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Work and Pensions

Volume 461: debated on Monday 4 June 2007

The Secretary of State was asked—

New Deal

Since 1997, long-term youth claimant unemployment has fallen by over 70 per cent. Independent research published by the National Institute of Economic and Social Research confirms that the new deal has contributed significantly to that improvement. It found that long-term youth unemployment would have been twice as high without the new deal for young people. As a result, the Department is spending £5 billion per year less on unemployment benefits than in 1997.

The figures that have been presented to me tell me that, unfortunately, nearly half of all young jobseekers who leave the new deal for young people return to benefit after a year. What are the Government trying to do to direct those young people into sustainable jobs and to change the present situation?

We are looking to improve the delivery of services under the new deal and we will make announcements about that shortly, but there is no doubt that the new deal for young people has been a success, as I described. It has helped over 700 young people in the hon. Gentleman’s constituency. Without this Labour Government putting that investment in, they would have been looking at years of unemployment, as they did under the previous Conservative Government.

In my constituency, 1,700 young people have been helped back into work under the new deal. However, over 4,000 16 to 18-year-olds are categorised as NEETs—not in education, employment or training. Does my right hon. Friend agree that we need to be positively targeting those young people via successful schemes such as train to gain and entry to employment, which we are operating successfully in Barnsley, East and Mexborough?

I am grateful to my hon. Friend. There is no doubt that we need to target additional help and support for that category of young people. Train to gain will help us to do that. The activity agreements that my right hon. Friend the Chancellor announced in the Budget will help us, too. It is important, however, to keep the matter in context. In 1993, one in four 16 to 25-year-olds was not in education, employment or training. Now the figure is closer to one in six.

Does the Secretary of State agree that, despite the successes of the new deal, unemployment among young people is now rising, the number of NEETs is rising and so is the inactivity rate? Although many of us hope that he will have a long stewardship of the Department to implement many of his longer-term decentralising reforms, might not one move be to bring in the new deal from day one of unemployment?

We will respond shortly to the Freud report on the next stage of welfare reform. David Freud recommended that we provide more targeted help and support at an earlier point in the process for those who perhaps have the greatest overall barriers in coming back to work. We will make an announcement about that shortly, but we continue to look carefully at the new deal, at how it is working, and at the need to increase flexibility and better control front-line aspects of the new deal programme.

Personal Accounts

We will publish our response to the consultation on the personal accounts White Paper shortly, together with our response to the recent Select Committee on Work and Pensions inquiry. Our intention remains to introduce a Bill in the next Session of Parliament.

Personal accounts give many thousands of working families in my constituency who do not have an occupational pension an investment option, but only if they have confidence in that option to invest in those accounts. Can the Secretary of State indicate what he will do to ensure that those people have confidence and invest in those accounts?

The first and perhaps most important thing that we can all do is to make sure that there is a strong and enduring consensus around the policy itself. I believe that that is the case after the excellent work that Lord Turner did. The key responsibility, of course, will be in this House. We have legislation to enact in the next Session, as I said. It will be important that the personal accounts delivery authority, the new independent board that will be set up to oversee the introduction of the new policy, has the right remit and produces the right guidance, information and help for millions of workers who are not familiar with occupational pension schemes, but who, like many people in my hon. Friend’s constituency, are keen to start saving. It is the responsibility of Ministers, the delivery authority and all of us in the House to continue to make the case for additional workplace savings. We must do all we can here to solidify that consensus and to ensure that the reform can serve her constituents in the way in which she and I would both like.

Does the Secretary of State agree that, alongside encouraging personal accounts, the Government must do all they can to keep good-quality defined benefit schemes in operation? If so, why have the Government chosen explicitly to ignore the recommendation of the Government Actuary in relation to the level of the contracted-out rebate that applies from April this year? Is not that decision essentially another back-door tax on pensions? Will the Secretary of State review that decision in April 2008, which the right hon. Member for East Ham (Mr. Timms) indicated would happen when he was Minister for Pensions?

