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Work and Pensions

Volume 481: debated on Monday 20 October 2008

The Secretary of State was asked—

Labour Statistics

2. What assessment he has made of trends in the proportion of the labour force comprised of UK nationals. (227673)

The proportion of non-UK nationals in the labour force has increased as our economy has become more integrated into the European and world economies, but it is still low. Over nine out of 10 people in employment in the UK are UK nationals.

I am grateful to the Minister for that answer. This is a sensitive area, and I have consistently raised the need to train and employ more of the 5 million British people who are currently of working age but who are being paid not to work, while many foreign nationals hold jobs in the UK. May I congratulate the Government on planning to take much-needed action to help more British people to get jobs in our economy, and may I gently urge the Minister to get on with the job quickly?

With respect, we have been getting on with that job for some time now. Perhaps the hon. Gentleman is referring more directly to the other half of the equation—the introduction of the points-based system for immigration. That system was announced in 2005, before the last election, and it has been introduced in the speediest and most efficient manner possible.

Will my right hon. Friend welcome the presence of the great many Irish and American citizens who are non-British nationals? Will he also join me in deploring a leaflet that has been circulated in south Yorkshire that attacks as non-British a Danish lady who has been here for 24 years and is a Labour councillor? The leaflet was circulated not by the British National party or the United Kingdom Independence party, but by the Liberal Democrats. They should be ashamed of themselves.

Given my name and background, I of course welcome Irish non-nationals to economic activity and productivity in the United Kingdom’s labour market, as I do Americans and all others who contribute fairly. On my right hon. Friend’s second point, Liberal Democrats do not change, wherever they come from and wherever they are in the country.

Does the right hon. Gentleman acknowledge that there is a good deal still to be done in respect of training the United Kingdom work force? Does he agree that what we really need to do is cap the number of people who come here as immigrants in each year?

I certainly agree with the hon. Gentleman’s first point about training more UK nationals. That is perfectly fair. Central to the points-based system is a sector by sector assessment of exactly what the United Kingdom’s economy needs at any given time from those outside the European Union. We might approach this issue from different ways, but we achieve the same end.

Has the Minister had a chance to look at the figures that his own Department has just published on new national insurance numbers? Is he as concerned as I am that, in Newham—the centre for our great new Olympic village, with huge public funds that are supposed to lead to local jobs and training—more than 20,000 new national insurance numbers were issued to non-British workers? For London as a whole, the number of new numbers issued was three times the number of young people under 25 who are not working. When are the Government going to try to deliver on the Prime Minister’s promise of British jobs for British people?

My right hon. Friend’s point about Newham and, more broadly, about the London labour market belies his northern traditions, in the sense that the London labour market is absolutely distinct, compared with elsewhere in this country—quite rightly, given that it is the finest world city. On his broader point about the Olympic legacy for all people in London in relation to employment and to getting the right mix between the skills available and those requiring them, he is absolutely right. For a long time in the London market, there has been a mis-match between skills required and skills presented, particularly in an east-west dimension. Wearing my other hat, as Minister for London, I should be very happy to talk to my right hon. Friend about that.

I welcome the Minister to his first Work and Pensions questions in his new role. We hope that he enjoys it and that he manages to secure a promotion to full Cabinet rank in the not too distant future.

On 7 October, the Secretary of State said that the employment rate of 74.3 per. cent under this Government was

“the highest employment level that has ever been achieved in this country.”—[Official Report, 7 October 2008; Vol. 480, c. 205.]

He also said that 800,000 more British-born people were in work then than there were in 1997. Does the Minister still stand by those statements?

First, I thank the hon. Gentleman for his kind, but typically churlish, words. I look forward to working with him and hope that he retains his shadow Cabinet rank for a long time to come.

We stand by the figures, which are the highest ever. As I said in my earlier response, there has, of course, been a slight drop in the overall percentage of employment levels of UK nationals, reflecting the enlargement issues that we know plenty about. The figures are, however, still at record levels. As I have also said, more than nine out of 10 people employed in the UK labour market are UK nationals.

Ministers need to take a long, hard look at the figures they present to the House. According to the Library, the rate of employment under this Government has been lower than it was in the late ‘80s and lower than in the ‘70s. According to the Office for National Statistics, only 300,000 more British-born people are in work today than in 1997—not very impressive. Let me ask the Minister a different point. Why does he think that employment among British people has fallen by more 350,000 in the past two years, while employment among migrant workers has risen by nearly a million?

More recently, the rate of participation in the labour market by UK nationals has gone up. The figures were quoted by the hon. Member for Hertsmere (Mr. Clappison) in the weekend newspapers. I am looking to see precisely how the 365 and 865 figures were reached—the answer, from what I have seen this morning, is, not in the most direct route. It appears that the definition of working activity is being played around with, as is the definition of a UK national and a foreign national. That is how those figures are reached. When I am clear about the provenance of the figures, however, I will get back to the hon. Gentleman.

