What measures he will take to assist the hardest-to-help unemployed into work in Cardiff, West. [28137]

We have introduced a range of initiatives that are helping disadvantaged groups to move from welfare into work in all parts of the country. In Cardiff, West, long-term unemployment has fallen by over two thirds, and long-term youth unemployment by three quarters, since 1997.

I thank my right hon. Friend for his answer and, in particular, for the pilot scheme that the Government will run in my constituency to help the unemployed.

Yes, I can. A range of jobs will be available to each client, and will be guaranteed for up to a year. It will be real work, and people will be paid at least the minimum wage. They will be employed, as opposed to on a scheme, and the Department will work with individual clients to ensure that these opportunities lead to further, permanent employment.

If he will make a statement on the level of benefit fraud. [28138]

What targets his Department has set local authorities for benefit fraud prosecutions for 2001–02. [28143]

We estimate that £2 billion is lost annually owing to confirmable fraud across all benefits.

Will the Secretary of State confirm that, according to his own figures, only 1,100 of the 460,000 cases of suspected fraud were successfully prosecuted? That is a success rate of some 99 per cent.[Interruption.] I mean a failure rate of 99 per cent. The exact figure is 99.75 per cent. Does the Secretary of State agree that that figure reflects his Department's lax attitude?

I was going to say that 99 per cent. sounded all right to me.

In 1999–2000, 50 per cent. of local authorities failed to prosecute a single person for council tax benefit fraud or housing benefit fraud. My local authorities in Newark and Retford tell me that, with changes in housing benefit administration occurring nearly every fortnight, the delivery of the benefit—let alone detection of fraud—is almost impossible. Would the Secretary of State care to comment?

Successive Governments have tried to tighten up the regime for administering housing benefit. One of the problems is that it is run by just over 400 local authorities. Interestingly, while some authorities can run it quite well and have a good record, others do not. In some cases, the record has been truly appalling. That is one reason why we sent action teams to improve the performance of a number of authorities, which has resulted in a significant improvement in the administration of housing benefit.

The Secretary of State will be aware that the only way to tackle benefit fraud is through the hard work of Jobcentre Plus staff, and that today many thousands of those staff are on strike because of fears for their safety at the workplace. Will he do whatever he can to bring both sides together to resolve that serious dispute before it escalates any further?

From the figures we have as of lunchtime, fewer people are on strike today than during the previous so-called national strike in December, and significantly fewer offices have closed. The problem that the PCS—the Public and Commercial Services union—has to face is that it does not have the support of anything like a majority of staff in its campaign to retain screens in benefit offices. Today, nearly three quarters of department staff are in work. Critically, the vast majority of staff working in the new Jobcentre Plus offices—the offices that are predominantly unscreened—have been in work since they opened last year.

How extensive is fraud in relation to adopting the national insurance number and the name of another person? What measures are there to combat that? What measures are taken to inform other agencies when it is discovered, such as the police national computer, the Child Support Agency and credit agencies? This is a serious problem facing one of my constituents and, I understand, the constituents of many other people.

No matter where it occurs in the system, fraud is extremely serious, although in the scale of things, national insurance fraud is a lot less of a problem than, for example, people who falsely represent their circumstances. None the less, we take it seriously. My hon. Friend may be interested to know that about two years ago, during a pilot project in the Balham office in south London, we carried out far more extensive checks into people's identity. That resulted in a number of false claims being found, people being referred for prosecution and one or two people being deported.

The Secretary of State will know that the local government ombudsman for London has said that the housing benefits administration system is in chaos. Can he give an assurance that that administration will be radically improved, particularly in many London boroughs? Without that, there is no question but that the tackling of fraud will not be at its most effective.

As I said earlier, what is striking—this applies to London as much as to the rest of the country—is that some local authorities administer housing benefit well and others, in administration is appalling. I am determined to ensure that we drive up standards in those local authorities where standards are way below an acceptable level. That is the best way to bear down on fraud and error.

Does my right hon. Friend agree that not all cases of benefit fraud are due to the Conservative party, although we have tried to blame it for everything? Does he agree that perhaps the time has come for us to look at benefit fraud and at what happened in years gone by when the Opposition manipulated the figures and put people on benefit? It is time to get them off.

Order. The policy of the Opposition is nothing to do with the Secretary of State.

I shall try to attack the Secretary of State as effectively as his own colleague, the hon. Member for Glasgow, Anniesland (John Robertson), did.

The hon. Gentleman's argument would have more force were it not for the fact that no serious attempt was made to even measure fraud in the social security system until 1995, about 15 years after the Conservative party was elected to government. Also, there was no systematic measuring of fraud until after 1997, following the general election in that year. In that time, we have put in place a number of measures that, as I have said, are now beginning to bear fruit. The fact that I can tell the House that fraud and error in income support and jobseeker's allowance are down by 18 per cent.—something my predecessors could never have said—shows that our efforts are getting results.

What assessment he has made of the impact of welfare-to-work policies in London. [28139]

In London, more than 70,000 people have been helped into work through our new deal programmes, including 42,000 young Londoners. In addition, more than 10,000 more have moved into work in some of the most deprived areas through employment zones and action teams for jobs. Altogether, our policies have helped to reduce unemployment in London by more than 30 per cent. since 1997 and long-term unemployment has fallen by nearly 60 per cent.

Fraud is very important, but it is also important that those people who are entitled to benefits get the help that they need when they require it. It is of some concern to me that despite the national success of the working families tax credit in topping up the incomes of low-income families, Londoners are less likely to receive that benefit. In particular, low-income single parents are half as likely to receive working families tax credit as people in the country as a whole. Will the Government commit themselves to a research project to establish why we have these variations, and to find out how much of it is due to a lack of awareness and how much is due to structural problems that can be removed to make sure that Londoners get the help that they require?

I know of my hon. Friend's great interest in this matter in her constituency and London as a whole. I shall go through these matters with her to see whether there is a need for research. Across the country—including in London—the working families tax credit has been of enormous help to two and one-parent families. In London alone, some 95,000 families have benefited from the working families tax credit.