We always keep such decisions under careful review. The hon. Gentleman is a one-track record when he refers to all these reforms; he has nothing positive or constructive to offer. We both agree that consensus is an important part—[Interruption.] The hon. Gentleman is having a second bite at asking his question, but he should have got his first attempt right. If he had done so, I might have answered in the way that he would like, but I prefer to answer in the way that I wish given the question that he actually asked. I hope that the Liberal Democrats will at some point come to support—however grudgingly—the policy on personal accounts.

Does my right hon. Friend agree that it is particularly women in work who have missed out on occupational pensions who miss out on pensions? How will he ensure that the new personal accounts are targeted on such people so that they get the necessary advice to ensure that they can fill that important gap in their pension provision?

If we are to succeed in doing that—as my hon. Friend and I both wish us to do—we must continue the discussions that we are having with the pensions industry, employers and trade unions. It is important that personal accounts are targeted specifically on the group of people that Lord Turner and the Government have in mind: low and moderate income earners who work for companies that do not have an occupational pension scheme. We can continue to ensure that the policy works in the way that my hon. Friend and I want by making sure that there is a cap on contributions, that there are restrictions on transfers in and that there is a simple scheme exemption process. Personal accounts must be complementary—they must not compete with good-quality existing pensions. I am sure that we can design the system in that way.

Is not the Secretary of State ashamed of the low savings rate that there has been in this country under this Government, and is not the main reason for that the removal of tax reliefs, particularly on pension funds, along with the downgrading of tax relief on other saving schemes? Does he accept that we need better tax breaks to get people to save more, which they clearly need to do to have a prosperous retirement?

Fiscal incentives will be attached to the introduction of personal accounts; I am sure that the right hon. Gentleman is aware of that. If he and his party colleagues truly believe what he has just said they would be proposing to reverse the dividend tax credit changes that we made. I understand that they are not planning to do so, although he personally might favour that.

The Secretary of State has already agreed with the hon. Member for West Lancashire (Rosie Cooper) that public confidence in the pension system must be restored if personal accounts are to be successfully introduced. Does he understand that a vital part of that process is the delivery, without further delay or prevarication, of a fair and equitable solution to the situation of the 125,000 victims of pension scheme failure whom the ombudsman’s report identified?

Yes, I do accept that, which is why we have brought forward further proposals to make the financial assistance scheme more comprehensive in its scope and more generous in its application. It is also why we have set up a review to discover whether there are other unclaimed assets that we can use to improve the minimum 80 per cent. guaranteed level of compensation that will be available under the FAS. As well as accepting that that is important, I am confident that the Government have introduced a full and comprehensive set of measures to deal with the problem. Looking forward, in respect of the Pension Protection Fund, we have the right guarantees in place.

I am glad that the Secretary of State accepts the need to restore confidence, but how does the emotive and aggressive language of his High Court submission against the ombudsman help to restore that confidence? Will calling the ombudsman’s decision “flawed, irrational and peripheral” rebuild that confidence? Or perhaps he thinks that that objective will be best achieved by asserting that the parliamentary ombudsman—an Officer of this House—is

“no better placed to form a view than the Secretary of State”?

I will tell the Secretary of State what he needs to do if he wants to rebuild confidence—

Order. The hon. Gentleman has rightly asked a question, but he should not give advice—not at this stage.

The Secretary of State always acts on the basis of the legal advice that he receives. The Government’s lawyers produced those arguments and I am happy to stand by them.

Inactive Benefits

As at November 2006, 3,701,710 people were in receipt of inactive benefits in Great Britain of whom the majority—almost 2.7 million—are customers on incapacity benefits.

The number of people on incapacity benefit for five years or more has gone up from 67,000 in 1997 to 1.5 million today. What are the Government doing to address this problem, and how did they get themselves into this mess in the first place?

The hon. Gentleman’s tone seems to be entirely out of synch with that of his Front-Bench colleagues on this important issue, on which they have sought to build consensus. The fact is that, after two decades of remarkable rises in the number of people on incapacity benefit, we have had two years of sustained falls; nevertheless, we still have to go further. The national roll-out of pathways is important, and the Welfare Reform Act 2007, which passed through this and the other place, is also an integral part of the process. Ultimately, we want to move away from a system under which too many people were written off during many years of Tory neglect and avoidance of supporting people who needed support through the welfare system.