There is an ongoing issue in Milton Keynes about the ready availability of low-skilled jobs, which have attracted young people to leave school at the earliest opportunity to take them up. It is exactly those jobs that are first hit by the downturn in the economy. In that context, is not the route to success programme run by Milton Keynes college and aimed at this age group the right response to a recession—particularly the upskilling of young people so that they can take the jobs that are still available for which they were previously not qualified?

My hon. Friend is exactly right, and I will happily visit Milton Keynes to look in more detail at what the college is trying to do. It must be right for the 16 to 19 cohort to be provided with as much opportunity as possible to get the upskilling—a dreadful word, but it will do—necessary to face whatever challenges the labour market poses in the future.

Benefit Payments

3. If he will commission research on the effect on benefit payments of provision to patients with rheumatoid arthritis of treatment that enables them to continue in or return to work. (227674)

Although we have no plans for specific research on people with arthritis, the Department of Health and the Medical Research Council carry out a range of research projects concerned with arthritis and other rheumatic disease, and I will work closely with my ministerial colleagues on the work and health agenda.

Is the Minister aware of a recent report finding that diseases such as rheumatoid arthritis are responsible for the loss of 9.5 million working days a year, at a cost to society of more than £7 billion? Has the Minister or his Department had a conversation with the National Institute for Health and Clinical Excellence to help ensure that the broad costs to society are looked at and that those suffering from this terrible disease are given the necessary drugs and treatment at an early stage so they can carry on working and living normal lives?

I am grateful to my hon. Friend for that question. I am sure that she will be aware that Arthritis Care presented a report to MPs in Westminster just a few weeks ago, which expressed concern about people with arthritis—both those in work and those looking for employment. We have, of course, doubled Access to Work, which could be of assistance to that group of people and we have also invested £1.1 billion in pathways to work to assist disabled people to find work. I am certainly happy to discuss this issue and the report I mentioned from Arthritis Care to find other ways to assist these people either to stay in work or to find work.

Rheumatoid arthritis particularly affects people in the workplace. Many people with RA wish to continue normal work, but barriers often prevent them from working as normal. Can the Minister commit to using private and voluntary sector back-to-work programmes in addition to Government ones?

I can certainly commit to ensuring that a range of providers, in the public, private or voluntary sector, operate in the pathways to work programme. It is important to have systems in place to allow entrepreneurs, particularly those in the smaller niche charities, to deal with individuals’ specific concerns and conditions so that we can meet our target of taking 1 million people off incapacity benefit.


The jobseeker’s allowance count rose last month to 939,900. There are 608,000 vacancies in the economy and 80 per cent. of claimants leave jobseeker’s allowance within six months. We do not predict future levels of unemployment, but we have been planning for the impact of higher levels of jobseeker’s allowance claims in the coming months.

As I understand it, the rise in unemployment announced last month was the biggest in a decade, or two decades. To link my question with Question 2, there is some confusion about what the immigration Minister last week on reducing the number of immigrants because of employment problems. To return to that question, which the Secretary of State’s colleague failed to answer, could the right hon. Gentleman give an update on the Prime Minister’s policy of British jobs for British workers?

We absolutely want to train workers so that they can get jobs, improve their skills and get more money through employment. About half of the increase in employment has gone to UK nationals. We have a flexible labour market, which is important for the UK. I did not realise that the Opposition were against the idea of a flexible labour market.

This morning I was informed by Network Rail that trying to rush forward the £500 million upgrade of Reading station in my constituency would be problematic. It could lead to poor planning and mistakes, and it would make little short-term difference to unemployment. Does the Secretary of State agree that trying to bring forward big capital projects such as the one at Reading station is not the answer to unemployment, and that continuing a policy of reckless spending will do damage to unemployment?

The hon. Gentleman is welcome to campaign against investment in his constituency if he wants to. All I can say is that it is a very odd approach.

Does my right hon. Friend agree that one of the worst experiences our constituents can suffer is to be denied employment? Is it not essential that every help and assistance is given to them, unlike what occurred in the ’80s and much of the ’90s? A public work programme, which the Government are encouraging, is essential to help people to avoid the poverty and destitution that so often come with unemployment.

My hon. Friend is right. We need to help people to find work if they do lose their job. We are not talking about a statistic, but someone’s life, which is why there are more than 1 million visits to our website every day, and why we take more than 70,000 calls and have more than 45,000 interviews to help people to get back into work. There is excellent support for people who need child care, and help for people who need a suit for an interview and advice on interview techniques. We will continue to do those things. The Opposition abandoned people during a downturn; we will protect them, and prepare them for the upturn.

