does he not realise on reflection that there is a much less expensive and more effective way to help poorer pensioners?

With all due respect, I do not think that the hon. Gentleman has understood the scheme. Let us contrast it with what we inherited: pensioners with modest savings had them deducted, pound for pound, from income support, giving out entirely the wrong messages to those who had properly saved. The purpose of the pension credit is to recognise those modest savings and reward them accordingly. Given his interest in savings, I should have thought that he would have welcomed the pension credit.

As the Minister suggests that we recall the position that Labour inherited when it came to power, does he accept that since 1997 three quarters of all company pension schemes have either closed to new members or closed contributions to existing members, and that 11 per cent. of those schemes are now in the process of winding up? If we do not want all our constituents to end up on the pension credit, does not it behove the Government, once they have considered the response to their Green Paper, to introduce some very radical pension reform proposals?

As the right hon. Gentleman acknowledges, we have published our ideas in a Green Paper, on which we are consulting. I was at a consultancy meeting in the south-east of England this morning, at which we heard from a range of partners and stakeholders. We will introduce our proposals in due course. He is right that there is much insecurity out there, and we need to reassure people that when they save it is worth their while doing so. That is the purpose of the Green Paper and, at the risk of being relevant, it is the purpose of the pension credit.

Does the Minister accept, none the less, that, according to Institute for Fiscal Studies figures, by October three fifths of all pensioners will be eligible for means-tested benefits, and by the middle of the century, with no change in policy, four fifths of pensioners will be so eligible? Does he accept that there is a connection with the halving of the savings ratio since the Government took office, and the fact that almost half of the youngest element of the work force now has no second pension provision?

As the hon. Gentleman is a good territorial, 1 knew that his time would come.

Again, the hon. Gentleman is not giving fair acknowledgement to the fact that, with the pension credit, we are at long last trying to reward savings, which is an important element. There is a debate about means testing, but the pension credit involves a very simple incomes test, which ignores, for example, any income from savings below £6,000. That means that 85 per cent. of pensioners receiving the credit will have any income received from their savings ignored entirely. Furthermore, unless they have major changes in life circumstances, once people are receiving the credit they will not have to have their income assessed again for a period of five years. That means that, on average, those getting the pension credit will receive some £400 a year. I am particularly struck by the fact that some of the poorest pensioners, women, will benefit disproportionately, which is right and proper given their circumstances. In fact, 54 per cent. of those entitled to the credit will be single women. That is targeting that should be supported by the whole House.

Has my hon. Friend the Minister had a chance to read the Select Committee report on pensions, which says that nothing is inherently wrong with means-testing, as it reduces the high withdrawal rates—previously, about a third of pensioners lost all their occupatonal pension and now none does so—and recommends that we should increase the income disregard so that pensioners can do more work without having any of that clawed back by the pension credit?

I have read the Select Committee report. Having served under two distinguished Chairmen of that Select Committee, it is always the first thing that I read at night—[Interruption.] A bit of Lib-Labery there. We will consider the proposals most carefully. I emphasise, however, that we are determined to increase the take-up of pension credit. All those on the minimum income guarantee will be moved automatically to the pension credit. We will write to others and there will be a major television and press advertising campaign. I hope that all Members of the House, whatever their feelings about the overall policy, can join in in their constituencies to make sure that the poorest pensioners benefit from the pension credit. We all have a role to play.

The Minister says that all those on the minimum income guarantee will be put automatically on to the pension credit. There are 670,000 pensioners on the minimum income guarantee who do not actually get it. Why does he think that it will be any different with the pension credit?

I want to be entirely fair about this, and take-up is always an issue. With all due respect, it was an issue for 18 years in an earlier part of our social and political history. The important point is that the poorest pensioners are more likely than others to take up income support or the minimum income guarantee. The proportion of the total amount available has a higher take-up rate than the number of claimants eligible for it, because the poorest tend to claim it most. However, I am not complacent. That is why I have outlined a range of proposals, including an advertising campaign and our writing to all other pensioners, to ensure that they know about the pension credit and will claim it.

The hon. Gentleman has asked a perfectly proper question, but I repeat the point that we all have a significant role to play in our constituencies in ensuring that many of the most vulnerable and at risk claim the credit, which is worth a significant amount of money to them.

Pensions-Related Benefit


If he will make a statement on the level of pensions-related benefit take-up. [108709]

The numbers receiving the minimum income guarantee have risen steadily by 170,000 since 2000, which is encouraging. We shall continue to streamline the claiming process to encourage pensioners to take up their entitlement.

