If he will make a statement on planned improvements to child benefit and its delivery. [89700]

This Government have shown their commitment to universal child benefit as the foundation of their support for children, with record increases and child benefit for the first child up by £4.70 a week-a 25 per cent. real-terms increase. From April, the Child Benefit Agency will transfer to the Inland Revenue, so families will receive Government financial support for their children from a single Department.

Bearing in mind that hundreds and thousands of mothers who are currently recipients of child benefit will also be beneficiaries of the new child tax credit, is it not possible that all the money could be paid in one lump sum through the payroll taxation system? Will not many people who currently receive child benefit be confused by the similar names of the benefits and not understand what they will soon be entitled to receive through the child tax credit?

I take my hon. Friend's point, but I would have thought that most parents, and mothers in particular, would like to know what they are getting in child benefit as well as what they are getting in child tax credit. The key issue is how much better off they will be as a consequence both of the increase in child benefits and the introduction of the new child tax credit.

I acknowledge that the Government have done much to increase the volumes of money that are paid through child benefit, which is welcome. The Secretary of State mentioned that a major transformation is coming in April, when the child benefit centre goes to the Inland Revenue. Is he not concerned that the decision-making report that he made to the House last July indicated that some 57 per cent. of child benefit calculations for decisions against which appeals could be made were accurate? That means that 43 per cent. were inaccurate. Surely, that needs to be sorted out before the transfer is effected in April.

I share the hon. Gentleman's concerns about that issue and note his comments. Work is being undertaken by the Child Benefit Agency specifically to improve its performance. I am pleased to say that its performance has been improving in many respects and I am confident that it is well placed to make the transfer to the Inland Revenue satisfactorily.

What proportion of pensioners are eligible for means-tested benefits. [89701]

Good afternoon, Mr. Speaker.

The Chancellor of the Exchequer once memorably told the Labour party conference that he wanted to end the scourge, as he called it, of means-testing pensioners. Of course, this Government have done exactly the opposite, and by April about 60 per cent. of pensioners will be means-tested. Has the situation developed to such an extent, undermining people's independence, as a result of a sequence of incompetences and serious blunders, or, as I suspect, because of a cynical and deliberate intention by this socialist Government to undermine people's independence and increase their dependency?

Christmas has come early; that is a second present for me. The hon. Gentleman accused me of being a socialist. I plead guilty.

The Secretary of State is on record as describing the pension system as an incomprehensible maze. Does my right hon. Friend accept that part of the incomprehensibility is due to the increase in means-testing in the system for helping pensioners, and that the Green Paper deals with the complexity of only the private pension scheme? As one socialist to another, I ask him whether the Government will examine more closely the relationship between private pensions and the basic and secondary systems that the state provides to simplify that incomprehensible maze.

I thank my hon. Friend for her question. In the Green Paper and through modernising the public pension system, the Government are simplifying the system. The amount of money that we spend on pensioners' income, not bureaucracy, is growing. The pension credit alone means an additional £2 billion a year to tackle pensioner poverty. I make no apology for doing that.

In order to evaluate the Government's strategy of mass means-testing for pensioners, we need information on the number of pensioners who are entitled to means-tested benefits but do not claim them. The last figures show that hundreds of thousands of the poorest pensioners were missing out, but they relate to the previous century. When will we get figures for this century? Is the delay due to incompetence or a more sinister reason?

In this House, the hon. Gentleman has from time to time tried to put pensioners off claiming their entitlements, whether the minimum income guarantee, winter fuel payments or t he pension credit. Instead of dancing on a pinhead about uptake, he should say whether Liberal Democrats support the introduction of the pension credit, which means an extra £2 billion a year for pensioners. He can either support that or continue his campaign of denigration and put pensioners off claiming their rights.

There can be no doubt that pensioners are better off under the Labour Government than under the Conservative Government. Indeed, the Conservative Government broke the link between pensions and earnings. However, does my right hon. Friend agree that the next logical step forward to overcome the problems of means-testing and take-up is converting the minimum income guarantee into the state pension? That would automatically link pensions with earnings again and overcome the problems of means-testing.

My hon. Friend's proposal would mean an additional £10 a week for all pensioners, but a reduction of £17 a week for the poorest pensioners. We want real distribution of resources, which means tackling poverty. If we want to do that, we must put our resources where they are required for pensioners who do not get a decent income.