The Secretary of State will know that the parliamentary group on the Public and Commercial Services Union, which I chair, has expressed its concern about job cuts in the Department for Work and Pensions. There have been 30,000 already and another 12,000 planned, with 2,000 jobcentres potentially at risk. May I ask the Secretary of State to consider a moratorium on those job cuts, and to review the future job strategy in the Department? Many of us fear that the rise in unemployment will overwhelm the service if he does not address the issue.

I hope that my hon. Friend will agree that we will do better than that. We are taking on an extra 2,000 people to introduce the employment and support allowance, and we will keep them on to help with job claims, so we are responding to that. We have been planning for a while to ensure that we can cope with the higher inflow level, and it is also important that we have an efficient system. We have moved people from dealing with paper-based systems in back rooms to helping people with claimants in front rooms, making sure that we have more investment in the front line. That is why we process claims much quicker than we used to—people get an appointment within three days.

We need to continue to improve the efficiency of the system, which is why, for example, we announced last week that people throughout the country can claim their benefits, tax credits and housing benefits at Jobcentre Plus in one visit, instead of having 28 previous contacts, as before. That is a more efficient system, and one that is better for claimants.

As the Minister will know, the media recently reported that as we head into a recession welfare-to-work contracts are becoming less attractive to potential bidders and therefore potentially more expensive to the Department. Meanwhile, the flexible new deal will become increasingly important as more people are out of work for longer. What is being done to ensure that bidders for the flexible new deal have accurate information about the number of people whom the Department considers can be helped back into work during a recession, and that funding structures deliver support where it is really needed, helping those who are furthest from the job market to return to work—which they will find particularly tough at a time when unemployment is rising?

The hon. Lady will be glad to learn that we met the potential bidders recently and discussed precisely that issue. It is important to note that they are bidding for five-year contracts, which will extend over an economic cycle. It is up to them to decide what proposals to submit and the levels at which they bid. However, the fundamental point is that we are spending £500 million more on this than we were in 1997, when the JSA count was 1.6 million compared to the present figure of just over 900,000. That means that more help is being invested per person than in 1997.

I thank God that this party is in government, rather than our opponents. Many of us will remember what the position was like in the 1970s, when whole communities were decimated and there was no help for the unemployed.

I congratulate my right hon. Friend on the incentives he is providing to ensure that when people are made unemployed, there is a route for them to take. Will he now confirm his commitment to the Train to Gain programme, and to the other programmes that are desperately needed by people who lose their jobs? Unlike the past—

My hon. Friend is absolutely right. We are increasing the protection that we are providing. We are giving people more and earlier help with their mortgage costs, and, if other parties in the House are happy to co-operate, we shall want to make the changes in January. That would mean shortening the consultation procedure by a certain amount, but if people consider such action right at a time of financial turbulence, we propose to take it.

We want to give people more help in redundancy by providing better training for them. That is why we announced another £100 million to help people to return to work. We will not repeat the mistake of the 1980s by abandoning people, fiddling the figures and leaving them on benefits and without support.

One of the early and most obvious indicators of a slowdown is the state of the building industry. My constituency lost 50 jobs recently at Rehau Ltd, which makes unplasticised polyvinyl chloride goods for the building industry. We have also lost a firm called Action Makers, who are steel erectors. May I urge the Secretary of State to liaise closely with his Cabinet colleagues, and introduce measures to kick-start the building industry in both the public and the private sector?

The hon. Gentleman is welcome to do that—and, indeed, we are taking such action already. The authorities have introduced a programme very similar to ours to help those who will be made redundant. It is a very good programme, helping people to retrain and return to work quickly. Hon. Members can also play a part in ensuring that if there are redundancies and Jobcentre Plus does not offer help immediately, they can do so. We have organised a very good system involving a rapid reaction force which helps people even before they fall out of work, and which provides a role for all hon. Members.

If the labour market does become still more competitive, will my right hon. Friend look closely at the needs of people with disabilities who want to enter it? We must maintain our core principles of equality in the labour market, and never use people with disabilities as a statistical convenience to reduce the employment figures.

My hon. Friend is absolutely right. There are 600,000 vacancies in the economy. It is important for us to help people who have just lost their jobs to get back into work, but also to help people who have been out of work for longer than that, and people with disabilities. My hon. Friend will be pleased to learn that for that reason we are doubling the budget for Access to Work, which pays the extra costs of employing someone who is disabled.

First, may I make it clear that we share the concern that has been expressed in all parts of the House about the rise in unemployment, and that we want appropriate help to be brought as quickly as possible to the newly unemployed? To return, however, to the contribution of the Minister for immigration on this subject just last week, and the connection he chose to make, in his own way, between unemployment and immigration, will the Secretary of State simply tell us whether there is any change in Government policy in this regard? A yes or no answer would be helpful.