As my hon. Friend the Under-Secretary has just said, we will write to all pensioners about the pension credit. I hope that, in a spirit of generosity, the hon. Gentleman will join us in our efforts by urging his constituents to claim what is rightfully theirs.

I thank the Minister for her response. She will be aware that £1.5 billion of pensioner benefits are not currently claimed and that the increase in the take-up of the minimum income guarantee in 2000—01 was just 1 per cent. She will also be aware that the Government's target for pension credit is just 3 million out of 3.8 million pensioners. Does she agree with the Public Accounts Committee that the Government's target lacks ambition? If she does, what does she intend to do about that poverty of ambition? Why should Members believe that the measures that the Government will introduce this time to increase take-up will be any more effective than the measures that they have introduced in the past?

I gather from that succession of questions that the hon. Gentleman and his party are against the pension credit. In that sense, he must explain why he is in favour of taking an average of £400 off half of all pensioner households before the next election.

We will make sure that we encourage all pensioners to claim their entitlement. We are doing more than any Government ever have by writing to each pensioner and by making it simpler to claim. Indeed, pension credit will be able to be claimed by making a simple telephone call. It would help us all if the Opposition parties, whatever their feelings about future pensions policy in this regard, stopped putting people off claiming the credit by saying that it is means-testing when it is not.

Is my hon. Friend aware that, in the two recent take-up campaigns in South Tyneside, almost 350 pensioners were identified as not receiving the proper entitlement? That represented a loss of income to the borough of hundreds of thousands of pounds. The success of the campaigns was put down purely and simply to home visits. Will my hon. Friend congratulate the campaigns on their success, which were supported by her Department, and devote more money to home visits so that we can make sure that pensioners get what they are entitled to?

My hon. Friend is right. In fact, almost 150,000 people have received an entitlement of approximately £20 a week extra as a result of our take-up campaign. That must be good.

My hon. Friend is also right to say that home visits can make a difference. In that regard, the local service element of the Pension Service will be able to ensure that more vulnerable pensioners who otherwise might not take up the credit will have an opportunity to do so. We are putting more resources and efforts into the local service as we move forward to the better service for pensioners that the Pension Service will represent.

May I ask the Minister one specific question about these pension-related benefits? Will she assure Britain's 11 million pensioners that any changes to the main inflation index along the lines proposed by the Chancellor in his Budget last week will not affect the annual uprating of pensions and other benefits?

The hon. Gentleman will have to arrange for his Front-Bench colleagues to ask the Chancellor that question, because he knows very well that I am not in charge of making any such arrangements—the Chancellor is. He needs to ask his questions to the right Minister, as I am sure he knows.

This is a question about the uprating of pension-related benefits. It is a very important question, because the Chancellor proposes to change the index from the retail prices index to the harmonised index of consumer prices—HICP— which is apparently called "hiccup" for short. HICP tends to be lower than the RPI. If the Chancellor decides to change to that measure, he could cut the value of the uprating for millions of pensioners. Will the Minister give an assurance that the value of the uprating of pension-related benefits will not be reduced if the Chancellor changes his measure of inflation?

The Chancellor said that he was considering making such a change and, as he does so, he will no doubt examine carefully the impact that it might have on pensioners and upratings. The hon. Gentleman must make his representations to the Chancellor, but I can say that since this Government came into office, pensioner income has increased by 20 per cent. That is what I call a proper uprating.

Benefit Application Forms


When benefit application forms were last revised to make them easier and simpler to complete. [108710]

The Department for Work and Pensions regularly updates its application packs to make them easier and simpler. As part of the Department's commitment to modernise our service, the introduction of telephone applications has proved particularly successful in simplifying and speeding up the application process. We are building on that success for those applying for the new pension credit.

While I note that reply, I am sure that my hon. Friend will be aware of the National Audit Office report that was published toward the end of last year. It clearly said that vast sums of money are not being claimed year on year by retired people who are entitled to benefits. That clearly happens because forms are too complex and long. That point was made repeatedly at a meeting of the Wandsworth pensioners forum in my constituency last month. Whatever changes the Department has made, they are insufficient to encourage people to claim the benefits to which they are entitled. Will he look again at the forms and their complexity and length?