Does the Minister accept that if he does not do what the hon. Member for Luton, North (Mr. Hopkins) suggested, the minimum income guarantee and pension credit will act as a serious disincentive to save for those who are on average and lower incomes? Will not that ultimately mean more rather than less means-testing under the Government?

This is the first time in history that a Government are rewarding savings through the pension credit. The Conservative party opposes the minimum income guarantee and winter fuel payments and wants to privatise the basic state pension. That lies behind the right hon. Gentleman's question. It is time that Conservative Members told the British public what they are up to with pensions. While the right hon. Gentleman tries to hide that, we shall get on with eradicating pensioner poverty.

Does my right hon. Friend remember that however cold the winter months became before 1997, pensioners did not receive a penny, and that since we have been in office, the £200 per pensioner household has been a good socialist move? Why did not the Tories do that? Why were they so mean that they deprived pensioners? [Interruption.]

Order. The Minister does not need to answer that.

When the Chancellor spoke of getting rid of means-testing, did he mean, as the Minister suggested, simply renaming it as "targeting"? Is not it time that the Government accepted that they have increased the number of people who do not claim the benefits to which they are entitled? Millions of people live on 30 per cent. less than what the Government consider appropriate. It is estimated that 1 million people will not claim the pension credit, even by 2006, according to the Government's figures. All those involved with pensions are devising proposals to restructure the basic pension system so that people receive a larger state pension, yet the Government complacently sit on their hands. They simply twiddle and produce a Green Paper that recycles old information, which we have heard time and again. Is not it time that the Government did something to help poor pensioners?

The hon. Gentleman should calm down. I can answer the point about 1 million people not claiming the pension credit-that policy has not yet been implemented. The hon. Gentleman should ask a sensible question. The one organisation that brutalised pensioners is the Conservative party. The Government inherited a legacy of pensioner poverty and are eradicating it.

What measures he has taken to encourage into work those in the most deprived communities who are counted as economically inactive. [89703]

Our active labour market policies are helping people to move from welfare to work in all parts of the country, and tax credits are making sure that that work pays. The new deals have already helped three quarters of a million people into jobs, and jobcentres are notified of more than 10,000 new vacancies every working day. Moreover, in the most employment-deprived areas of the country we have introduced specific initiatives such as action teams for jobs. The action team working in my hon. Friend's constituency has so far helped 275 people into jobs.

I know the Minister will agree that this is a huge issue. In some parts of the south Wales valleys, as many as one in four of the working-age population are categorised as economically inactive. Does my right hon. Friend also agree that it is necessary to improve the health and well-being of many in our poorest communities, and that healthy living programmes must be a vital part of our ongoing strategy?

I do agree; I represent a constituency with similar problems. We must consider people on "inactive" benefits who might be able to do some work if the opportunities and the encouragement were there, and work with the national health service to establish rehabilitation programmes. That, indeed, is the thrust of the Green Paper on which we are now consulting.

The Minister will know that there are now 4 million income support claimants, more than there were when the Government came to power. He will also know that the number of incapacity benefit claimants is back to the 1997 level. Of the lone parents who were promised—if that is the right word—mandatory interviews enabling them to seek employment, only 14 per cent. have been given such interviews. What has gone wrong?

The problem arose, of course, under the Conservative Government, when the number of people receiving incapacity benefit and its predecessor trebled. It was, indeed, the unstated policy of the Conservative party to move people from unemployment benefit on to the inactive benefits, because unemployment was at its peak: some 3 million people a year were becoming unemployed.

My right hon. Friend will know from his several visits to Plymouth of the spectacularly successful work done by the employment action zone and the Employment Service in tackling unemployment there. How will the partnerships be helped through the operation of employment action zones after October this year to help the "hardest to help" back to work?

Those matters are under review. The Government's core policy is, of course, the roll-out of Jobcentre Plus. I have just written to Members describing the programme, and there is a copy of that letter in the Library. The future of the employment zone model is under consideration, but the Government will want to continue the partnership work that underpins it.

What targets his Department has for getting people who claim incapacity benefit into work. [89704]

None in that form. Our target is to increase the employment rate of disabled people, and to reduce the gap between their rate of employment and the overall employment rate. The proposals in our Green Paper "Pathways to Work" aim to help more people in receipt of incapacity benefit move into jobs.