Is not the hon. Member for Regent's Park and Kensington, North (Ms Buck) right to say that the key to the success of these policies is access? Given that the take-up of working families tax credit in her constituency and others in London is extremely low, will the Minister tell us what will happen when working families tax credit migrates to child tax credit in 2003? How will those who do not have bank accounts receive their credit if the universal bank is not up and running by then? Secondly, with 40,000 of his staff on strike today—a fact dismissed by the Secretary of State—is it not time that the Government and the management spoke constructively to their staff, to enable them to provide the advice that they should be providing to those who need it?

There was a lot there in terms of quantity, but the hon. Gentleman greatly inflates the number of people on strike. The strike has not been a success, and we urge people to return to work to make a success of what is already a successful project—Jobcentre Plus. We talked about fraud earlier, and just as we need to bear down on fraud—as we are doing—we need to enable people to claim the benefits to which they are entitled, in a variety of ways. We are pleased by the success of working families tax credit, and the new child tax credit will also be a success, but we will look at any sensible ideas for increasing take-up.

Does the Minister accept that part of the welfare-to-work programme involves an incentive, and that in London and other cities, such as Glasgow, where rent and council tax levels are higher, those in low-paid jobs do not have so much incentive to go into work because they lose their council tax and rent rebates when they do so? Would the Minister be prepared to consider the pilot project suggested by Glasgow city council to waive the loss of rent and rate rebates for a period for people going into work? If that project were successful, and if it were adopted elsewhere, it would undoubtedly assist people in London and Glasgow.

I recognise that we need to do all that we can to inform people about what will happen when they go off benefit full-time and go back into work. Many people are, understandably, ignorant about those effects. That is why, in Jobcentres and Jobcentres Plus, we do a "better-off calculation", to demonstrate to people exactly how much better off they will be in work. Many are pleasantly surprised at the result. That is because people still receive housing benefit when doing a low-paid job. They are also entitled to the minimum wage, and tax credits bite in with good effect.

Is not the Minister concerned that so few of those leaving the new deal in London are being taken on by central Government Departments? Is he not also concerned that, since March last year, when the Select Committee said that it was "extremely disappointed" by the failure of Departments to recruit more people from the new deal—and when the Minister's own Department promised to set up special programmes to encourage Departments to recruit more from it—the number being recruited by central Government has fallen still further? A few moments ago, the Secretary of State said that it was important for the different arms of government to work together. Is it not clear that, when it comes to the new deal, they are not? The Government are snubbing their own policies, and other Departments are snubbing the policies of his Department.

The hon. Gentleman talks from a position of some principle. That principle is that he is against the new deal. The fact is that we have enabled young people to enter different forms of employment in the public sector and in the private sector, and also to take routes into training and education. What the House needs to understand—and what the Opposition do not wish to understand—is that the new deal has been a great success in enabling people in London and elsewhere to get into the world of work.

What additional (a) financial and (b) practical help is offered to pensioners who are in hospital for more than six weeks. [28140]

There is no additional financial help, although community care grants may be available to help with fares for other family members to visit a person in hospital. After six weeks in hospital, a person with a basic rate pension would receive £58 a week, or £44.20 if they had no dependants. Housing benefit would remain in payment for people on the minimum income guarantee. In terms of practical help, every patient should have a discharge plan, including an assessment of their future care needs, developed from the beginning of their hospital admission. All hospital in-patients have access to a social worker. From this April, patients in every NHS trust will have access to a patient advice and liaison service to help them with their dealings with the hospital.

I completely understand the principle behind the clawback from pensioners, but I was a nurse for many years and spoke to many couples who had a loved one in hospital, and the extra burden—including, as she rightly said, transport—is often difficult over a sustained period. I hope that the Minister can consider other practical measures to ensure that our pensioners do not suffer if they have to spend an extended time in hospital.

I assure my hon. Friend that the Department keeps all matters relating to all our benefits under review—but I must also make the point that in written answers on 8 January to my hon. Friend the Member for Dover (Mr. Prosser), recorded at columns 699–700W of Hansard, my right hon. Friend the Minister for Pensions made it clear that at present we have no plans to make any changes in the hospital downrating provisions. The principle of avoiding double provision is a key cornerstone of the system of national insurance; it was introduced more than 50 years ago, and has been supported on both sides of the House. Indeed, as recently as Thursday, Lord Higgins, who speaks for the Conservative party in the upper House, supported it by suggesting that one way round the problem that arises on the resumption of benefits would be to continue them throughout a hospital stay, but to charge the individual for rent, accommodation and so forth. That is the Tory answer.

Can the Minister give some reassurance to Age Concern in Tiverton? I met its representatives on Friday night, and they expressed concern about the increasing number of elderly people in hospital who are demanding to be sent home just before the six weeks are up. One of the factors behind that is the long delay in getting their benefit books back after they have to surrender them for the adjustment. Is there no minimum turn-round time that the Benefits Agency has to work to? If so, it is not working in my constituency. Will the Minister take a particular interest, and do something about that?

I would be happy for the hon. Lady to refer those cases to me so that I can look into them in detail. The Department does have a target for those who are claiming back a benefit. The target for dealing with a new claim for income support and the minimum income guarantee is 12 days, and the latest figures show that in fact we turn such claims round in 9.4 days. For claims concerning changes of circumstance the target is four days, and our performance shows that in fact we turn those claims round in an average of two and a half days. If the hon. Lady is running into problems in her constituency, I shall be more than happy to look into them if she refers them to me.

Obviously I do not want to raise an individual case, because that sort of thing caused some controversy last week—but is my hon. Friend aware that there is concern, especially among elderly people, who are most vulnerable during a stay in hospital, and who may feel that they will lose all their benefits? Will she examine the situation and make sure that social workers give adequate information to the people who are most vulnerable?

I understand the point that my hon. Friend makes; it is important that when people are vulnerable in hospital they get proper advice. However, as I am sure everyone in the House would accept, giving people benefits advice when they are not feeling well could cause confusion and fear. There is no reason why the rules should not be well known—they have been operating for 54 years, since the beginning of the welfare state—and I hope that those dealing with vulnerable elderly people make the position clear to them. It has not changed recently.