As the hon. Gentleman knows, we have been developing the points system since the last election. It will help to make sure that vacancies that can be filled from the UK labour market are filled from it. It is important that we help people to get back into work. That is why the Train to Gain budget and the flexible new deal matter, and that is what we are focusing on.

Benefit Payments

6. How many people with HIV have had their (a) disability living allowance and (b) incapacity benefit reduced or withdrawn in the last 12 months. (227677)

The figures my hon. Friend asks for are not available in that form. However, he may know that we have been conducting a review of disability living allowance cases where the recipient has been in receipt of the benefit for three years or more and was qualified as being terminally ill. That includes some cases where the recipient has HIV/AIDS. As a result of that exercise, I can tell the House that up to the end of September, 1,040 people have had their benefit maintained or increased, 730 people saw their benefit reduced and 510 had it stopped, although these figures are likely to change as a result of any appeal or dispute.

I congratulate my hon. Friend on his meteoric rise from having expertise on the Norfolk broads to his work and pensions brief; it is truly awesome. HIV infection leads to a fluctuating health condition for many people in that they can be assessed one week as healthy or otherwise, and the next week as quite the opposite. Will my hon. Friend’s new disability living allowance assessment procedures allow for such flexibility, so that we can have an assurance that the fear many people feel can be dismissed?

I am grateful to my hon. Friend for bringing this matter to the attention of the House. He will know that in special rules cases where someone is terminally ill, we ensure that decisions on disability living allowance are given within days rather than weeks. That is for the obvious reason that when someone receives disability living allowance in such circumstances, they are terminally ill. We are reviewing the situation for when people have been in receipt of it for longer than three years, however. The point my hon. Friend makes about fluctuating conditions and diseases such as HIV and AIDS is right. That is why we have consulted with HIV specialists and we are working in partnership with organisations such as the Terrence Higgins Trust, ensuring that our decision makers are fully aware of all the points my hon. Friend has made.

Given the depth of stigma that is still associated with HIV, and in particular the effect it has on an individual’s ability to work, will personal advisers under the new employment support scheme undergo any HIV-specific training for the job?

I am grateful to my hon. Friend for that question. Under the new employment support allowance, it is essential that staff have training in a wide range of conditions so that they can assist people back into work. We are certainly aware of that issue. On the wider point about disability living allowance, I am sure my hon. Friend will agree that it is right for us to look at those in receipt of the special award that is implemented at the point when someone is diagnosed as terminally ill. We want to assist people when they have been diagnosed with that condition—we want to assist people with that condition so that they can work and get into work. My hon. Friend is also right to raise the issue of stigma; we need to continue to tackle that as well.

On the question of stigma and people with HIV, surveys show that 44 per cent. of the population would expect to be told if they were working with a colleague who was HIV-positive. Does my hon. Friend recognise that, in finding jobs for people who are HIV-positive, there is a stigma in the work place and it is not just a matter of them wanting a job, but it is also a matter of the employer being prepared to take them on? Under this new scheme, the Minister and his departmental colleagues need to be aware of that.

Many people in society are affected by prejudice and by preconceived ideas about what they are rather than what they can do—disabled people, those with HIV/AIDS or those with a whole range of other conditions. We as a House, as Members of Parliament and as a Government need to ensure that we tackle those preconceived ideas and prejudices to ensure that employers up and down the land appreciate people for what they can do, not what condition they have.

Child Poverty

7. What recent assessment he has made of the likelihood of meeting the Government’s 2010 child poverty target. (227678)

11. What recent assessment he has made of the likelihood of meeting the Government’s 2010 child poverty target. (227682)

We are determined to eradicate child poverty in this country. The Prime Minister announced in September that we will enshrine in legislation our commitment to eradicate child poverty by 2020. Of course, 600,000 children have already been lifted out of relative poverty compared with 1997, and a further 500,000 will be lifted out of relative poverty as a result of policies already agreed and in the process of being implemented. We will continue to do everything we can to support low-income families with children.

On 4 October, thousands of people filled Trafalgar square to urge the Government to keep their promises on child poverty. Given that more than half the children in poverty are in working families, does the Minister agree that the sanctioning regime needs to be properly monitored to ensure that it does not just move families from out-of-work poverty to in-work poverty?

The hon. Gentleman is right to mention the end child poverty campaign. I think that about 10,000 people attended the rally at the beginning of this month, and a further 50 attended the parliamentary reception only last week. I wish to pay tribute to that coalition for the effective campaign it is mounting.

The hon. Gentleman is, of course, right that part of the solution in our commitment to eradicate child poverty is to encourage parents who are able to work to enter the work market, and then to ensure that they can progress to the good jobs that are the only sustainable way of lifting children out of poverty permanently. To that end, I am sure that he will be delighted that the three children’s centres in Kettering are already reaching more than 3,000 children. The new centres that are planned at Meadowside infants school and Rothwell Victoria will respectively reach a further 714 and 917 children in his constituency.