The Government may have no targets now, but when they launched the new deal for disabled people their target was to return 90,000 disabled people to jobs within three years. However, Disability Now magazine—which I am sure the Minister respects as much as I do—tells me that the current figure is not 90,000 but 1,400. Why is that?

If I recall correctly, 8,000 people have moved into jobs through the new deal for disabled people. We need to do more in terms of our overall policy, but we are making good progress on the employment rates of disabled people.

I recently visited the social security office that provides services for my constituency. The staff there embraced and welcomed the new Jobcentre Plus approach. They are on the third phase, but there was a concern that those on the final stages of the roll- out of the new programme will not necessarily get the benefits that those involved in the pilot programme will receive. Will my right hon. Friend assure me that those at the end of the programme will be as well furbished and established in our constituencies as those who are at the beginning?

Yes, indeed. The whole object, as we develop new programmes and pilot new initiatives, is to learn from experience so that we can ensure that the service improves—for example, through the programme support and personal advisory support that is available, and which, reports tell me, is greatly appreciated by clients of our services.

I am sure that the Secretary of State and, in this respect at least, the whole House may wish to agree with the Prime Minister, who said in a speech last year that it was "a scandal" that 2.7 million people on incapacity or other disability benefits are

"written off, left to drift into long-term incapacity and unemployment".

We have already had action, which is why the annual inflow on to incapacity benefit fell by one quarter between 1997 and last year, from 840,000 a year to 640,000. That compares with an inflow rate of 940,000 a year when the Conservatives were in government. Of course we want and need to do more to help people on incapacity benefit who want to work, and are able to work, to get into jobs. Some 150,000 a year move into work at the moment, and I would have hoped that there would be support from the Conservative Front Bench and, indeed, from all hon. Members, for helping still more disabled people to fulfil their potential through work.

What plans he has to link housing benefit penalties to antisocial behaviour. [89705]

The inclusion of an antisocial behaviour Bill in our legislative programme underlines the Government's determination to tackle this problem, which blights the lives of so many of our constituents. We shall include in that Bill whatever measures will act as a real deterrent. We are considering a range of options, including housing benefit sanctions.

I am sure that my hon. Friend will agree that nuisance neighbour problems can be some of the hardest that we have to deal with in our constituencies. Constituents can become really frustrated at the inability of housing authorities or the police to take the action necessary to fix the problem. Does my hon. Friend agree that their frustration can be further aggravated by the knowledge that, in some cases, the law-abiding innocent neighbour may be subsidising the rent of the nuisance neighbour through their taxes?

I certainly understand that frustration. There was widespread support in the House for the Bill introduced by my right hon. Friend the Member for Birkenhead (Mr. Field), and it was our job in the Government to try to make that a workable and legal Bill. It would have been on the statute book now but for the successful filibuster by the Liberal Democrats, who will have to account to their electorates for their behaviour.

Does the Minister consider it to be antisocial behaviour for a council not properly to deal with housing benefit claims from constituents who are vulnerable and need help? What action would he propose taking against a council that has been found by the Audit Commission to be failing in payment of housing benefit?

We are taking a wide range of measures and action to improve housing benefit administration. We have a performance framework and extra funding for local authorities, and housing benefit performance is increasing, but I recognise that there are problems in some local authorities. We are tackling them as fast as we can.

As the Government kindly took over the Housing Benefit (Withholding of Payment) Bill—and rewrote every clause and every word in it, including the long title—what would be the Minister's response if, after the support that No. 10 has provided, its provisions do not appear in the antisocial behaviour legislation that the Government are to introduce later this year?

To use my right hon. Friend's phrase, we took over the Bill simply to make it legal and workable, and he must forgive us for that. The serious point is that there is a range of ways to tackle antisocial behaviour. The Police Reform Act 2002 introduced changes that will strengthen antisocial behaviour orders, because we know that too few have been enacted. Also, the Office of the Deputy Prime Minister's consultation paper, "Tackling Anti-Social Tenants", includes a range of ideas about tenancy agreements and the rest. Those and my right hon. Friend's ideas are ones that we are considering actively in terms of the antisocial behaviour Bill that will be brought before the House.

Concern about such disgusting behaviour extends to all parts of the House, and I am sure that all Members present have had brought to their surgeries, as I have, harrowing cases involving frightened or terrified people—pensioners, young families and others—some of whom have even been driven from their homes. The Minister has rightly drawn attention to the shameful role of the Liberal Democrats in talking out the measure. When will he be able to tell his hon. Friends whether the proposal is to be enacted this year?