And we do. I pay tribute to our staff in the Department who, for example, have recently won a plain English award for their work on trying to simplify forms. We also work closely with citizens advice bureaux. Obviously, we understand that forms are daunting at first sight, which is why the new Pension Service and people's ability to use the telephone to apply for benefits are so important. We shall take on board the points that my hon. Friend makes. We have made a lot of progress on our forms, but there is more to do. He raises a very important point for pensioners.

The Minister mentions the plain English award that the Department has won. I have in my hand a piece of paper from the Department. It is the standard letter sent to pensioners who apply for invalid care allowance, which begins:

"We are pleased to tell you that we have looked at your claim and decided you are entitled to Invalid Care Allowance".
The next sentence says:
"However, we cannot pay the benefit to you".
The letter continues:
"You are entitled to £43.15 a week from"
May, but the next sentence says:
"We cannot pay you from"

Does the Minister understand why pensioners in my constituency think that that is complete rubbish? Will he examine both that specific letter and the way in which pensioners are urged to apply for a benefit that they then cannot get?

We are still grappling—[Laughter.]—with the old computer systems that we inherited from the laughing Opposition. We have invested in computer systems and will get things right in future. The problem that the hon. Gentleman raises relates to the overlapping rule, but I take the point. He has a piece of paper in his hands and recent events suggest that his party is still associated with appeasement.

I am happy that the Minister has held talks with the National Association of Citizens Advice Bureaux on the compilation of forms, but many local bureaux are overwhelmed by people seeking their assistance in filling them out. The Department should try much harder to simplify the forms so that people take up the benefits to which they are entitled.

Again, I understand the point, but let us consider what has happened in practice. The minimum income guarantee form has been reduced from 40 to only 10 pages, and people will be able to apply for pension credit by telephone when they can talk to another human being who will explain it to them. Obviously, the forms are often complex and we need to simplify them, but we are making great progress.

In general, the simpler the form, the better the take-up. The Department's figures show that the number of people claiming incapacity benefit and disability living allowance on the grounds of mental illness increased by a quarter and by three quarters respectively between 1997 and last year. Why should that be? Is it simply that the application forms for those benefits have been simplified—welcome though that is—and that take-up has increased as a result, or does the Minister think that there are more significant and potentially alarming factors to do with the state of mental health in Britain today? What practical policies do the Government have to assist those with mental health problems both to stay in work and to find work rather than becoming trapped in dependency on benefits?

Again, that is an important question. It is interesting that more people across the western world have claimed incapacity benefits not in the last six years alone, but since about 1979. It is also the case that in recent years the proportion claiming that benefit because of mental illness factors or stress has increased, and we need to understand that. We are emphasising the importance of joining up different agencies around the theme of rehabilitation, and a number of pilot studies on that will start soon. It is unacceptable to the individuals concerned—many of whom would like to work—that so many are on incapacity benefit. It is a big issue. The number of those on such benefits has increased roughly threefold since 1979. We all need to think hard about that and to take action, which is what we are doing.

New Deal (Leicester)


If he will make a statement about progress with the new deal in Leicester. [108711]

The new deals are performing well in Leicester. Up to the end of last year, more than 4,000 people in the city had moved into work through new deals, including 1,200 in my hon. Friend's constituency.

Is my right hon. Friend aware of the success of a company called Business2Business, which provides ethnic minority projects under the new deal and has taken on 800 clients since it began? Does he agree that the best way to deliver the new deal to the ethnic minority communities is to ensure that organisations within the communities are used so that they can fully engage with their potential clients? Will he come to Leicester to see our success?

My hon. Friend makes an important point in a powerful way. I am aware of the work carried out by the minority ethnic outreach providers. It is a relatively new initiative and is having an impact. The House might be interested to hear some examples of the work undertaken by the providers. They include holding surgeries in mosques to attract a wider range of people from minority ethnic communities and working in partnership with good employers, such as Sainsbury's, by having a stall within the shopping area to incorporate discussion of outreach services, but more needs to be done. I am happy to take up my hon. Friend's invitation to visit Leicester to see at first hand what is being done there and to discuss with the minority communities what more they believe we could and should do.



If he will take steps to encourage optional later retirement. [108712]

Yes, our Green Paper sets out proposals to increase options for older people to stay in work longer, which include drawing a pension and working part-time, providing better increments for those who defer taking the state pension, legislating against age discrimination and building on the age positive campaign to raise awareness of the business benefits of older people staying in the work force.