It must be right that those who cannot work because they are simply not able to perform their duties as an employee are able to get benefits. However, is my hon. Friend satisfied that the appeals system is working quickly enough, so that, when people are not given the benefits that they deserve, they can go to the tribunal speedily to enable such decisions to be made and be satisfied with the result, and so that we can have proper deliberations on these matters?

My right hon. Friend is right to say that we must ensure that the appeals mechanism is speedy, but it must also be accurate. An important part of that is getting the initial assessment correct, because if we can do that, far fewer appeals will be needed and the type of frustrations that he identified will no longer be in play. That is why, when we reform the personal capability assessment, we will transform it so that it takes into account modern trends in disability, mental health illness and learning disabilities. That is a real change from the past.

The Minister did not really answer my hon. Friend the Member for Shipley (Philip Davies) at all. Why were 2 per cent. more people of working age on incapacity benefit in August 2006, compared with May 1997?

The fact is that there have been two years of reductions in the number of people on incapacity benefit. The investment that has been put in place through pathways, which the hon. Gentleman and his colleagues opposed every penny piece of, has had an important impact. Some 32,000 people have got into work through the roll-out of pathways thus far, and 900,000 fewer people are on inactive benefits today, compared with a decade ago; that is more than 300 people each and every working day supported off benefit and into work. When we voted on these issues in the Commons, the hon. Gentleman opposed every single penny piece of investment to make all this work and to make the transformation of people’s lives possible.

About 8 million people of working age are economically inactive. The number on benefits is perhaps slightly under half that, but the largest single group on incapacity benefit remains those with chronic mental ill health conditions. Is the Minister convinced that we are doing enough to tackle some of the problems that those people experience in getting into work, particularly with medium-sized employers, among whom there seems to be a continuing reluctance to accept the employability of such individuals?

My hon. Friend is right, and one of the successes of pathways thus far is that we are trying to support people, often with complicated needs, who have been excluded from the labour market for prolonged periods. Importantly, that includes those with learning disabilities—the labour market’s attitudes toward those people are gradually changing, although not enough—and those with a fluctuating mental health illness, who constitute the largest number of people coming on to the benefit. Again, the change in the assessment should help in that regard, but my hon. Friend is absolutely right to say that we have to go further in working with employers—both private and public sector—to give job opportunities to those on incapacity benefit with a mental health illness who wish to work.

There is an emerging consensus that there must be large-scale recycling of benefit savings to fund many more voluntary and private sector welfare-to-work programmes. However, that can happen only if the Chancellor of the Exchequer allows benefit savings from the Department for Work and Pensions’ annually managed expenditure budget to be moved across to its departmental expenditure limits budget. Can the Minister confirm today that the Chancellor has personally signed up to that, because there is a genuine fear in the sector that he has not, and that he is once again being the road block to reform?

The Chancellor publicly declared that he would champion that and many other reforms in the public sector, and along with my right hon. Friend the Secretary of State, he attended the launch of the Freud report. The fact is that, if we had continued with the increases in the number of people on incapacity benefit that we inherited from the party of the hon. Member for Bury St. Edmunds (Mr. Ruffley), we would not be talking about reductions in the number of people on incapacity benefit; the number today would be 4 million. In terms of the attitude of the Chancellor, the sound economy, macro-economic stability, the investment in the new deal and the active labour market policies—all of which he championed, in contrast to the Opposition—have helped to make a reality of much of our success in the world of welfare.

Child Maintenance

5. Whether he plans to review issues relating to child contact and access as part of his reforms of child maintenance. (140294)

Does the Minister not realise that, in many instances, fathers are being excluded from the upbringing of their children? Although it was recognised that there were good reasons for separating the issues when the current legislation was introduced, does he agree that every child benefits from access to, and contact with, both parents, and from both parents being involved in their upbringing? Would this not be a good moment to review the legislation and consider shared parenting?