We all recognised during the deliberations on the Bill introduced by my right hon. Friend the Member for Birkenhead that, at best, it would be a minor weapon in the armoury and that antisocial behaviour orders—this we stated at the time—and tenancy agreements were the stronger. I can only repeat that we are considering all those ideas, and our proposals will come forward with the Bill in due course.

What his targets are for reducing the number of households that receive benefits and which are below the poverty threshold. [89706]

On 18 September 2002, we published a new edition of "Opportunity for All", which provides a detailed account of our strategy for tackling poverty and social exclusion as well as the range of indicators and targets against which we measure progress. The report shows that we have achieved a great deal and that our approach is working. We will continue to deliver on that challenge over the years to come.

I thank my hon. Friend for that answer. We are all aware that work is the only way out of poverty for many and that we are encouraging people in areas where the number of vacancies is greater than the number of jobless to take a role, but what is he doing to protect the vulnerable innocent—the children—who all too often live in households where income falls below that which we deem necessary?

We all recognise that over, perhaps, the past 30 years, due to economic as well as social and family factors, poverty in this country began to wear a younger face—child poverty increased significantly. Back in 1996–97, one third of children lived in low-income households. I am pleased to say that, compared with 1997, there are about half a million fewer children in low-income households, based on a relative measure. Given the real increase in incomes, and therefore the moving target that we face, that is a real improvement in tackling relative poverty as it affects too many of our children.

I n the words of the question, what are the Minister's targets? Has he achieved them, or is he going to?

The Government have a strong ambition to eradicate child poverty—[Interruption.] If the House will listen, we also have a public service agreement to reduce child poverty by a third. So far, we have gone a third of a way in a third of the time towards achieving that target.

Thirty-nine per cent. of people of working age in my constituency are economically inactive, and we have the third poorest average wage rates in the whole of Scotland. Will my hon. Friend therefore consider urging his right hon. Friend the Secretary of State to site one of the six new pilot schemes giving people on incapacity benefit extra help to get into work in my constituency, as that will go some way towards tackling one of the most serious causes of poverty households?

I am afraid that the decision on the pilots has not yet been made, but I am sure that my colleagues have heard my hon. Friend's genuine concern. We all recognise that incapacity issues are some of the most taxing facing our society, and our recent document shows our determination to tackle those issues effectively.

Work is the best way out of poverty. However, the rate of economic activity in Wales is much lower than in the south-east of England—61.3 per cent. in early 2000 for people over 50 compared with 76.8 per cent. in the south-east. Can the Minister assure us that that gap is being closed?

We are conscious of regional and local variations in unemployment. So far, the success is that some 75 per cent. of people of working age in Britain are in jobs, which puts us more or less at the top of the European league table—only two smaller countries have a slightly better record. We are not complacent, however, and now realise that our understanding of the causes of unemployment has to be more detailed and specific if we are successfully to tackle them and the issues raised by the hon. Gentleman.

My hon. Friend is correct to draw attention to the action taken by his Department to eradicate child poverty. However, will he explain what he intends to do to ensure that the Child Support Agency, which is not collecting maintenance so some families are driven into greater poverty, becomes more efficient and provides maintenance for the 30 per cent. of children who are losing out at present?

Certainly, I alluded earlier to family changes that have affected Britain and the fact that many of our children are now growing up in one-parent, rather than two-parent families. That is a major contemporary cause of poverty, hence the introduction of the Child Support Agency, whose performance is improving year by year. We have, of course, introduced proposals for reform. When we are in a position to implement them after thoroughly testing the system and after my right hon. Friend the Secretary of State is able come to the House with dates, they will further improve the situation. With a simpler formula, our colleagues in the CSA will be able to spend more time on enforcement, which is a major step in the right direction.

If he will make a statement on the Government's policy towards the minimum funding requirement for pensions. [89707]

Our Green Paper on working and saving for retirement sets out proposals for replacing the minimum funding requirement with scheme-specific requirements that will allow schemes to chose investment strategies more appropriate for their own particular circumstances.