It seems risky being a pensioner in hospital these days. Will the Minister at least acknowledge that there is fresh and growing concern about the hospital downrating rules? They may have been around since 1948, and be based on the principle of avoiding double provision, but will she at least acknowledge that there is a problem in getting clear advice to patients while they are in hospital? Even when they are sick, they may still be worried about their benefit situation. As my hon. Friend the Member for Tiverton and Honiton (Mrs. Browning) said, there may be a particular problem in getting people back on to their benefits when they leave hospital. The process needs to be streamlined as much as possible, so will the Minister undertake to discuss the whole project in good faith with Age Concern and others who have direct experience of the human and practical implications?

Of course we have ongoing discussions with Age Concern and other organisations with an interest in these issues and we will certainly continue to do so. This rule has been in existence for 54 years; the Conservative party was in power for 35 of those years and did not do anything about it. However, I notice that the Leader of the Opposition's Parliamentary Private Secretary has signed early-day motion 542, so perhaps that signals a change in the Conservative party position. I remind my right hon. and hon. Friends about the Conservative party's views on bed and breakfast in hospital, which was reiterated as recently as Thursday in the other place.

Order. Perhaps we will leave that.

What plans he has to abolish the rule requiring pensioners to purchase an annuity by the age of 75 years. [28141]

It is important that pension funds built up with the support of tax relief are used to provide pensioners with a secure income in retirement. For the majority, buying an annuity is the best way of ensuring that they have a secure income throughout their retirement. We have no plans, therefore, to change that rule. The principle will underline the approach in the forthcoming consultation paper on annuities which was announced in the pre-Budget report last year.

Millions of pensioners will be disappointed with that answer and dismayed if the consultation paper rules out any reform of annuities. If the Government want people to save for their retirement, why do they not trust them to invest their savings in retirement? Will the Secretary of State and the Government support the private Member's Bill on annuity reform that received the overwhelming support of the House on Second Reading?

The Tories certainly turned up in force—that is true. The problem with the Bill's proposals and those which I suspect that the hon. Gentleman supports is that they would benefit only a minority of people who have retired. The average pension fund is at present some £30,000. Indeed, in the year 2000, the average amount used to buy an annuity was only £23,000. The proposals in the private Member's Bill and those commonly espoused by the Conservatives tend to be aimed at people who have pension funds of something like £250,000.

Does the consultation paper deal with the bizarre and unfair situation whereby, on the death of the annuity holder, the remaining capital reverts to the institution and not the family? If the Secretary of State believes that to be a matter for the insurance companies, will he, in the short term, take steps to change the rule under which the tiny number of schemes that enable people to allow an inheritance to pass to their family can operate only when the money is invested abroad? That seems quite wrong.

I shall not go into the detail of what the consultation paper proposes, for obvious reasons. The House will see it in the not-too-distant future. However, if we were to change the rules, with the result that more and more people, on their death, could pass the remaining part of their pension fund on to their children or whoever, there would be less money in the system, which would adversely affect annuity rates for people who are currently pensioners. That is why it is important that any changes that the Government make benefit the majority of people. It would be wrong for us to put in place changes, which I think are supported by the Conservative party, from which only a tiny minority of the population would gain.

But will the Secretary of State answer this simple question: why should a pensioner be obliged to buy an annuity if he or she has enough income to ensure that they will not be dependent on means-tested benefits? Provided that condition is met, what business do the Government have forcing them to buy an annuity?

The reason that people receive tax relief during their working life is to make sure that they can build up a pension for their retirement. Our concern is that if changes were made along the lines that I think that the hon. Gentleman supports, the majority of people would lose out because annuity rates would fall as a result of his proposals. That would not be a desirable course of events because it would mean—all other things being equal—that the state would have to pick up the bill for that change.

It is no good the Secretary of State hiding behind this tax relief. Let me quote from a letter from the former Economic Secretary, who wrote:

"there is no tax revenue reason why pension schemes should have to buy annuities."

To put the hon. Gentleman's latter point in its proper perspective, we are talking about a private Member's Bill and it is certainly true that many Conservative Members happened to find themselves in London at about 2.30 pm on that particular Friday. Such things happen; successive Governments have had that experience and we live with it, as the hon. Gentleman well knows.

If he will make a statement on the extent of and reasons for the irregular expenditure by his Department which has caused the Department's current financial statements to receive a qualified opinion from the Comptroller and Auditor General [28145]

The Department's accounts have been qualified since 1988 for two main reasons. The first is fraud and error. Despite the first-ever reductions in fraud and error, the levels remain unacceptably high. The second problem is the poor state of the Department's information technology, which makes it impossible to track payments through the system. That problem is being addressed by a multi- million pound investment programme that will steadily replace the Department's out-of-date computer systems.

I am grateful to the Secretary of State for his reply. Will he tell the House whether he has a target date for the publication of a set of accounts that are not qualified because of fraud? Does he understand how much hard work goes into earning the money paid in tax that his Department then loses? If he takes fraud extremely seriously, as he said in an earlier answer, will he explain why he has still not answered my written question of 8 January?

In relation to the written question, I shall certainly make inquiries to see what has happened.

My right hon. Friend has rightly said that none of us condones fraud. Does he think that there is full compatibility between computer systems in local authorities and various Departments using national insurance numbers to ensure that fraud is cut to an absolute minimum, by using those systems far more effectively than perhaps we have done in the past?

I agree with my hon. Friend. The short answer is no, the information technology systems are not compatible at the moment, but that will improve year on year. That is particularly important with regard to housing benefit for local authorities, but we are replacing the Department's entire IT system. That should have happened at least 10 years ago; it is now well under way, and it will have a significant impact on our ability to control fraud and error in the system.

Does the Secretary of State understand that no one will think his Department is acting properly so long as we receive letters from Ministers that include paragraphs and sentences such as this:

"To take no account of DLA or SDP would have significant expenditure implications for the ILF, and the Terms of Reference of the quinquennial review required of the ILF's policies"?