On the hon. Lady’s first point, I agree that it is of course desirable that both parents continue to be involved in the upbringing of the child. We would all subscribe to that idea. However, the point is that relationships break down, and it is then up to the separating couple to decide how they will maintain their relationship with the child or children. Some couples will do that voluntarily and others as a result of being forced to do so by an agreement that is arrived at in court. However, what should not happen is that a dispute between parents results in the child or children becoming a pawn in the settlement of maintenance. The two issues are linked, but in establishing a system of determining maintenance, it is important that they are not linked in the way in which the hon. Lady suggests.

I say to my hon. Friend respectfully that it is not a bad idea to consider that issue as part of the review and reform of the child support process. In doing so, will he consider the case of one of my constituents, Frances Lyttle, who has had a nightmare 10 years since her husband left her with two children? She was in court today, trying to resolve divorce issues. The Child Support Agency is absolutely incapable, and it is so inflexible that its actions are creating an injustice while the courts try to bring about a just settlement.

My right hon. Friend is, I think, talking about contact orders, which are not the responsibility of the Child Support Agency, nor will they be the responsibility of its successor body. She may be aware that the Government have already taken action in the Children and Adoption Act 2006 to try to reinforce contact orders. I repeat that we would not want a tussle between parents over contact to drag in the children and make them a pawn in the argument. That would not be right, which is why the issues are quite properly kept separate. The matter was reconsidered in the context of David Henshaw’s review, and there was no consensus among the groups that were consulted for any change in the arrangements, which is why we have decided to persist with them.

It is not often that I entirely agree with the Minister but, on this subject, I do. As someone who has dealt with the matter as a solicitor and as a Member of Parliament, I urge him to resist calls to link the two issues, because there is a real danger of children being used as pawns by both sides in such an argument. It is important that the issues are kept separate.


6. What assessment he has made of trends in unemployment levels in the UK; and if he will make a statement. (140295)

In the early 1990s, unemployment rose by more than 500,000 in one year alone, and it was consistently above 10 per cent.

Since 1997, unemployment has fallen substantially, the number of people in employment is up by more than 2.5 million, including by 93,000 in the last year alone, and the inactivity rate is now close to its lowest level for 15 years.

My constituents recognise that the long-term trend this past decade has been one of falling employment and record numbers of people in work, but those who work hard, play by the rules and pay their way believe that there are still too many people claiming benefits who could be working. What more can the Government do to tighten eligibility so that those people get off benefits and get a job?

I am grateful to my hon. Friend. What he has said will be echoed in constituencies all over the country. The benefit system has to be fair and reasonable—fair to those on benefits, but also fair to those who pay for benefits through their own hard work. There is a case for looking again at some of the rules, particularly those on jobseeker’s allowance, and we are doing that. We hope to bring forward proposals shortly.

Does the Secretary of State agree that we are at our best when at our boldest? I urge him to be bold and say that we will aim for nil unemployment in some areas of the country, such as my constituency, where the number of jobs about to be created in the Southern general hospital and its associated development is far greater than the number of unemployed people in that area. A drive towards nil employment would be bold but it would clearly discriminate in favour of those who are in greatest need. Will he order his civil servants to work accordingly?

It will not surprise my hon. Friend that I agree that we are at our best when at our boldest. I have visited his constituency with him and seen some of the developments that he mentioned. The really gratifying thing about the changes that have taken place in unemployment is that the biggest falls in the past 10 years have been in constituencies such as those of my hon. Friends the Members for Glasgow, South-West (Mr. Davidson) and for Dudley, North (Mr. Austin). That is right and proper. The Labour Government are here to help those in the greatest need; that has been and will continue to be our priority.

On the question posed by the hon. Member for Dudley, North (Mr. Austin), has the Secretary of State considered the welfare arrangements in Wisconsin that created a life-term period for access to welfare, which had an extraordinary impact on the number of people claiming benefits?

Jobseeker’s allowance is already a time-limited benefit, and we have no plans to change any other arrangements.