I am grateful to the Minister for her helpful reply. Given the widespread and justified concern about companies which, in choosing to wind up their final salary schemes, universally renege on their pensions obligations to their staff, can the hon. Lady tell the House and me whether, under the new arrangements, companies will be better or worse placed than under preceding arrangements to keep their pension promises to their employees?

First, I welcome the hon. Gentleman to the Back Benches—the last time that we jousted in the House he was in a different place. Since he moved, I have found that I agree with more and more of what he says. For example, I agreed with him the other morning when he said on television that the Tory party's chances of winning the next election are about as great as finding an Eskimo in the desert.

My hon. Friend will know that the trade union movement has made specific demands for the Government to protect workers' pensions. Far too many companies have got away with pension holidays and are now reneging on final salary payments. It really is time for the Government to get tough on employers who scandalously expose their workers to poverty when they retire.

I strongly agree. My hon. Friend will have noted that the Green Paper contains proposals for stiffening the obligations on companies to consult their employees and unions before making unilateral changes to their schemes. Unfortunately, the current minimum funding requirement did not provide the level of security that many thought it might, and that is why there is widespread agreement in the industry and across the field that we are right to be considering changes to the MFR. One of the difficulties is that it has led to short-term decision making and inflexibility. In a time of fluctuating stock markets, to say the least, short-term decisions are not necessarily the best thing for pensions, which are of course a long-term business.

Does the Minister agree that, when one considers the whole spectrum of investments, including pensions, split funds and life insurance, one can see, without wanting to appear too alarmist, that there is a real risk of people losing confidence in all financial instruments. Is it not therefore incumbent on the Government to apply their mind to the problem with rather more urgency than is suggested by a Green Paper process, which may mean that effective remedy is years and years away?

We have to strike a balance between responding urgently to daily headlines and situations that change very quickly and bearing in mind the fact that pensions are a long-term business. We will not get the best framework for private pensions saving over the long term if we react daily and make changes that deal only with issues that are in the headlines. We will not ensure that people save enough in private pensions for their retirement if we do not have the right framework in the long run, so the most important thing is, with as much consensus as possible in the House and across the industry, among employees and employers, to get the right system in place to provide the protection and balance that will enable people to save appropriately for their retirement.

If he will make a statement about the effectiveness of action teams for jobs. [89708]

Action teams are performing well, so far helping over 57,000 jobless people in the country's most deprived areas to move into work. An evaluation study of the first year of the initiative found that 80 per cent. of people who found work through action teams moved into sustained jobs.

In parallel with the work of the action teams there are some outstanding local developments and initiatives that are trying to deal with some of the long-term unemployment problems in rural and semi-rural areas. Will my right hon. Friend ensure that we continue to encourage such initiatives so that we can really tackle the problems?

I strongly agree. We have to provide a whole range of modern, labour market-oriented services to sparsely populated communities. The Department takes its outreach work very seriously. We are considering initiatives such as mobile centres to give advice on jobs that are available, and indeed on benefits.

But does the Minister believe that the 1 per cent. employment tax starting in April will improve job opportunities?

The public services have to be funded.

Action teams for jobs have been a great success in my constituency, and there are some wonderful examples of how that initiative has got people back into work. However, does my right hon. Friend accept that its effectiveness is limited in part because it is targeted on priority wards, rather than being provided for the whole district? Can he understand how frustrating it is for somebody to discover that they might be denied help from an action team simply because they live on the wrong side of a road?

My understanding is that the action teams are not too prescriptive about this, but I do appreciate the point that my hon. Friend makes. Nevertheless, I think it right that scarce public resources be targeted where the need is greatest, and I do not think that such projects would be helped by the £20 billion cut in public expenditure that we understand is on offer from the Opposition.

What level of savings fund is necessary for a person not to qualify for the minimum income guarantee. [89709]

The level of pension savings needed for a person not to qualify for the minimum income guarantee will depend on the level of entitlement to state pension benefits that has been built up over individuals' working lives. The introduction of the pension credit ends the unfair, absolute penalty on savings, thus encouraging people to provide for their own retirement. The existing capital cliff edge will disappear, so those with savings of more than £12,000 will no longer be automatically excluded from help.

Is the Minister aware that a pensioner couple in receipt of both housing benefit and council tax benefit need a fund of £142,000 in order not to be subject to means-tested benefits? Does he not agree that letting pensioners keep 100 per cent. of their savings and giving them a higher basic state pension as of right would be the most effective ways to assist saving among the poorest of the population?