The Government measure relative poverty, which effectively means that the only way to reduce child poverty is to increase pensioner poverty. Would it not make sense to recalibrate the system to measure actual poverty—the ability to buy food, housing, clothing and so on—rather than relative figures that are somewhat difficult to understand?

We have set ourselves the most challenging target, recognising the importance of our work in this area. I do not agree in the slightest with the hon. Gentleman that the only way to meet our child poverty target is to increase pensioner poverty. Rather, we intend that someone will be no more likely to be in poverty simply because they are a child. It is completely unfair that people in this country should be disadvantaged due to factors entirely outside their control, and that applies to no one more than it does to children.

I welcome my hon. Friend to what I believe is her first Question Time on her new brief. I appreciate the fact that she is continuing the work on child poverty. On that subject, are the Government still on track with the changes in housing benefit and council tax benefit that will come in next year and lift many more children out of poverty?

I am grateful to my hon. Friend for her kind remarks and pay tribute to her for the long-standing reputation that she has established for herself in this field. The answer to her question is simply yes.

Does the Minister consider one of the weaknesses in the Government’s approach to be the division between three Departments—the Treasury, the Department for Children, Schools and Families and the Department for Work and Pensions? Given her recent Treasury experience of problems in the tripartite regime, will she consider reforming the way in which the Government deal with child poverty?

I will put to one side the hon. Gentleman’s cheeky remarks on the tripartite regime, with which I do not agree. I simply say that it was precisely the cross-governmental importance of this issue that led to the Prime Minister establishing the child poverty unit, which reports equally to all three Departments.

I, too, welcome the hon. Lady to her post. I would like to draw her back to the question, because she was asked what assessment the Government had made on whether they would hit the 2010 child poverty target and she was careful not to answer. Given that that date is only two years away, could she give us a clear answer from the Dispatch Box as to whether the Government will or will not hit that 2010 target—yes or no?

As I said, we will do everything in our power to meet our targets that have been laid out. We have made significant progress by lifting 600,000 children out of relative poverty, and a further 500,000 are due to be lifted out of it as a result of policies that have already been announced and are in the process of being implemented. We will continue to do everything that we can to eradicate child poverty. I would be interested to know whether the hon. Gentleman shares the target, because that has not been entirely clear from what we have heard so far.

Post Office Card Account

8. When he plans to make an announcement on the outcome of the bidding process to operate the Post Office card account. (227679)

9. When he expects to announce the successful bidder for the contract to provide the Post Office card account. (227680)

This is a commercial tendering process, bound by UK and European law, and we will announce the outcome when that is completed.

Given that 60 per cent. of rural communities have a post office but only 4 per cent. of them have a bank, what assurances can the Secretary of State give the 6,500 Post Office card account holders in Westmorland and Lonsdale that they will be able to have easy access to their money and benefits under the card system replacing POCA?

As the hon. Gentleman knows, the tendering process involves access criteria, which bidders must meet. He will understand that I am limited in what I can say on that procurement process, because it is ongoing. I am sure that he welcomes the £1.7 billion that the Government are investing and the access criteria that have been put in place for post offices for the first time.

In May 2007, the then Under-Secretary, the hon. Member for Warwick and Leamington (Mr. Plaskitt), announced to the House that a decision on the Post Office card account successor contract would be taken in early 2008, yet that decision has still to be taken. The continuing doubt and uncertainty is damaging what remains of the post office network and is causing great concern to the 4.3 million POCA users. Recent press speculation says that the decision is being deliberately delayed again because of the Glenrothes by-election. Will the Secretary of State tell the House precisely when this long-awaited and crucial decision will be announced?

I assure the hon. Gentleman that the press speculation is not accurate. We will announce the decision when it has been taken, but I am sure that he understands that it is important to take it on the basis of proper procurement practices—that is the right thing to do.

I hear what my right hon. Friend says, but psychological damage is being done to the network, and postmasters and postmistresses wish to have clarity. Does he accept that Labour Members, too, feel that the earlier this decision can be taken, the better? As far as we are concerned, only one decision can be taken.

I am going to start to sound like a broken record. I am sure that my hon. Friend would like me to obey procurement processes in the right way. I totally understand the importance of the post office network for our communities, and that is why we are taking this decision in a careful and planned way.

Before the House sat again, I took a petition and a large number of campaign cards urging that the Post Office retained the Post Office card account. I did so largely because people in Brackla, in my constituency, were very concerned that they would not be able easily to access their benefits. Will my right hon. Friend assure me that people’s ability to access their benefits will be taken into consideration when viability is examined and the POCA contract is awarded?