I hope that I did not sign that letter. If I did, I shall have another look at it. I do not understand it either, so I shall cause inquiries to be made.

What plans he has to increase the amount of personal advice available to unemployed people at job centres. [28146]

The Employment Service and those parts of the Benefits Agency that deal with people of working age are being brought together to form Jobcentre Plus. Some 56 Jobcentre Plus pathfinder offices have now opened, providing for the first time a fully integrated employment and benefit service. Reactions from individual customers and employers have been overwhelmingly positive. There will be a significant further roll-out of Jobcentre Plus across Great Britain from April this year.

I welcome my right hon. Friend's answer, but what extra help and support can be given to those people with disabilities or to carers who wish to go to work? I wonder what we can do.

There is a full range of services in the Jobcentre Plus network, and provided by the Department more generally, for those with disabilities and those who care for them. We find that carers tend to worry about their own prospects in the job market, as well as their responsibilities as carers. Very few of them are available for full-time work, but many are interested in part-time work. We also know from survey evidence that about million of those who currently receive incapacity benefit, and, in some cases, disability living allowance, would like to work if they had the opportunity to do so. The purpose of the new, new deal for the disabled, which is being piloted, is to try to help those who are disadvantaged in the labour market into the jobs that, with a bit of help and support, they can get.

What advice would those in jobcentres give to people such as Mr. Stephen Cann—one of my constituents—and a group of other long-term unemployed people from south-west London, who, having been expensively trained by the Minister's Department for 18 months as driving instructors, suddenly found a few weeks before the test that his Department had arbitrarily abandoned the course? In view of the information that I have given him, will he agree to investigate what seems to be a serious abuse of public money and a waste of people's lives?

I am grateful to the hon. Gentleman for drawing the case to my attention. However, for the sake of completeness, I should point out that he did so at 1.15 pm today. I am willing to consider the individual case, but it is very much the exception and not the rule. I will do what I can to help his constituents, because it is not the Government's intention that people should be left unable to complete their course because of a withdrawal of the project that was facilitating it.

My right hon. Friend will recall from his visit to the Jobcentre Plus in my constituency that it continues to provide an excellent service despite the fact that industrial action has gone on continuously since last September. Although I accept that there is undoubtedly a political element to the industrial action, does he agree that some of the people on strike have genuine and sincere fears for their safety as they administer the new system? Will he give an assurance and a guarantee that, as Jobcentre Plus is rolled out across the country, instances of misconduct and so on will be closely monitored and that the provisions, such as new security guards and closed circuit television, that have rightly been put in place to replace screens will ensure that those fears are ungrounded?

I regret the strike very much. The people who are on strike are our employees and they help to deliver public services. I would very much prefer for us all to work together for a common purpose. That common purpose must be the modified, modernised and unified service that we are providing through Jobcentre Plus. It is the Government's intention to roll out the Jobcentre Plus model right across the country and to maintain the very high standards that we had in place for the pilot schemes. Moreover, early evidence from the Jobcentre Plus premises is that open planning, the ability to make appointments and the modern and proactive way of working are welcomed by clients and have reduced the number of incidents that take place on the premises.

Is the Minister aware that, in my constituency of Wycombe, there is evidence to suggest that personal advisers have only an hour a week in which to follow up the cases of individual clients? Does he think that that is good enough? If not, what does he propose to do about it?

The Government are strongly committed to proactive working with jobseekers. If the hon. Gentleman sends me his evidence about the amount of time that caseworkers can spend on individual cases, I will be happy to consider it. However, I have no evidence to suggest that not enough time is being allowed to deliver the service in the modern way that the Government have set out.

I hope that the Government will be supported in these and similar policies. Does my right hon. Friend accept that, in a significant number of areas around the country, there simply are not enough jobs for the people who want to work?

There are localised difficulties in some parts of the country, mainly in those constituencies, such as my right hon. Friend's and mine, that were over-reliant on single industries. Of course, we realise that those communities face special problems, but none of that detracts from the generality of the Government's approach, which is that the jobs are out there and that, by proactive work, we can get the people into them. About 6 million of our fellow citizens changed jobs last year and we know of a third of a million job vacancies in the United Kingdom economy today. The jobs are there; we need to help people into them.

What assessment he has made of the impact the enactment of the Relationships (Civil Registration) Bill would have upon the work of his Department; and if he will make a statement.[28147]

The Department is participating in work across Government to review the Bill's implications. This work has just started and therefore we are not yet in a position to reach a judgment.

I thank my hon. Friend for that encouraging reply. He will know that some 88 per cent. of pension schemes in the private sector make provision for unmarried partners. He will also know that in the House last year, hon. Members voted to provide that protection in our households, should we wish it. Does he agree that the continuing deliberations in his Department should take into account the fact that to seek to deny to public sector workers what we have awarded to ourselves is nothing short of bad faith?

Occupational pension schemes need to make their own judgments and examine the cost implications of those. Our review has only just started. It is important that we think the matter through carefully in terms of trends and many other issues. As I said, we are not yet able to reach a judgment, but the review is ongoing.

Given the new research from the Office for National Statistics, which shows that children of married couples are half as likely to see their parents separate as children of cohabiting couples, and given that the report on the costs of family breakdown for the Lords and Commons family and child protection group conservatively estimates the costs of family breakdown—not least to the Minister's Department—to be about £15 billion a year, will the Minister be circumspect about the registration of civil relationships, not least because the country is unlikely to be able to afford it?

Before entering the House, I spent 10 years at the Family Policy Studies Centre examining such issues. I understand that children from all sorts of family backgrounds are often the victims of the revolution that has affected family life in this country and many others. I do not think that the issues are directly relevant to the review that we are undertaking, on which we shall deliver a judgment when we can.

If he will make a statement on the number of people in employment in the United Kingdom. [28148]

The number of people in employment is 28.2 million—a new record level. There are 252,000 more people in work than a year ago, and 1.33 million more than in 1997. We are committed to employment opportunity for all, which is why we have introduced Jobcentre Plus, extended the new deals, increased the number of action teams for jobs and introduced the rapid response and StepUp initiatives.