I wonder how the hon. Gentleman squares that view with the intention, expressed by Opposition Front Benchers, of cutting public expenditure by 20 per cent., some of which would fall on the poorest pensioners. His party is against the minimum income guarantee, the pension credit and winter fuel payments. The fact is that this is the first Government in history, through the pension credit, to give people the incentive to save—unlike the previous Conservative Government, who imposed a 100 per cent. marginal tax rate on savings, thus forcing many pensioners into poverty.

Can the Minister confirm that since 1997, the minimum income guarantee has led to a real-terms increase in the pensions of the poorest pensioners of 37 per cent., taken 1.1 million pensioners out of absolute poverty, and provided an average additional sum of £30 per week for the poorest pensioners? However, can he also confirm that this is the same MIG as the Leader of the Opposition described as having nothing to recommend it?

Order. That was two questions: the Minister should answer the first one, not the second.

That was always my intention, Mr. Speaker—although perhaps I should ask my hon. Friend to repeat it, as I cannot remember it.[Laughter.] He is absolutely right, and perhaps the most important point to make is that, hopefully, hon. Members on both sides of the House will come together from April of this year and adopt a bipartisan approach to securing the successful implementation of the pension credit. It will provide more than £2 billion in the way of additional income for the poorest pensioners and, for the first time, for those who suffered under the previous Conservative Government, when they saved a little and lost a lot.

Can the Minister confirm that under the pension credit, which will affect the majority of pensioners, any pensioner will keep only 60p of every extra pound of pension income that they save?

When the right hon. Gentleman was Secretary of State., pensioners got nothing: for every pound saved, they lost a pound. He gave with one hand, and took with the other.

indicated dissent.

Perhaps I should start again. The right hon. Gentleman owes this House and our country an apology for the way he managed this Department as Secretary of State. He introduced rules that meant that for every pound a pensioner saved, their entitlement was reduced by a further pound. The pension credit has at last put right the mistakes that he made.

What his estimate is of trends in average pension yields over the next decade. [89710]

The Government do not make an official estimate of future investment returns. Over the past 10 years, overall pension investment returns have been 7.5 per cent., and private sector estimates suggest that they will be around 7 to 8 per cent. over the next 10 years.

It is surprising—is it not?—that one? can have an answer to a question like that without any mention of the £5 billion a year taken from pension funds by the Government since they abolished the tax credit on dividends in 1997. The Under-Secretary was waxing eloquent about the iniquity of firms in closing final salary schemes, but does she accept that the Government's pensions raid has little to do with those firms doing what they have done? They could have absorbed it, they should have absorbed it, but if the Government had not taken that action, the problem might not have arisen.

No, I do not accept that. The Conservative party is for ever talking about the £5 billion without mentioning the offsetting corporation tax cuts, for a start. As is well known in the House, throughout the industry and by anybody who considers these issues, many factors have led to some of the problems in respect of defined benefit schemes and their closures, not least the stock market falls that have been taking place over the past couple of years.

I know that my hon. Friend is aware that the pension yield for ex-Allied Steel and Wire workers from Cardiff over the next 10 years may be as low, according to some predictions, as 16 per cent. of the pension they expected on retirement. I know that she will want to join me in welcoming last week's announcement that Celsa is reopening the steel plant in Cardiff, which will save many hundreds of jobs. Will she also agree to look at the plight of those workers who lost their pension as a result of losing their jobs at a time when the pension fund was at a low ebb?

Yes, and I know that my right hon. Friend the Minister for Pensions has met some of the workers affected in this particular case. Much of the Green Paper deals with issues that have been raised by right hon. and hon. Members on both sides of the House in respect of those who work and save into occupational pensions and whose legitimate expectations are not met. We must get right the changes that will arise following the consultation on the Green Paper. If we do not, it is much less likely that people will be confident enough to save into occupational pensions the amount of money that they need to ensure a secure retirement.

Does the Minister agree that the fall in pension yields has been particularly serious for annuitants? As the Government have held at bay the amounts for compulsion in other elements of pension policy, why do they cling to compulsion in this area rather than allowing pensioners to make their own investment decisions?

The hon. Gentleman will be aware that annuities are the only way of securing an income for the lifetime of a person who has saved, and of course we all celebrate the fact that people are living longer. That is what pensions are for, and that is why annuities are important. I am sure that the hon. Gentleman and his party will be responding in full to the Green Paper consultation, and I look forward to seeing what they have to say.