Mr. Speaker, you will know about the recent announcement in Wallasey about job losses at my local Burton’s Foods’ biscuit factory. Initially, I thought that 660 jobs were to be lost, but that number has gone up to 821. Will my right hon. Friend meet a delegation and tell us what to expect if the closures go ahead, so that we can try to recover the low rates of unemployment to which my constituents have become accustomed in the past 10 years?

I am happy to meet my hon. Friend’s constituents. I understand that she already has a meeting arranged with the Minister for Employment and Welfare Reform. Jobcentre Plus will be there to help her constituents in any way possible. We have an effective and efficient system of providing such help that has, sadly, been tested on several occasions. I am also happy to discuss with her what arrangements we can put in place to help her constituents.

We recently had the honour, in my constituency, of welcoming my hon. Friend the Minister for Employment and Welfare Reform to meet 31 constituents—mainly single parents. In my right hon. Friend’s review of support for getting single parents into work, is he giving particular consideration to the difficulties of parents of larger families with more than two children, and to the support given to parents through Jobcentre Plus?

Yes, we are considering all aspects of the problem. There is no doubt that many single parents in London face serious problems with getting back into work, such as problems with transport and child care. We are working closely with the Mayor of London to address those challenges. My hon. Friend will know that we are also working with five boroughs in the east end of London to develop a more integrated, efficient and, I hope, more effective and individually tailored service to help people such as the ladies whom she mentioned get back into work. We have a responsibility always to continue to consider what more we can do to help, and we are certainly prepared to do that.

Occupational Pensions (Temporary Insolvencies)

7. If he will take steps to assist workers whose occupational pensions were wound-up by companies which were fully solvent but which created temporary insolvencies and closed pension schemes. (140296)

Ongoing solvent employers have a clear moral duty to support their pension schemes and to provide the benefits that members were expecting. The taxpayer should not be expected to step in and make up such shortfalls in scheme funding levels where there is a sponsoring solvent employer. However, we recognise the complexity of this issue, and one element of the financial assistance scheme review of scheme assets is to examine whether—in addition to those with compromise agreements—there are other pension schemes where it would not be reasonable to expect the employer to have a continuing responsibility for supporting an underfunded scheme.

Has the Minister read the forensic accounting study sent to him that showed that some leading American companies—highly profitable companies, such as EMC, EDS and Parsons—systematically manipulated their UK subsidiary accounts to create temporary insolvencies, wiping out their pension obligations? In those circumstances, will British pensioners be entitled to financial assistance scheme compensation, and will the Minister then pursue the companies to compensate the British taxpayer?

I obviously cannot comment on individual cases, but if the hon. Gentleman is concerned about those schemes, they should apply to the financial assistance scheme operating unit to find out whether they are eligible. We have drawn the definition of insolvency as widely as possible to allow people to do so, and it is also open to him to make representations to the Young review to find out whether they should be included in that category.

More than 50 per cent. of occupational pension schemes have assets that far exceed their liabilities, and other schemes are rapidly catching up with them. Can my hon. Friend give the House any assurance that we can stop employers raiding those pensions schemes in the future or creating contribution holidays for them, as happened in the past, which is exactly what got them into trouble?

I can give my hon. Friend the assurance that we now have a much more effective regulatory framework, and partly because of that framework and the pensions regulator’s work, deficits are falling, exactly as my hon. Friend says. The regulator works very closely with trustees to ensure that the promises that have been made to people will be delivered, because people are making contributions on that basis and they should expect that to happen.


8. If he will make a statement on progress in increasing opportunities for working people to save for their retirement. (140297)

The personal accounts White Paper, published last December, set out our proposals for increasing opportunities and incentives to save for retirement. We reached the end of the consultation period in March and shall publish our response shortly. Our proposals will place simplicity and independence at the heart of a system that, from 2012, will introduce a scheme of low-cost personal accounts for millions of people currently without access to good occupational schemes.

I am grateful to my hon. Friend for that answer, and like him, I am very proud of what Labour has done for pensioners over the past 10 years, but what is he doing to ensure that employers meet their obligations?

That is a very good point. Unfortunately, the truth is that only a minority of people currently have access to employer contributions to their pension, and through these reforms, we will now extend that to every employee, so that whenever an employee wants to save in their pension, it will be mandatory for their employer to match that, with tax relief from the state. That is a significant step forward.