I thank the Minister for that reply. Can he explain why unemployment under both the claimant count measure and the International Labour Organisation's measure has been rising for more than three months? Why is it that unemployment is going up on this Government's watch, and what are they doing about it?

It is always disappointing to hear of rises in unemployment, but the hon. Gentleman must put it in context. We have record levels of employment in the economy. Some 6 million people changed their jobs in the last year, reflecting the mobility in the labour market. For the hon. Gentleman to suggest that that is evidence of a growing national crisis is very mistaken.

I hope that my right hon. Friend remembers with fondness his trip to South Tyneside on 7 January. It included a visit to the action team for jobs that is helping to tackle unemployment and raise employment in a part of the country that has not yet benefited as much as it might have from the economic growth of which the Government are justifiably proud. Has he had a chance to think about the plea from that action team to extend its service from just six wards to the whole borough?

Yes I have, although I cannot make an announcement on that today. I was very impressed by the work that I saw being carried out by the action team in my hon. Friend's constituency. It deals with an employment base that I know well, as it is very similar to the constituency that I represent on the other side of the river. There are structural difficulties with the labour market and yet local people, making the best possible use of the Government's initiatives, are working hard to overcome them. I congratulate everyone involved.

What targets his Department has to increase private pension provision. [28151]

As I said in November—it seems such a long time ago.[Laughter.] A civil servant with a sense of humour. As I said in November, we are committed to encouraging private saving to meet the long-term challenges of an ageing population, and we remain committed. That is why we are introducing the pension credit, making sure that it pays to save, and why we have introduced stakeholder pensions, which are a secure, value-for-money method of making private provision. We have launched the simplification review to reduce the layers of regulation which increase costs; we have replaced the minimum fund requirement; and we are implementing the recommendation of the Myners review. Our pension education campaign is driving home the message that saving now is the best way to guarantee security tomorrow.

I think that that means the Minister accepts that the success of private pension provision is an essential national economic interest, not only for the future wealth of pensioners but because it has to date given the United Kingdom vastly more resources to invest in the UK and around the world than are available to equivalent countries in the European Union. All that is threatened by the triple whammy of increased regulation, the taxation of pensions and the fall in annuity rates. Does the Minister accept that if policy does not change, we will be on our way to a long-term calamity of missed opportunity in this area?

As far back as the 1960s, generations of colleagues on this side of the House have been in favour of a robust private sector. I remind the hon. Gentleman that the last Conservative Administration, rather than bolstering savings for pensions, got involved in the mis-selling of tens of thousands of pounds worth of policies. It has taken this Government to replace that resource because of what the Conservatives did and the shambles that they left behind.

What measures will the Government take to deal with the abuse of final salary pension schemes? In the past eight months, workers at two companies in my constituency have discovered that their final salary schemes have become almost worthless. Last week, in an Adjournment debate, we heard about the problems that have arisen throughout the country concerning United Engineering Forgings, which has gone through exactly the same process, along with five or six other companies including Chesterfield Cylinders in my constituency. No laws were broken; it was effectively legalised robbery of private final salary pension schemes into which my constituents had paid, in some cases for up to 35 years, only to find that most of their money had gone when it came to the pension scheme paying out. That has also happened to other firms—

Order.

I suggest that the hon. Gentleman puts in for an Adjournment debate, so that we can openly debate the specific circumstances. If he wants to raise issues concerning a particular company, he is welcome to write to me. We take strong action on these matters, which is why we have OPAS, the Office of the Pensions Advisory Service, and OPRA, the Occupational Pensions Regulatory Authority, and we have set up a quinquennial review on pensions. We are committed to ensuring that we assist pensioners by trying to rub out fraud wherever it takes place.

What progress has been made in reducing benefit fraud since June 2001. [28152]

As my right hon. Friend the Secretary of State made clear earlier, we have already delivered an 18 per cent. reduction in the level of fraud and error in the payment of income support and the jobseeker's allowance—that is against a target of 10 per cent—and we expect that good progress to continue. From April, we will begin to implement new powers in the Social Security Fraud Act 2001 which will further strengthen our fight against fraud.

The level of benefit take-up in my constituency is remarkably low compared with the level of need, which is due in part to the complexity of the application process and to the complexity of individuals' own circumstances. Does the Minister recognise the strong link between the reduction in benefit fraud and the release not only of additional funds for genuine claimants but, as my hon. Friend the Member for Wycombe (Mr. Goodman) pointed out earlier, of additional time to enable social security staff to deal with the very complex needs of genuine claimants?

The purpose of Jobcentre Plus is to do precisely that. We need to ensure that everyone behaves responsibly by claiming only the benefit to which they are entitled and no more, and that everyone is clear about the fact that they have the right to claim their entitlement. That is our aim throughout our entire modernisation programme. However, let there be no mistake—fraud is a major problem. We are not complacent, but the targets have been exceeded and we are beginning to win the war against the fraudster. The whole House must join in that endeavour, so that the money raised by taxpayers can be spent on the priorities, not on the fraudster.

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss amendment No. 1, in clause 2, page 2, line 24, leave out "2003" and insert "2004".

The significance of the date proposed in the new clause is that that is the beginning of the first financial year to which the Bill applies—namely, the coming financial year. Amendment No. I returns to an issue of great concern in Committee—that is, whether the Bill could be delayed for a year while we absorb the lessons and conclusions of the Government's civil defence review.

"a clear consensus is emerging".—[Official Report, 28 November 2001; Vol. 375, c. 1016.]

I agree with the right hon. Gentleman that civil defence emergency planning has not been at the forefront of people's minds. It has been difficult for those of us who represent high-risk constituencies to raise the profile of such planning in this place. Why is he arguing for delay in respect of these powers, which clearly stem from a court decision? Would not delay mean a vacuum?

The hon. Gentleman must wait a little so that I can develop my argument. I know his constituency area well and I entirely sympathise with him; there is considerable danger of attack on installations in that area and that is why he takes a close interest in the matter. Indeed, I shall refer later to a question that he put recently on the subject.