We all realise that we need to encourage people to stay on after age 65 if they are able and willing to do so. For many people, however, the main issue is that they no longer want to work 100 per cent. of the time, and they would like to have a gradual, phased retirement. Does the Secretary of State agree that we need to introduce measures to encourage and facilitate that?

I very much agree, with one slight qualification. It is not for the Government to say that people ought to work longer. The key thing is that they have a choice that enables them to bring into correspondence their expectations of income in retirement and their other interests. Of course, whether they want to continue working also depends on how fit they feel. As part of that greater choice, people should be able to work part-time and draw down a pension. We make proposals for that in our Green Paper, in relation to both the tax treatment and the scheme design.

As the Secretary of State said, raising the age at which people cease to work was one of the proposals in the recent Green Paper. Has he seen the Institute of Directors response to that, which was released today? It describes the Government as

"barely scratching the surface of the pension problem."
Ruth Lea said:
"There is no doubt about it, there is a pensions crisis in this country…people are not saving enough…the rates of return on pension saving have suffered, partly reflecting…the current Government's removal of the tax credit on dividend payments…We doubt if [the Government] recognise that there is indeed a pensions crisis."
Will the Secretary of State now admit that it was the Chancellor's £5 billion a year smash-and-grab pensions tax raid that caused the crisis? Should not he now apologise to the millions of British people who will enter retirement as the victims of Labour's pensions crisis?

We could take more seriously the crocodile tears of the hon. Gentleman and those of his right hon. and hon. Friends who mouth this stuff if they came to the House with a commitment to reinstate the provision that they complain is being taken away. However, the hon. Member for Havant (Mr. Willetts) is on record as saying that the Conservatives are not making such a commitment.

The hon. Member for North-East Hertfordshire (Mr. Heald) referred to the Institute of Directors representations. We shall carefully consider those and the other 800 or more responses to the Green Paper. I am sure that the way to approach this challenge is through the mix of proposals that we have set out, combining informed choice, flexibility in retirement, radical simplification of the pensions landscape and opportunities such as those that I have just described, which will allow people to choose to draw down a pension and work part-time. We also want to provide protection for scheme members who feel vulnerable at the moment because of the schemes that have closed. All that and more will be in our response to the Green Paper.

I agree with my hon. Friend the Member for Broxtowe (Dr. Palmer) and the Secretary of State. Does my right hon. Friend agree that it would be helpful to have legislation on age discrimination? Has he considered the experience of B&Q, which has found that by employing older people it gets employees with greater experience and wisdom? Does not that also apply to the Government and the House of Commons?

The longer that my right hon. Friend can go on asking questions like that, the better. Like him, I commend firms such as B&Q and Asda, which have led the way not only in making the business case for employing older people but in showing that that has commercial and customer benefits. That extension of choice, together with a simpler occupational pensions system and greater security within that system, is the sensible way forward.



What steps he is taking to help jobseekers find work. [108715]

We are taking a wide range of steps to help jobseekers to find work, including the roll-out of Jobcentre Plus, delivering a work-focused service to all; the new deals, which have got 750,000 people into work; employment zones and action teams, which are helping a further 90,000 people in disadvantaged areas, including 2,000 in Devon, to find jobs; the minimum wage and tax credits, which guarantee parents with one child £237 a week for full-time working; and new technology such Worktrain and job points, which provide information about jobs and training. Those policies have ensured that since the start of the recent global downturn, the number of people working in the UK has increased by 500,000.

I am grateful to the Minister for his comprehensive reply. I know that he is doing his best, but many employers in my constituency report a growing trend whereby young jobseekers arrive for a job interview but through their behaviour demonstrate that they are not remotely interested in taking that job, or perhaps any job. Does he think that we are down to a small but stubborn minority of young jobseekers who are happy to receive benefits from the rest of us but are not remotely interested in work? What does he propose to do about that?

The hon. Gentleman may have answered his own question, but he must not talk down his constituency. South-West Devon has a high standard of living, with only 1.3 per cent. of adults in the constituency unemployed. [Interruption.] The hon. Gentleman barracks me, saying, "It says here," and it does say so here, but the here from where I got the facts is his website.

The Minister will be aware that one of the most vulnerable groups of jobseekers is lone parents, but the new deal for lone parents has already moved 175,000 lone parents from welfare into work, and for the first time more than 50 per cent. of lone parents are in work. Despite the Opposition's threats to the new deal, will he confirm that that fine scheme has funds to continue?