If he will make a statement about the rate of saving for retirement in the United Kingdom. [89711]

As set out in the pensions Green Paper, we believe that as people are living longer and want good standards of living in retirement, they need as a whole either to save more, to work longer, or a mix of both. That is why we are consulting on a range of measures to improve simplicity, security and choice in pension saving as well as making it easier for people to carry on working longer when they want to.

I n view of the problems of last year's Office for National Statistic figures, is the Secretary of State convinced that people are now saving enough for their retirement? If not, what is he doing to encourage people to save more?

I already said in my initial answer that we recognise that if people want good standards of living in retirement, and as people are living longer, they will clearly need to save more, work longer or a mix of both. The ONS conducted a review of the statistics, and I think it wise to treat all pensions statistics with caution until that review has been fully implemented.

Is not the greatest sense of insecurity about people's pension contributions to be found in the 40 per cent. devaluation in the value of their pensions that is a result of frittering that away in a gamble on the stock exchange over the past year? If we are to encourage pension contributors to make larger contributions, should we not also consider allowing workers to have a greater choice about the direction in which their savings are going? I refer specifically the prospect of workers being able to choose to have their contributions paid into infrastructure investments, which would provide security of assets, certainty of return and a social dividend on top?

The Green Paper's proposals radically to simplify the framework for pensions saving, not least as far as tax treatment is concerned, will increase existing flexibility, which has already been enhanced, not least by the introduction of individual savings accounts.

The Secretary of State has just said that it is wise to treat pension statistics with caution. Why, then, having come to the House last month to claim that our pension contributions had increased by 40 per cent. since 1997, did he use that statistic as justification for the complacency of his Green Paper? I welcome the fact that he has not repeated that statistic today; has he seen sense and abandoned his claim that our pension savings are zooming upwards? If that figure really is so shaky, why did he rest his policy on it last month?

There is no complacency about pension savings or the way in which the statistics are assessed. That is why I announced the review on which the ONS has now embarked. That is also why, as I said, it is wise to treat all statistics with caution until the review has been fully implemented. The hon. Gentleman will have noticed that the pension commission that we are establishing as part of the Green Paper process will, as one of its first tasks, undertake a baseline audit of the adequacy of long-term savings for pensions, including the adequacy of the information available.

I t is always the fault of the Office for National Statistics. The fact is that Ministers used the statistics as the basis for their complacent policy. I do not believe, and have set out my arguments for not doing so inThe Times today, that we are saving £46 billion a year, another statistic that the Secretary of State has repeated. The correct figure is £32 billion a year. The Secretary of State is able to claim that we are apparently putting more and more money into our pensions only by counting the extra money that companies must put in to offset the effects of the tax increase. If he were to put another £5 billion a year tax on pensions, and if companies had to put more money into their pensions funds to counteract it, he would claim that we were saving more for our pensions. Does he realise what an absurd position he has got himself into?

The hon. Gentleman has been very assiduous on this matter, and I have been happy to come to the House to acknowledge the service that he has provided in questioning the statistics. Indeed, that is the job of the Opposition.

What plans he has to help people affected by large-scale redundancies to find new work. [89712]

In April 2002, we launched the rapid response service to provide a coherent, tailored response to help people affected by large-scale redundancies. The service provides advice and support to enable people who are made redundant to make the transition into new jobs. By December, the rapid response service had provided support nationally to more than 200 companies and made its services available to more than 67,000 people facing redundancy.

I thank my right hon. Friend for his reply and for his keen interest in my constituency. Does he agree that one problem in constituencies such as mine is that while jobs tend to be lost in the manufacturing sector, the jobs that are created tend to be in the service sector? What is being done to help people who find themselves in those circumstances?

My hon. Friend is right. The labour market circumstances in west Cumbria are specific to that area. The response led by the local authority in my hon. Friend's constituency is the right one. The authority has brought together all elements in the community to consider areas in which new jobs can be created, to do what they can to assist and to work with the Employment Service, and to offer proactive advice to those who are displaced in the labour market, most of whom, as my hon. Friend said, have been displaced from manufacturing enterprises.