As someone whose constituency is very close to Heathrow airport, I would argue that it is better to take time, as the right hon. Gentleman suggests. The status quo will continue while the review is being carried out. Does he agree that the effect of the Bill might be to reduce the amount of money available, so the status quo is better than a reduction?

:Yes, indeed. That is a perfectly reasonable argument. I shall shortly address the question of whether less money will be available as a result of the Bill, but I return to the basis of my argument for the new clause—at the very least we need to know the implications of the Government's review for the Bill, and it would be better if those new arrangements could be put in place before fitting the funding around them. I was reviewing what has happened during this process.

I appreciate what the right hon. Gentleman says about foot and mouth disease. Clearly, that was a major disaster, particularly in Northumberland, in Cumbria and in the constituency that he represents. However, on the basis that such emergencies occur, we hope, only once in a lifetime—indeed, the previous occurrence took place 34 years ago—what training realistically could be undertaken by local authorities to ensure that staff would not be inevitably transferred from trading standards or other sub-departments to deal with that specific problem, rather than a general emergency issue?

We in Northumberland may take some wry amusement from the suggestion that foot and mouth has broken out once in lifetime; it has broken out twice in a lifetime for us. It happened in 1967, when a lot of lessons were not learned, and we want them to be learned this time.

The right hon. Gentleman referred to public consultation. Although in some respects I accept his remarks, does he not accept that post-11 September, some of the issues relating to the emergency planning that identifies specified sites are best dealt with outside the public domain?

That is most certainly the case. If I had not known already, my experience on the Intelligence and Security Committee would have provided me with many reasons to be aware of that point. It means that local authorities must have staff who are experienced and can be trusted with relevant information that cannot be placed in the public domain. All that requires care, and to do something on an absolutely secure basis often takes a little longer and requires a little more effort and organisation than if it were carried out on a more general basis.

"This short, technical Bill would enable us to return to the funding levels for the Civil Defence Grant."

Does the right hon. Gentleman agree that there is something to commend in the findings of the Emergency Planning Society, which has asked the Government to commission an independent inquiry into the appropriate level of costs for the services?

We would all feel much more comfortable about such an important matter if we knew that the total amount had been independently determined by another voice. That is not necessarily the only way to achieve an outcome, but I would not complain if the Government chose to take that course. The new clause and the amendment in particular would enable the Government to do that. It would give them a bit more time to maintain the present arrangements, which is, after all, what they have really said that they will do.

hope that the right hon. Gentleman will take my criticism of him in the spirit in which I mean it, but he was nothing like rude enough about the SSA approach to spreading money around the country. Does he agree that it is daft to apply that approach to this case, because it implies that the money will be spread around all authorities? My experience of flooding and other disasters is that they do not spread themselves across every county council and borough in the land. Instead, they are focused in an area. Although that area needs a lot of money, others do not need any.

I am not sure that I entirely agree with the line of the hon. Gentleman's argument, although I agree that no criticism is sufficient for the SSA mechanism. I merely did not want to stray too far from what is appropriate in the debate. Were the money to be distributed according to that formula, the impact on Northumberland and Somerset, to give just two examples, would be appalling if we consider the disparities in education spending between those authorities and the national average, all helpfully set out in another parliamentary answer last week that reveals the true horror of the SSA.

I appreciate the tone in which the right hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke to the new clause. I followed his arguments in part, but I disagree with his conclusion.

"A Review into … emergency planning is under way, the result of which is likely to be emergency planning legislation."

There is little doubt that, since 11 September, many parts of the country have been on a heightened alert. However, many local authorities, particularly those in central London such as the City of London and the city of Westminster, which I represent, have been able to cope relatively well and with relatively little upheaval for much of the residential and large tourist populations because the world did not change to such a great extent. Over the past 30 years, people have become accustomed, particularly in mainland Britain, to confronting the terrorist threat. Important as these provisions are, we should not operate on the pretext that the world has changed for ever.

I shall not get drawn too far into that discussion, Madam Deputy Speaker, or you will rule me out of order, but I have to disagree with the hon. Gentleman. The nature of warfare has changed since 11 September, and I suspect that the Intelligence and Security Committee, on which the right hon. Member for Berwick-upon-Tweed sits, has been discussing that in great detail.

Given his earlier remarks about petrochemical plants in Cheshire, the hon. Gentleman will not be surprised to hear that when my office contacted the Cheshire county emergency planning officer to ask his views on the Bill, he raised precisely those points. Does he, as a Cheshire Member, agree with that officer that the grant mechanism that the Government should draw up should take into account the different degrees of threat affecting local authorities, and should not simply he per capita or based on acreage?

If I can do so without stepping outside the context of the Bill, I will deal in some detail with that argument because there are some important points to be made.

I appreciate the hon. Gentleman's point that if a long-term review is about to come out, it is sensible to get all our ducks in a row, as it were. But what has he to say about the fact that the Ministry of Defence, in the short to medium term, is producing an extra chapter for the strategic defence review arising out of the events of 11 September? That will come through quite quickly. Is not the proposal of the right hon. Member for Berwick-upon-Tweed (Mr. Beith) sensible, given that the conclusions of the MOD study will become available in the extra year, even if we have to wait longer for the final results of the long-term review?

I am glad that there is some recognition among Opposition Members that my earlier point was correct, and that the events of 11 September changed things.

The hon. Gentleman refers to the here and now, and we all understand that. I accept that there have been changes since 11 September. However, reviews are taking place that take into account responses since that date.

"As part of the wider review, is it possible that the new system that will be implemented by the Bill will be abolished and reviewed again?"—[Official Report, Standing Committee E, 11 December 2001; c. 23–24

I think—I believe that the right hon. Member for Berwick-upon-Tweed agreed with the observation—that we do not spend enough time considering potential civil emergencies. Even if the Bill has a short life, I consider that it is necessary in the context of the here and now. It would be far better to get the issue out of the way by focusing the attention of the entire House, including Members with military expertise and those with expertise in agriculture or river systems, for example, on it. The same goes for industrial experts who can deal with potential chemical risks. We must work together to try to find a consensus on the right way forward.