Does the Minister agree that people would have greater confidence in saving for their own retirement if the Government had acted to reform public sector pensions, perhaps guided by an independent review? Will he join the consensus initiated by Lord Turner in another place on 14 May that the Government have so far failed to act on the issue? What steps will he take to answer that call?

I am sure that nurses and teachers will notice that the Liberal Democrats are now committing themselves to cutting their pensions, and I am sure that we will be very happy to debate that with them at the next election.

Child Poverty

Over the past decade, child poverty in the United Kingdom has fallen faster than in any other major economy, but we have to go further to achieve our target, which is why we published our refreshed child poverty strategy on 27 March.

Hundreds of thousands of children are still living in poverty, by the Government’s definition. If the Minister accepts that housing is a crucial part of removing children from poverty, will he prevail on the new Prime Minister to reverse 25 years of housing policy failure and restore council house building?

Of course, we have invested more than ever before in housing, as a Labour Government, certainly overcoming the record and our inheritance from the previous Government. But the fact is that, in terms of the responsibility of the Department for Work and Pensions, the biggest significant input that we can have is to encourage ever more people to get the chance to get into work—work that pays, and work that is sustained. Of course, we have further to go, but it is important to reflect that, each working day that we have had a Labour Government over the past decade, 190 children have been lifted out of poverty, which is in stark contrast to the fact that, in the previous 18 years, 240 kids went into poverty every day.

Carer’s Credit

In 2010, we estimate there will be around 240,000 more people who could qualify for the state second pension through carer’s credit. Of those, around 160,000 could also qualify for carer’s credit for their basic state pension, and we will work with carers’ representatives to encourage all those who are eligible to apply to do so.

I am grateful to my hon. Friend for that reply, but given the invaluable contribution that carers make to our society and the billions of pounds that they save the taxpayer, could we not do more? Will my hon. Friend consider taking specific steps to ease the financial burden on carers, specifically to ensure that carer’s credit and carer’s allowance are equivalent to the national minimum wage and that carer’s allowance can be claimed in conjunction with the state retirement pension?

Obviously, I can agree with my hon. Friend about the valuable work that carers do and the energy and commitment that they give to their task. He raises two issues that are complex, especially the payment of carer’s allowance and the state pension. As he is aware, there is an overlapping benefit rule that makes it impossible to pay two income maintenance benefits to one individual at the same time. However, I hope he also recognises that we lifted the age barrier on entitlement to carer’s allowance so that people could carry forward their entitlement to the allowance past the state pension age. Even if such people could not claim carer’s allowance itself, they were thus entitled to claim the carer’s premium within pension credit.

We are examining ways in which we can enhance the income of carers, not just in retirement but throughout their lives, which is why, for example, carers can earn up to £87 a week as well as receiving carer’s allowance. I agree with my hon. Friend that we need to examine constantly how we can improve the situation for carers, which is why we are undertaking a review of the national carers strategy.

Given that, according to Carers UK, we will need an additional 3.5 million carers in the next 30 years but that more than half of current carers say that financial worries are affecting their health, does the Minister agree that the complexity of the benefits system does carers no favours? Does she have any plans to review the complexity of the system to ensure that we encourage and support people in their caring roles, rather than frustrating them to the extent that they pass on their responsibilities to the state?

As I am sure the hon. Gentleman is aware, we have taken steps to simplify elements of the application for carer’s allowance. We are constantly looking at how we can improve the application process. We work closely with Carers UK and other carers organisations to examine the wider issues for carers—not just the benefit issue, important though that is. I have pulled together several carers stakeholder groups to examine some of the wider strategic issues. I hope to update the House as appropriate when we have further discussions with that group.

May I push my hon. Friend a little bit further on people with old-age pensions being able to claim carer’s benefit?