I can confirm that. My hon. Friend is right to say that the Government have made progress in that respect. We are proud of the achievement, but more needs to be done, and we shall carry on until we have made work pay for lone parents and helped to bear down on poverty in lone parent households.

Further to the highly pertinent question posed by my hon. Friend the Member for South-West Devon (Mr. Streeter) and the Minister's somewhat neurotic reply, will the right hon. Gentleman now answer this simple and intelligible question: how many jobseekers have had their benefit docked or withdrawn after refusing three reasonable job offers?

With all due respect to the hon. Gentleman, of whom we on this side of the House are very fond, I am not sure that he should accuse other Members of being neurotic. As for the answer to his question, he knows that the number is relatively small. He knows from our previous discussions that the action is intended to be a sanction of last resort, not a mainstream means of doing business.

I am sure that my right hon. Friend accepts that lone parents have been encouraged into work not only by the new deal for lone parents, but by the working families tax credit. In the past week, it has come to my notice that some people who applied for working families tax credit two or three months ago have not had their claim considered. In the light of last week's hiccup in the transition to the new child tax credit, will he engage with Treasury Ministers to ensure that those who are waiting for their claim for working families tax credit or the new child tax credit to be processed do not fall to the back of the queue and that their claim will be dealt with quickly? Many of the lone parents involved are already in work and desperately need that money.

Of course I will do what my hon. Friend asks, and ensure that officials in our Department take those issues up with Treasury officials. There are three things that we must not lose sight of. First, the success that the Government have been able to achieve in the labour market is due to the fact that a combination of tax credits and the minimum wage means that work pays. Secondly, the jobs are there and, thirdly, the Department's proactive approach to helping people through training, advice or even encouragement into those jobs is having a discernible impact on the labour market.

Pension Credit


What estimate he has made of the number of pensioners who will be in receipt of means-tested benefits once the pension credit has been introduced. [108716]

About half of pensioners will be entitled to pension credit when it is introduced in October, and they stand to gain on average £400 a year. We want as many people as possible who are entitled to it to receive the pension credit. We outlined earlier this Session the measures that we are taking to improve take-up.

The Minister might have answered the question, but perhaps he could explain what his colleague, the Under-Secretary of State for Work and Pensions, the hon. Member for Liverpool, Garston (Maria Eagle), meant when she said in response to Question 5 that the pension credit was not means-tested. What on earth can she have meant?

This is an income-tested scheme, but it excludes those with savings of less than £6,000—[Interruption.] We are grappling with problems, but the Opposition are prattling about them. I would rather be grappling than prattling. We are grappling with the issue, and want to increase take-up as much as possible. The system will benefit pensioners. Whereas the previous Administration—[Interruption.] I know that it is boring to talk about it, but I shall do so. Whereas the previous Administration penalised people who saved, we are rewarding them.

I congratulate my hon. Friend on behalf of pensioners in Hamilton, South, who welcome the minimum income guarantee and who will, I hope, benefit from the pension credit as well. However, will he join me in condemning those who continue to seek to carry on with the rhetoric of how we look at means-testing benefit instead of accepting the benefit and arguing strongly that pensioners have a right to receive it, and that right is not means-tested?

I thank my hon.Friend for a serious question about a serious issue that should be treated seriously by Members on both sides of the House. Pension credit is an important new weapon in our attack on pensioner poverty. I am pleased that in absolute terms pensioner poverty is now down by 60 per cent. under this Labour Government, and in relative terms the number of old people in poverty has declined by 400,000. Those are results, and we will get better results when we introduce the pension credit.

Final Salary Pension Schemes


What measures he plans to take to address the problems surrounding the closure of final salary pension schemes. [108718]

Our Green Paper "Working and Saving for Retirement" sets out proposals to encourage employers to promote and persevere with pension schemes of all kinds, including defined benefit schemes. We value our voluntary system of pension saving because it has delivered good results. We must all play a part to ensure that it continues to deliver, including the financial services industry, the Government, employers, employees and their trade unions. For our part, we intend to simplify significantly the regulatory regime, which could save employers £150 million to £200 million a year in administrative costs.

I thank the Minister for her answer. However, since the Chancellor's decision to abolish dividend tax credit, £5 billion a year has been removed from people's pension funds, which has exacerbated the situation and led to the winding-up of 63,955 pension schemes. Will the Minister acknowledge the impact of that pernicious policy and the role that that tax has played in the current pensions crisis?