Would not capping the amount of money that goes to civil defence, as the Government propose, make it more difficult to decide how much money there should be for, say, safeguarding installations?

I told the hon. Member for Westmorland and Lonsdale (Mr. Collins) that I would come to that and its relationship to the standard spending assessment. Before doing so, I shall conclude my point about why we need to introduce the Bill, then consider how to join up facilities better.

I shall focus on amendment No. 1 and I hope that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) does not press ahead with the new clause, because that might prevent us from voting on the amendment. I hope that there is a vote, because the amendment is the important measure.

Is not there a contradiction in the hon. Gentleman's argument? The implications of 11 September for emergency planning were profound. Some of the assumptions that underpin such planning may have shifted and the threat of terrorism may have upped the ante, so we need to act quickly. It is right to close loopholes and undergo reviews, and we may want to consider other issues in the future, but to argue that we should wait until 2004 when we may want to deal with some profound issues quickly is perhaps contradictory.

If that were the case, the hon. Gentleman would be right, but I do not accept that there are loopholes. If there are, this measure seems to close only one by ensuring that there cannot be any more money. In fact, there will not be as much.

My hon. Friend may have noticed that the Government, in their explanatory notes, say:

"The Government believes the effect of the … Bill will be to prevent unexpected increases in costs".

My hon. Friend is right. I agree with the hon. Member for South Dorset (Jim Knight) that other issues will need to be addressed, but my argument and that of the Liberal Democrats is that, while we are addressing the issues that the hon. Gentleman is concerned about, we should maintain the status quo. As my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) said, as a result of the Bill we will have the money we need—rather than less money—while we examine the loopholes.

Perhaps the hon. Gentleman could help me. I agree with his comments on the SSA. The Dorset SSA is appalling, and I am sure that we would all argue that our own SSAs do not work because the system is a bit of a joke. However, nowhere in the Bill does it say that the Government cannot increase funding. It just says that the Government should

"determine the aggregate amount of grants to be made".

I accept the principle that it is necessary to be very careful with blank cheques. My hon. Friend the Member for Westmorland and Lonsdale will deal with instances in which money will be cut. I can only say, on the basis of my experience of local government—for instance, on a fire brigade committee—that there may sometimes be an argument for, as it were, a limited blank cheque. From the moment that a disaster occurs, we cannot afford to sit down and say "We will respond, within the limit made available by the Government." That is not the way in which disasters should be handled, but if I understand the Bill correctly, it will force us into such a position, at least until the Government have completed their review of SSAs.

With respect, I think that the hon. Gentleman has misunderstood the Bill. It is about the planning process. No one is saying—no Labour Member has ever argued, and the hon. Gentleman's party never argued when in government—that local authorities faced with serious emergencies such as those that he cites should not respond adequately to meet public needs at any given time.

I hear what the hon. Gentleman says. Perhaps the Minister will tell us that the Home Office view—expressed in 2000—that £14 million was enough has now been scrapped. Perhaps he will tell us, in that case, how much more will be provided. Until I hear how much more will be made available following 11 September, however, I will take it that £14 million is all that is available, and that is not adequate.

I refer the hon. Gentleman to what the right hon. Member for Berwick-upon-Tweed (Mr. Beith) said about a written answer that I was given last week.

I look forward to reading what was said.

My hon. Friend will doubtless agree that Labour Members are making an extremely powerful case for amendment No. 2, which proposes that only increases can constitute in-year alterations to legislation. We look forward to their support in the event of a vote.

My hon. Friend has a great deal more courage than me. Although I was aware of amendment No. 2, after 14 years I have learned that those who stray on to an amendment that is not in the group under discussion are rapidly told off. I may say something about amendment No. 2 later.

My hon. Friend has given a very good, practical and specific example from the past few months. Does he agree that if this whole process is to be, as it is at the moment, demand rather than needs-led, we need at this juncture to have an entire rethink, which will inevitably take some time? It is particularly important to gain a sense of perspective beyond what has happened just in the past four months and look towards getting some pattern—inevitably, it will be a flexible pattern—into place for the years ahead to ensure that we have the right formula.

My hon. Friend is right. He may be amazed to discover that the Government agree with him. They set up their 10 working groups to carry out exactly that process. He is right to say that it should be completed before we embark on legislation of this sort.

Like most hon. Members here, I have concerns about emergency planning. I sit on the Select Committee on Defence, which as I am sure the House is aware, is reviewing the defence and security of the United Kingdom and emergency planning. The civil contingencies secretariat is very much part of that review but I support this legislation because it is right to end the blank cheque to local government.

I think that the hon. Gentleman slightly misunderstands the present situation. He is surely not suggesting that the Government are allowing local authorities to spend whatever they like. In fact they are engaged in regular consultation with local authorities to try to ensure that the funding that they provide is appropriate to an authority's needs.

Different people have given me different interpretations of the system. I have spoken to some people who are basically saying that currently it is so confused that they can go ahead and spend and Government will have some obligation to reimburse.

It is not as simple as that. The first £25,000 is paid for by the local authority, and if that is a shire district that is a substantial amount. Under the Bellwin system, above £25,000, only 80 per cent. is clawed back, so local authorities are responsible for large elements of the money.

I accept that, but there is a danger that if we leave open the loophole, local authorities—seeing 2004 on the horizon—will have a spending bonanza, buying everything that they need to cope with a threat.

The hon. Gentleman takes a cynical view of local authorities. I suspect that, like me, he has been a member of one and remembers the mad dash in the 11th or 12th month of a year to see which road-widening scheme, for example, is required. I can appreciate that the Government, understandably, take the view that they want to cap expenditure, to an extent, and do not want it to spiral out of control. But does not the hon. Gentleman see that given that the average over the past three or four years has been around £14 million, and is to be nearer £18 million for this year, and given all the disaster and emergency planning that has had to be planned for during the past 12 months, most people outside would think that a relatively small increase from £14 million to £18 million was reasonable—

Order. Interventions should be much briefer.

Does the hon. Gentleman feel therefore that—

Order. I call Mr. Knight.

I shall try to pick away at what the question might have been. I would not be happy to see funding continue at £14 million and I am happy to see that increase.