This Department needs to play its role, as do all Departments, in sustaining, rather than undermining, the post office network. To that end, will the Secretary of State assure the House that the Post Office card account will not be the last option offered to new pensioners, but that it will be offered on an equal basis? Will he consider paying housing benefit and local housing allowance on the POCA? Will he also ensure that our constituents can pay their utility bills by direct debit on the POCA to save them money?

Of course they can do that already from the post office through the 27 accounts that are available. It is important that people have access to direct debits to reduce the cost of their bills. I can assure him that we understand the importance of the post office network. Ensuring that people can access their benefits and their money has been one of the key criteria during the whole tendering process.

Four million people access pensions and benefits through the Post Office card account. It is not surprising that 3 million postcards have flooded in to protest about the problems that exist. Some 3,000 post offices are apparently at risk. When the Secretary of State reviewed the file on taking up his present post, did he look at the rationale for the original decision to see whether proper account had been taken of the social and political impact of the re-letting of the contract which would seem to outweigh any other reason in the decision that successive Ministers have refused to take—to declare that POCA should go to the Post Office?

I shall not give a running commentary on what was done at various stages. I am sure that my hon. Friend would want me to act legally. As I have now said many times, we will make the announcement when the decision has been properly taken.

Several of the small islands in my constituency have a post office, but no bank. Will the Secretary of State assure the House that pensioners on those islands will be able to collect their pension at the post office without having to open a bank account?

That is why, in response to the hon. Member for Cheadle (Mark Hunter), I said that access criteria had been built into the tendering process. Once we have made the decision, we will announce it.

Distress Cases

10. What steps he is taking to co-ordinate the work of local jobcentres, the social fund and Jobcentre Plus to deal promptly with distress cases. (227681)

Jobcentre Plus is well placed to deal with the current period of rising unemployment. It is able to manage current volumes and has put in place plans to function effectively if numbers increase further across all benefits including the social fund. Local jobcentres will continue to give people the support they need to move from benefits and into work.

With growing numbers in a distressed situation because of joblessness, what can the Minister’s Department do to improve the service currently given to people who are being refused face-to-face interviews, are told to use a helpline that never answers or is permanently engaged, and is at best highly impersonal and unco-ordinated? How can that situation be improved?

As I have already said, we have measures in place to ensure that we are able to cope with any increased demand. I might hint that the hon. Gentleman’s experience, as he relates it, does not fit with the experiences that my constituents report to me. He has talked of times of crisis: at the moment, urgent inquiries for living expenses, when people face particular difficulties and whether or not they have recently lost their job, are processed on average in 1.7 days. I would be interested to know how he thinks that we could improve that.

The experience of my constituents certainly reflects that of the constituents of the hon. Member for Twickenham (Dr. Cable). The Minister will be aware that rural areas such as the Vale of York do not have jobcentres. Will she therefore ensure that those jobcentres that serve the Vale of York make themselves accessible, possibly by sending staff to meet those constituents who have no work and no transport?

We are happy to look into specific circumstances. The most important thing is the service that we provide. Jobcentre Plus has a good record in assembling the teams that are required to ensure that people receive the service they need, regardless of the surrounding circumstances. I would be happy to consider the situation in the hon. Lady’s constituency if she would like me to do so.


As my right hon. Friend the Secretary of State said earlier, the jobseeker’s allowance count rose last month to 939,900. There are 608,000 vacancies in the economy and 80 per cent. of claimants leave jobseeker’s allowance within six months.

Although we do not predict future levels of employment, we have been planning, quite properly, for the impact of higher levels of jobseeker’s allowance claims in the coming months.

The latest Office for National Statistics figures reveal that the number of Welsh 16 to 17-year-olds who are economically inactive rose by 12,000 in the period between June 2007 and 2008, which equates to an increase of 32 per cent. Does the Minister accept that that is an alarming upward trajectory? What does he think that his Government can do to halt that steep increase?

I thank the hon. Gentleman for his question. It might be that he was showing guarded and rather contorted support for all young people staying on in full-time education until they were 18—I would welcome that. Jobcentre Plus, in Wales and elsewhere, stands ready to help all people, throughout all age cohorts in the labour market, to get into the job market at the earliest opportunity. That includes the very youngest. However, it must be right that the most appropriate way to do so is to get them the skills and training that they need through to and beyond the age of 18.

Topical Questions

In April of this year we introduced the local housing allowance, a more straightforward and transparent way of calculating entitlement to housing benefit in the private rental sector. However, an unintended consequence of the changes meant that in a limited number of cases the taxpayer paid out significant sums to private landlords to house people in the sorts of property that they could not afford if they were in work. That was clearly unacceptable and I ordered an urgent inquiry into the local housing allowance rates for properties with more than five bedrooms.