Well, I appreciate that my hon. Friend, in the nicest possible way, wants to push me a little further on this particular issue. There is a complication with two benefits that are essentially for income maintenance being paid to the same person for the same purpose at the same time. We have lifted the state pension age barrier, which, to be frank, was in place for all the years of the previous Government. We lifted that to allow carers to claim the extra entitlement through pension credit that gives them an extra £27.15 a week, to recognise the caring element of their work. The problem is difficult to explain and to understand, but it arises from the overlapping benefits rule. The rules, which have been agreed by this House, across the House, on more than one occasion, state that two benefits cannot be paid to the same individual for the same purpose at the same time.

Does my hon. Friend agree, however, that financial pressure is one of the biggest worries that carers suffer? As my hon. Friend the Member for Hartlepool (Mr. Wright) rightly asked, should we not ensure a minimum standard by introducing a minimum wage for carers?

The carer’s allowance was introduced by a Labour Government in the 1970s as a recognition of carers’ commitment to their caring responsibilities. It was never intended to be a carer’s wage, and that has rarely been challenged in this House. We want to look at the wider issues relating to support for carers and, as the hon. Member for South-West Surrey (Mr. Hunt) allowed me to point out, we are working with carers organisations to look across the issues, not just at the benefits system. I reiterate that even carers who receive the full carer’s allowance may earn up to £87 a week, after deductions, to ensure that they enhance their income. We are working closely with carers organisations to examine the wider strategic issues relating to carers.

Financial Assistance Scheme

11. How much has been distributed by the financial assistance scheme; and if he will make a statement. (140300)

As at 25 May 2007, the financial assistance scheme had paid out more than £4.6 million gross—more than £3.6 million net—to more than 1,200 qualifying members. We are paying everyone we can, and members who believe that they are eligible for assistance but are not being paid should ask their pension scheme trustees to apply on their behalf.

I do not think that that will be of much comfort to the members of the pension scheme of British United Shoe Machinery in Leicestershire, who are still waiting for money after the collapse of their scheme. Will the Minister confirm that more than 9,000 people are eligible and that only a very small fraction of that number have been paid from the FAS; and that, even going by the figures that he gave, it has cost more than twice as much to administer the scheme as has been disbursed?

My understanding from meeting people from the scheme is that people in the BUSM scheme are being paid. I believe that 18 members’ survivors have been assessed for initial payments and six are in receipt of initial payments.

The more general point is that we cannot pay people if the schemes do not give us the information on what people are owed. We are working with some trustees, such as those at BUSM, where we get good co-operation, but there are others who are not co-operating with us to give us the information we need. My right hon. Friend the Secretary of State has made it clear today that he is prepared to use criminal sanctions against those trustees who persistently refused to give us the information we need.

The Minister said a few moments ago that more than 100,000 beneficiaries of the FAS scheme are now getting the money, but how many of the 125,000 are getting their full entitlement under the scheme and how many of the 700 Dexion workers whose pensions were stolen from them have received the full amount that they were promised?

The hon. Gentleman’s question demonstrates a misunderstanding that is quite prevalent. There is no system to pay all 125,000 people now, because the vast majority have not reached pension age. No one is saying that all 125,000 should be paid now. The key point to make is that trustees should be giving us information on people who have reached pension age, so that we can pay them—

I have. The hon. Gentleman asked that all 125,000 be paid, but no one is proposing that because the majority are below the age of retirement.

Will the Minister disown the claim made on GMTV recently by the Chancellor that every single one of the 125,000 will get at least 80 percent. of their pension? Does he accept that that claim is inaccurate and cynical, and that most FAS claimants, when they get paid at all, will get only half of their original entitlement, with many receiving much less? Why is this Government treating them like second-class citizens?

The hon. Gentleman will not be surprised to hear that I do not disagree with the Chancellor, for the good reason that there is no difference between the hon. Gentleman’s party and mine on the issue. The only difference is on whether more taxpayers’ money should be put into the scheme. A few weeks ago, the hon. Gentleman said that there should not be more money for it, but when we found money to put into it and doubled the scheme to nearly £2 billion in net present value, the Conservatives agreed with us. The difference is that we were prepared to put more taxpayers’ money into it, and they were not.

Post Office

14. What the criteria are for awarding the contract to operate the successor to the Post Office card account; and if he will make a statement. (140304)

As I made clear in my written statement of 17 May, the new account will be available nationally, and eligibility for the new account will be on the same basis as for the Post Office card account.