Will the hon. Gentleman give way?

I have been generous in giving way and I would like to make progress. However, I will give way to the hon. Gentleman, who has such a pleading face.

I am only asking the hon. Gentleman to extend to me the courtesy that I extended several times to him. I warn him that I may have several more interventions to come. I thought that I was cynical but I have heard a level of cynicism from him that I could not surpass. His suggestion that local government will have a spending spree over the next couple of years if we pass the amendment, and will stoke up natural disasters so that it can put in bills, is the sort of cynicism that I am surprised to hear.

I have spoken to the chief fire officer in Dorset and to chief executives of local authorities, and they have a number of concerns relating to various threats. My constituency office is on a site that is regulated by the nuclear installations inspectorate which, in turn, is policed by the nuclear police. They have concerns in terms of biological, nuclear and chemical threats. If every authority thought that it needed more suits, showers or other things, the bill could get out of control. We may need an assessment of where the risks really are in order to balance the priorities. That is not total cynicism, but I know how strapped for cash local authorities can be. If they see a window and a chance to get what they need, they might leap through it without looking first.

New clause 1 has enabled us to have a useful discussion about the current status of the Government's civil defence review, which, of course, started long before the events of 11 September but has no doubt been greatly informed by them. I have some questions for the Minister about that. I agree with my hon. Friend the Member for Spelthorne (Mr. Wilshire), however, that amendment No. 1 has the stronger case behind it. It is similar to points that my right hon. and hon. Friends and I raised at earlier stages of the Bill's consideration, and were it to be pressed to a Division, we would be inclined to support it.

"The overall effect of floods, fuel supply problems, foot and mouth and the increased terrorist threat have demonstrably increased the workloads of local authority emergency planning officers … We believe there is now a significant shortfall in the numbers of personnel required to prepare and maintain plans, provide adequate training and respond to emergencies of an increasingly more frequent nature".

As the hon. Gentleman is praying in aid that letter, with its reference to fuel supply problems, will he now condemn the people who sought to create emergencies in my constituency?

I am not sure whether we should go too far into who was responsible for what in connection with the fuel shortages in September 2000. I shall take the hon. Gentleman's attack on successive Labour Budgets in the spirit in which it was intended.

"was set in March, and does not take account of the increased workload of emergency planners due to foot and mouth, flooding, more recently the increased terrorist threat … The Bill is particularly disappointing for practitioners after all that has happened this year. There is 100 per cent. support for positive emergency planning legislation arising out of the emergency planning review, but we are told that it may take three or four years to get that … We are crying out for positive legislation but instead they"—

"are insisting on pushing through this piece of negative legislation."

"The legislation sends the wrong message at the wrong time and suggests that they mistrust emergency planning officers by saying that if we are allowed to apply for funding we will apply for too much."

Will the hon. Gentleman give us an insight into the view of the official Opposition on which formula might replace the current one? That might enlighten our debate.

I am grateful to the hon. Gentleman for that question, although I was under the impression—perhaps mistakenly—that all my remarks clarified the view of the official Opposition on these matters.

We have been debating new clause 1 and amendment No. 1 for some time and many issues have arisen. I shall try my best to address many of them, not least because certain hon. Members seem a little confused about the Bill's purpose, so I should like to elaborate on it and perhaps remind them of the debates that took place in earlier stages. It is interesting that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) now speaks for the Liberal Democrats on the Bill, given that the hon. Member for Winchester (Mr. Oaten) did so in Committee, and the hon. Member for Bath (Mr. Foster) on Second Reading, so there may have been a reshuffle.

There has.

I missed it. I apologise to the right hon. Gentleman and congratulate him on his new position. I am sure that the usual courtesies will apply in future debates.

The hon. Gentleman may care to predict who will handle the debates on any Lords amendment to the Bill on behalf of the Liberal Democrats.

Or even on Third Reading.

Or even on Third Reading, as my hon. Friend says.

Perhaps the Liberal Democrats have the hon. Member for Shrewsbury and Atcham (Mr. Marsden) in mind as a replacement in the next reshuffle.

I am afraid that I cannot recall that constituency at the moment.

Of course, I carefully read the reports of the proceedings in Committee and on Second Reading, and I referred to them in my remarks, as well as to the forecast made by the Minister's predecessor, who was in the Home Office, that the Bill would enable a reduction from £19 million to £14 million in the amount spent. However, does he not recall the answer given to the hon. Member for Ellesmere Port and Neston (Mr. Miller) in which it was not made clear whether any formula would be applied in the coming financial year? It merely said that £18.6 million would be the approximate figure. The Government have clearly not decided whether to use a formula in the year that we are discussing.

Of course, I recall the answer that was given to my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller)—I gave it. The right hon. Gentleman wonders whether we intend to impose a formula for the next financial year, but that is essentially the entire purpose of the Bill. As I shall say in discussing amendment No. 1, we need to have a framework for the next financial year, so that we can ensure that the money is distributed fairly. Without that framework, we shall continue with the haphazard, demand-led system, which is not compatible with a nationally strategic approach to distributing the grant.

The Minister will know that emergency planning officers will pore over these proceedings with particular interest, so will he clarify two points? First, if it turns out that the figure of £18.6 million is slightly below actual expenditure in the current financial year, will he assure us that whatever formula the Government use will ensure that the finance available in the next financial year will be varied accordingly? Secondly, will he tell us which financial formula he has used to work out the figure? That question was asked by the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and it is nice that the Minister has come up with a formula that appears to be almost identical in cash terms in one financial year after another. What is the basis for it?

As I was trying to explain, we now know that payments of £16.7 million were made in October, which is 90 per cent. of the likely total. That brings us close to the figure of £18.6 million. However, that does not mean that we have a formula for the next financial year. That is what we are working on now, and that is the purpose of the Bill. I have referred to the aggregate grant level and, in seeking to resolve the question of finance, the figure of £18.6 million is likely to be the same as for this financial year.

Is the formula, whatever it is, designed to preserve roughly the distribution that authorities have now or is it likely to lead to a redistribution of the £ 18.6 million figure between authorities?