Today, I can announce that LHA rates will be capped at the five-bedroom rate for all new customers. We will lay regulations as soon as possible, to come into effect no later than next April. In the interim, DWP and the Rent Service will monitor such applications carefully and advise on a case-by-case basis. Those currently claiming LHA above the capped rate for a property with more than five bedrooms will have their case reviewed on the first anniversary of their claim. This announcement fits with the wider DWP and Treasury review of housing benefit, which is currently under way. A key outcome of the review will be to ensure fairness for the taxpayer and to ensure that housing benefit provides the right incentives to work.

The Secretary of State will be aware that earlier this year Dame Carol Black published a report entitled “Working for a healthier tomorrow”, which highlighted the fact that sickness accounts for a cost to our economy of up to £1 billion. However, in these economically turbulent times the Government have so far failed to acknowledge the report or to give a proper response. Will the Secretary of State undertake to do so with immediate effect?

The hon. Gentleman needs to get his facts right, I am afraid. We have welcomed the report, attended the launch and are working on our response. We have announced, for example, that we will be replacing the sick note with a fit note and that we will be pursuing “fit for work” pilots. I refer him to the welfare reform Green Paper.

T2. From this autumn, lone parents whose children are of secondary school age will be moved from income support to jobseeker’s allowance. That change will affect existing claimants next April. Will the Secretary of State reassure the House and my constituent, Mr. Bennett, who has calculated that that change, because of changed links to housing costs, will mean that he will be at least £50 a month worse off? Is that an unforeseen consequence, or are his figures incorrect? (227698)

I cannot comment on the individual case, although I am quite happy to look at it for my hon. Friend. I am sure that he will welcome the increased support that we are giving people, such as the fact that they will have an in-work credit of £40 a week, better help with transition costs and in and out-of-work advice. We know that that support works. We believe that ensuring that more people take up work will lift 70,000 children out of poverty. I am sure that my hon. Friend would welcome that.

T3. Given the effect of economic turbulence on the value of pension funds, will the Government consider suspending the present rules, which force people to lock themselves into long-term pension arrangements on their retirement age or on the occasion of their 75th birthday? (227699)

I am sure that the hon. Gentleman will know that that subject will be debated during proceedings on the Pensions Bill in the other place. Obviously, it is ultimately a matter for Treasury policy, but we should be clear that the vast majority of people buy annuities well before the age of 75. Only about 5 per cent. delay until after that age, and they tend to be the wealthier pensioners. The proposal put down by the Opposition for a temporary suspension has been greeted with some dismay by many in the industry, who feel that it is unworkable. Annuity rates are at a six-year high, and obviously as people get older and move towards the 75 age limit their funds will be moved into more secure funding, such as Government bonds and gilts. Although obviously this is an idea that has been considered—

Order. I remind the right hon. Lady that we are on topical questions so I expect quick and sharp replies.

T4. I greatly welcome the £100 million boost that the DWP, with skills Ministers, is providing for reskilling and retraining people who have lost their jobs, but I press the Minister to say that those who have worked in small and medium-sized businesses and those who are self-employed should also benefit strongly from that money. My Blackpool constituency is very dependent on such businesses, as are many seaside and coastal towns. It is important that people who lose their jobs there, such as the 30 people who only today lost their jobs in a manufacturing company in my constituency, are given proper and strong support. (227700)

I thank my hon. Friend for his welcome for the fund which, as he knows, is on top of a range of other support mechanisms for those facing redundancy. We are working through the detail of the mechanisms for the £100 million, and looking at what we can do through other programmes to address precisely his issue about other sectors and I shall be happy to talk to him about that subsequently.

T5. Will the Minister look at a specific anomaly in respect of the Child Support Agency, whereby if somebody has a company car, it is disregarded as income when calculating maintenance payments, but if the same person is given an allowance from his company to purchase a car for the same purpose, it is regarded as income, and maintenance for the child or children is enhanced accordingly? Surely, they should be the same. (227701)

T6. Further to the Minister’s very disappointing reply to the question asked by the hon. Member for Southend, West (Mr. Amess), I stress that I have been contacted—as I am sure have many Members—by constituents, particularly those aged 74, who have seen huge falls in their pension funds, yet the Government’s response is simply to say that the issue is being looked into, when day by day, people see the future value of their pension savings being wiped out. I agree that a temporary measure is not acceptable, but will the Minister tell us that the Government are seriously looking at permanently scrapping that inflexible rule, which penalises people who have saved all their lives through their hard work? (227702)

As people move towards the age of 75, their funds will be moved into more secure funding streams anyway. That is why the proposal to move further will not solve the problems of the majority of pensioners. It is a short-term measure, aimed at a few people who, as I said, tend to have been able to delay taking an annuity until 75. Other options are still open to people at that age, such as alternatively secured pensions.

Can my right hon. Friend the Secretary of State look at what seems to be the Child Support Agency’s approach of making people with arrears repay them over one or two years? Whatever the rights or wrongs of their being in arrears that means that they have to pay large amounts of money, which tips them and their new families into real hardship.