No. Mr. Speaker. I wish that when Opposition Members referred to the so-called £5 billion tax rate they would mention the concomitant £3.5 billion cut in corporation tax that accompanied it. Of course, they never mention the fact that pensions continue to enjoy generous tax privileges worth £13 billion a year. As for the hon. Gentleman's claim about the number of closures of final salary schemes, the Pension Schemes Registry figures for 2002 showed that in that year 3 per cent. of schemes closed to new members. He must remember that final salary schemes are still the most widespread form of provision. There are 5.7 million members of private pension schemes, 4.6 million of whom are in defined benefit schemes. We have £750 billion invested in occupational pensions, and while it is right that hon. Members should consider issues relating to private pension provision—

Order. I think that that will do the hon. Member for Boston and Skegness (Mr. Simmonds).

I warmly welcome the comments of my hon. Friend the Minister on encouraging all employers to contribute to personal and other pension schemes, but is it not time that we started to consider placing a statutory obligation on all responsible employers to do just that?

The Government are not yet convinced that we should abandon the voluntary nature of our private pension provision. Neither, I notice, is the Select Committee on Work and Pensions, which published a report recently. Our voluntary scheme has given good results and we should be wary of throwing the baby out with the bath water. We need to make the voluntary provisions work better, but if that were not to succeed more compulsion would be the alternative. We all need to consider which is the best way to ensure more pension saving—the voluntary scheme or moving to more compulsion. My right hon. Friend the Secretary of State has announced a pensions commission, which, among other things, will consider some of those issues.

Is the Minister aware that some employers are not merely closing their schemes, but defaulting on their obligations to existing members? Will she investigate in particular the recent scandal of Lufthansa, which has told 200 long-standing UK employees that they must expect a cut of a third in their pension entitlement, despite the fact that the company is highly profitable and well able to service it?

I will have a look at that. The hon. Gentleman refers to one example, and there are others. The Green Paper sets out ideas on better member protection and ensuring that when schemes wind up, whether solvent or insolvent, there is a proper distribution of the assets in relation to the scheme. The downside of such behaviour from certain employers is that it undermines the faith and belief of all potential savers in private pension schemes. We have to get the balance right; otherwise, we cannot expect our fellow citizens to put their hard-earned money into long-term products such as pensions.

Jobcentre Plus


If he will make a statement on Jobcentre Plus services in north London. [108719]

Jobcentre Plus services in the north London district are provided through our network of social security offices and jobcentres. Those will be replaced with new, integrated Jobcentre Plus offices in 2005—06.

Jobcentre Plus will continue to provide the same high level of service that has already helped over 1,300 people to move into work through the new deals in my hon. Friend's north London constituency.

As my hon. Friend is aware, I am very concerned about the lack of consultation on some of those changes. Can he explain why jobcentre customers and clients have so far not been consulted on the changes when offices close? In future, will customers be consulted?

I understand the question. Indeed, we shall have the opportunity in the Adjournment debate at a late hour tonight to discuss that important subject further. We intend to provide jobcentre services in the resource centre in my hon. Friend's constituency, and a job point will also be located in a local library. People can also phone Jobseeker Direct, so his constituents will be able to make full use of the excellent Jobcentre Plus service.

Child Care


What progress is being made to provide child care for parents seeking work. [108720]

Since 1997, about 650,000 new child care places have been created, benefiting over 1.1 million children, which means that we are well on track to meeting our target of creating new places for over two million children by 2006. From this month, a child care partnership manager will be working in every Jobcentre Plus office to ensure that barriers to employment relating to child care are tack led and to encourage customers, where sensible, to consider a career in child care.

I thank my hon. Friend for that answer. She knows that I am fully aware of how much the Government have done to support families and, in particular, child care for parents in work and those seeking work. Will she consider the issue for lone parents, especially the need to settle their children in child care before they begin work as well as the necessary payments to cover that period? In addition, will she consider low-paid workers, in particular lone parents, who may find themselves out of work through no fault of their own? What measures can be taken to ensure that their children remain in settled child care before they embark again on a new job?

My hon. Friend is right that parents, particularly lone parents, when considering going to work need to feel that their children are safe and in an appropriate environment. My right hon. Friend the Chancellor of the Exchequer announced in his Budget last week the idea of taster weeks to allow lone parents to check out child care provision so that they are sure that it is appropriate for their child before taking it up and going to work.