May I suggest to the Minister that when the franchise for the new card account is let, he looks closely at the BBC’s experience of letting the franchise for the sale of television licences to PayPoint? That has left literally hundreds of constituents from the smaller islands in my community with no access to an over-the-counter service. Will he give me an undertaking that whatever form the new account takes, it will be accessible to all communities in the country?

Yes. As the hon. Gentleman will see from the written statement that I issued on 17 May, we have set out the criteria under which we have asked interested parties to submit an expression of interest. We made it clear that there must be national coverage, and that the account will have to be available in rural areas. That should reassure the hon. Gentleman that the facilities currently enjoyed by his constituents with card accounts will continue to be provided; in fact, there will be additional activity under the account provided by the successor account.

Will my hon. Friend ensure that there are sufficient security measures in place for the successor card account, so that we can prevent a type of fraud that I dealt with recently in a constituency case? A couple in my constituency in South Yorkshire were threatened with the loss of jobseeker’s allowance, housing benefit and other benefits because a couple in Canary Wharf were claiming funds using a Post Office card account that was opened with my constituents’ details. Will he ensure that extra security measures are brought in with the successor card account?

I am grateful to my hon. Friend for raising that point. Thankfully, generally speaking we have very few problems relating to fraud with the Post Office card account. From the sound of it, the case that he raised with me is more an issue of identity theft and of course, as he will be aware, the Government are taking many measures to try to bear down on that. The existing card account has been largely devoid of opportunities for fraud, and I am certain that we will carefully consider such issues when we award the contract for the successor product.

Child Support Agency

What assurances can the Minister give the House that when the new body—the child maintenance and enforcement commission—is operational, it will not repeat the mistakes of the past, in which hundreds of thousands of families were failed, and in which the parent with financial responsibility was often excluded and marginalised? Does he agree that families need fairness, but they also need fathers?

If the hon. Lady studies the report that Sir David Henshaw undertook for us and the subsequent White Paper that we issued on replacing the Child Support Agency with a new operation, she will see that we have addressed the very issues that she raises. I think that there is consensus across the House that the CSA’s performance was not up to standard, and I think there is acceptance that reforms that were introduced along the way, and which were designed to improve its performance, have not delivered the results that all of us in the House wanted. That is why we came to the view that there had to be a fresh start, and a different way of doing things and of offering a system of child maintenance. The scheme set out for the new commission is fundamentally different from that of the old CSA in many respects. The hon. Lady will see just how different the scheme is if she carefully studies the White Paper, the proposals and the Bill that is to be introduced shortly. The scheme holds out the prospect of the new body delivering the standard and quality of service to its clients that we hoped for, but never managed to achieve, under the CSA.

Pensions Reform

We have made significant progress on long-term reform of the pensions system, which began back in November 2002 with the establishment of the Pensions Commission. The Pensions Bill is now entering the Committee stage in the Lords, and last December we published our proposals to transform the culture of under-saving in the UK for millions of people by introducing personal accounts.

But does the Minister agree that, if pension reform is to be worth the name, there must be a strong restoration of confidence in the procedures to prevent people who have lost pensions from sustaining those losses? He referred to the Bill going through the Lords. Will he guarantee that if the Lords pass amendments on Wednesday that will ensure that those losses are made up, he and his fellow Ministers will not ensure that his hon. Friends are whipped into voting against those amendments and against their conscience?

Here comes the cavalry to rescue the Opposition Front-Bench team from not having managed to get a question out earlier. The Opposition’s protestations about a cross-party agreement behind their amendment are starting to fall apart. Did they see that my right hon. Friend the Member for Birkenhead (Mr. Field) wrote recently that the amendment is a dodgy amendment—

The hon. Gentleman obviously did not explain to him the implication of what he was saying, because my right hon. Friend the Member for Birkenhead is not in favour of using unclaimed pension funds to—

Order. We want to hear what the Minister has to say. The right hon. Member for Birkenhead (Mr. Field) can speak for himself.