The No. 1 priority of the Child Support Agency and its successor body has to be to contribute towards alleviating child poverty and I am sure my hon. Friend agrees. In some circumstances, flexibility can be shown about the rate of time over which arrears can be paid and if she has specific examples where she feels that is not working, we shall of course be happy to look into them.

T7. After the Government’s welcome announcement last week on the 13-week period for mortgage payments, is the Minister aware that many moneylenders are taking people to court for eight weeks’ arrears, and even less? Will she explain how the Government will properly co-ordinate their approach to mortgage repossessions and arrears, so that the most ruthless members of the mortgage-lending community do not take advantage of the taxpayer? (227703)

Both our Department and colleagues in the Treasury, working with the Council of Mortgage Lenders and other lending bodies, have made it entirely clear that in these times we expect lenders to use repossession as an absolute last resort. The hon. Gentleman will be aware of recent statements to that effect, following the emergency measures that my right hon. Friend the Chancellor took to inject more capital into the banks. Suffice it to say that it is very important, at this time, that all families and others realise the punitive interest rates that some people knocking on their doors can offer. I urge them to seek affordable credit, if it is indeed credit that they require.

May I welcome my right hon. and hon. Friends to their new roles? I recently met my constituent, Katy Watt, who has returned after spending four years as a youth worker on the Isle of Man. She put the entire proceeds of the sale of her home into the collapsed Icelandic bank, Kaupthing Singer & Friedlander. I have advised her to claim pension credit, but I wondered whether Ministers could give my constituent and me advice on whether the notional sum tied up in the bank counts as savings towards her entitlement to pension credit. If they have not done so, will they issue guidance on the subject as soon as possible?

I am very happy to do that, and for my hon. Friend to meet someone from the local service. As she knows, they regularly visit pensioners who claim pension credit, and they will answer her question in a precise way.

Does the Secretary of State accept that those of us who support the exceptional measures that the Government have taken in recent days would think it entirely perverse if he were to sign the death warrant of 3,000 post offices?

We will make an announcement on that in due course; the hon. Gentleman may have heard me bore on about that earlier in Question Time. We completely recognise the importance of the post office network for communities around the country, and that is why we will take the decision carefully and properly.

I return to the subject of housing benefit. What does the Secretary of State have to say to the 800 people in my constituency whose housing benefit is being cut, or is threatened with being cut, because of the new absurd way in which the broad market rental areas are being calculated? I understand that he has already undertaken to review the policy, but in light of its illegality, as declared by the House of Lords, will he make sure that all those people who have wrongfully lost out will be fully compensated when the policy changes, as it must?

The hon. Gentleman rightly raises the issue of the impact of what I think is known as the Heffernan case judgment in the House of Lords. We are urgently considering it as part of our internal housing benefit review.

T9. In recent years, the Government have made drastic cuts to the number of people employed in jobcentres in Argyll and Bute. With unemployment rising everywhere, how will those jobcentres cope with the extra numbers of people who will seek advice on finding work? That could become a particular problem in Campbeltown, where more than 100 extra people may be visiting the jobcentre soon if the threatened closure of Vestas goes ahead. What support will the Government make available? (227705)

The hon. Gentleman must accept that the Jobcentre Plus network is now far better placed for any slow-down than it was. When it comes to employment, in the Department for Work and Pensions and the Jobcentre Plus network there is a shift to the front line to help the people whom he describes.

According to figures released by the House of Commons Library, unemployment in my constituency was up 17 per cent. in the year to July 2008. Does the Minister agree that perhaps the time has come for the local economy, rather than the Stalinist housing targets imposed from Whitehall, to be the driver of the expansion of Milton Keynes?

I do not accept the point about Stalinist housing targets. There has been a lot of consultation on those targets across the growth area. The hon. Gentleman would do well to understand that Milton Keynes has a lot to offer, in terms of growth for the entire east midlands area. I am not sure whether he should knock that in the way that he does.

After 11 years of a Labour Government, can the Secretary of State explain why there are more people unemployed in Wellingborough now than there were in 1997?

I am pretty sure the rate has fallen in the hon. Gentleman’s area. There are 3 million people more in work than there were in 1997. We have reduced the number of people on jobseeker’s allowance from 1.6 million to 900,000. That is in clear contrast to unemployment reaching 3 million under the Government whom he supported.

May I refer the Secretary of State back to the Post Office card account? Surely a time of banking crisis, when more and more of our constituents are looking to safe deposits and the Post Office and National Savings, is not the time to threaten the future of the Post Office card account. Will he give a better answer than he gave earlier?

I am sorry if the hon. Gentleman did not like the answer I gave earlier. I recognise that it was not a very interesting answer, but it is right that we should take the decision properly, with due process, and we will announce it to him and everyone else at the right time.