The Minister will be aware that most large-scale redundancies in the Vale of York are in the farming community. Can he confirm that there will be training opportunities for those who have lost their jobs on farms, and that, for example, those who may have been well qualified to drive tractors will be eligible for training to drive light goods vehicles? To whom should such people apply, and could the training eventually be extended to heavy goods vehicles as well, as that is far too expensive for individuals to pay for out of their own pocket?

I am more than happy to help the hon. Lady's constituents where I can. Of course, I have sympathy for those in farming communities who are displaced. The fact is, however, that employment trends in agriculture are remorseless, long term and very clear. May I write to the hon. Lady on the specifics that she raised? As for where people should apply, it is of course to the nearest jobcentre.

I very much echo the concerns raised by my hon. Friend the. Member for Workington (Tony Cunningham) and draw my right hon. Friend the Minister's attention to my constituency, where there were four large-scale manufacturing redundancies in the past year, resulting in 1,000 job losses. Many of the people affected are in their 40s and 50s and have done only that one job throughout their working lives. Although the local jobcentre has provided them with an excellent service, I am aware that few of them have taken up the offer of retraining. Will my right hon. Friend investigate why so few people take up such offers, and will he consider how to improve retraining opportunities for people who are moving from manufacturing to other industries?

My hon. Friend is right: age is a factor in those considerations. There is a range of options in the Department's armoury and we want to explore all of them, including the possibility of finding similar employment with employers in similar areas of activity. I shall look specifically at the issues that my hon. Friend raised in relation to his constituency and write to him about them.

What progress he has made to check the validity of financial returns to the Child Support Agency by absentee fathers who use the services of accountants or other financial advisers. [89713]

The agency applies the same level of verification to a case, irrespective of whether its client has used a financial adviser.

May I ask the Minister to reflect on that answer? If an absentee father can afford the services of an accountant or financial adviser to show that he cannot afford to look after his children, there is a strong possibility that somewhere along the line somebody may not be telling the truth. May I suggest that inspections of the lifestyle of some of those absentee fathers, who can afford financial advisers but cannot afford to pay for their children, would be well worth pursuing?

Since October 1999, the Child Support Agency has been able to share information with the Inland Revenue and to base liability for maintenance on self-assessment returns. It would not make sense for the agency to duplicate the work of the Inland Revenue; if people think that fibs are being told to the Revenue, they should be reported. On the hon. Gentleman's final point, the system allows for what is technically known as a departure to be made where it is absolutely clear that the lifestyle of the non-resident parent, or the absent father, does not seem to be in kilter—if I may put it in that way—with their declared income. Those are difficult cases and depend very much on proving, one way or another, whether the income as reported is correct.

I concur with the sentiments behind the question put by the hon. Member for Colchester (Bob Russell), but may I point out to my hon. Friend the Minister that there is another side to the equation? What does he think about a situation in which the agency determines that the profits of a self-employed business man, which are aimed for investment in his company, are in fact income that he can use weekly or monthly? Those profits thus count against him.

The problem—the rub—in cases of family breakdown is that there are two sides to the story. That is the difficulty. If my hon. Friend has a particular case in mind, I shall ask the agency to look into it, but there are clear rules about what does or does not count as income and we try to apply them. I shall be happy to look into the particular case raised by my hon. Friend.

If he will make a statement on his proposals for changes to the statutory retirement age. [89714]

There is no state retirement age, only a state pension age—the age from which people can receive their state pension, regardless of whether they have retired or are continuing to work. We have no plans to change that. However, under age legislation, which will be implemented by 2006, compulsory retirement ages are likely to be unlawful unless employers can show they are objectively justified.

I thank my right hon. Friend for that answer, but may I suggest to him that men and women in their 60s may start to suffer from a bit of an identity crisis unless there is a little more clarification about the age at which they can start genuinely to feel that they ought to be real pensioners and therefore have access to the great variety of Government benefits that are accessible to pensioners?

There are two issues. First, the Government have for the first time launched a pre-retirement guide to help older workers to plan their retirement.[Interruption.] I hope that, instead of boo-hooing, Opposition Members will read the damn thing. Secondly, the big problem in Britain has not been workers being able to work up to retirement age, but discrimination in stopping them doing that. Under the last Conservative Government, people with skills, knowledge and commitment were thrown on the scrap heap when they were as young as 45. This Government will end age discrimination and give people a choice to remain in work, and, if they want to work part-time when they retire, we will give them the choice to do that too.