THE PARLIAMENTARY DEBATES
OFFICIAL REPORT
IN THE FIRST SESSION OF THE FIFTY-SECOND PARLIAMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND [WHICH OPENED 7 MAY 1997]
FORTY-SIXTH YEAR OF THE REIGN OF HER MAJESTY QUEEN ELIZABETH II
SIXTH SERIES
VOLUME 297
FOURTH VOLUME OF SESSION 1997-98
House of Commons
Monday 30 June 1997
The House met at half-past Two o'clock
PRAYERS
[Madam Speaker in the Chair]
Oral Answers to Questions
SOCIAL SECURITY
Pensions
1. Mr. Terry Lewis: To ask the Secretary of State for Social Security what plans she has to encourage people to take out value-for-money pensions.[4334]
The Parliamentary Under-Secretary of State for Social Security (Mr. John Denham): We want to ensure that all pensioners can share fairly in rising national prosperity. We will support and strengthen the existing framework for occupational pensions. We will develop stakeholder pensions to offer secure, flexible, value- for-money pensions, particularly to those who cannot join an employer's occupational pension scheme, or whose pay is low, or who have intermittent wages, and for whom personal pensions may therefore be unsuitable.
Mr. Lewis: I thank my hon. Friend for his answer. Over several years, there has been a sad decline in the membership of occupational pension schemes. How will my hon. Friend tackle the effects of, for instance, the flexible labour market on the membership of such schemes?
Mr. Denham: My hon. Friend is right: there has been a sharp decline in the membership of occupational pension schemes, particularly among men. Part of that was caused by the mis-selling of personal pensions to members of occupational schemes. I am sure that my hon. Friend will welcome the action that my colleagues in the Treasury are taking to sort the problem out.
Many people in the flexible labour market cannot join an employer's occupational scheme, because there is not one on offer. They may be badly hit by high fees and charges for existing personal pensions. It is to give those people some of the advantages of occupational pensions that we wish to develop stakeholder pension schemes.
Mr. Brooke:
Does the Minister acknowledge the international recognition of the extremely sound basis of British pension provision, as endorsed by a recent report by the International Monetary Fund? Will he give an assurance that in no particular will the Government threaten the soundness of that basis?
Mr. Denham:
It is certainly true that the size of funded occupational pensions is a strength. Occupational pensions have always been supported by Labour Governments; indeed, membership of occupational pension schemes has peaked under Labour Governments and declined under Conservative Governments. I hope that the strength of the British pension scheme in that regard will continue to be recognised, but we must tackle the problems faced by people who have no opportunity to take advantage of a good, value-for-money employer's occupational scheme.
Mr. Olner:
Will the Minister also take account of the huge black hole that has been created by the fact that many workers are now on temporary wage contracts, and cannot enter occupational pension schemes? Will he do anything to remedy the problem?
Mr. Denham:
My hon. Friend is right to raise that issue. It is one of the difficulties to which I have been referring. Some of the personal pension schemes that are currently on the market will impose very high charges, and will take a large proportion of people's savings if, for example, they can enter and stay in the schemes only for a few months or years. That is why the Governmentplace emphasis on developing value-for-money, flexible schemes that will not unfairly penalise people who change their jobs or spend periods outside the labour market.
2. Mr. Lansley:
To ask the Secretary of State for Social Security if she will make a statement on her policy on benefits for lone parents.[4335]
The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman):
The Government believe that work is the best form of welfare for people of working age, and we are committed to a package of measures that will help lone mothers to move off benefits and into work so that they and their children can be better off.
Decisions on benefits for lone parents will be announced at the time of the Budget.
Mr. Lansley:
Does the right hon. Lady agree with her right hon. Friend the Member for Birkenhead (Mr. Field), who said:
Mr. Lansley:
Thank you, Madam Speaker. The right hon. Member for Birkenhead made it clear that he felt that a policy of differential benefits for lone parents should be abolished. Will the right hon. Lady now say that she will provide the same benefits for two-parent families as are provided for lone parents?
Ms Harman:
What we are concerned about is the differential in opportunities between married or cohabiting women and lone mothers. When her youngest child reaches the age of five, the married or cohabiting woman will often start to look for work. When she is able to go out to work and contribute to her family budget, the family is better off. However, lone mothers remain trapped on benefit and after 18 years of Conservative Government policies, about 1 million lone mothers are on income support and bringing up 2.2 million children on the breadline. We want to ensure that lone mothers have opportunities to work so that, like lone mothers in the rest of Europe, they do not have to bring up their children on benefits.
Mr. McAllion:
Like my right hon. Friend, I accept that the best policy on benefits for lone parents is to help them to get off benefit and back into work. Bearing that in mind, will my right hon. Friend reflect on the predicament of the Whitfield sitter service and Whitfield community nursery in my constituency, both of which provide affordable, quality child care to lone parents to enable them to get back into work? Because their urban programme funding runs out this year, both those organisations face closure later this year.
Does my right hon. Friend agree that it would be wholly counterproductive to allow such excellent organisations to close because of a lack of public funding when their closure will inevitably force lone parents out of work and back on to welfare, leading to an increase in public expenditure, which I am sure neither my right hon. Friend nor the Chancellor wish to see?
Ms Harman:
I thank my hon. Friend for raising the issue of Whitfield community nursery in his constituency. He is right to say that child care is essential to underpin the opportunities for lone mothers to go to work. That is why the Government consider the national child care strategy to be of central importance. It will ensure a choice of affordable, high-quality accessible child care so that lone mothers can be sure that, when they go to work, their children are playing and learning safely with other adults. Together with my ministerial colleagues, I shall look into the issue of the nursery in his constituency.
Mr. Duncan Smith:
May I take this opportunity to welcome the Secretary of State and her Ministers to their places and wish them the best of luck? We shall try to be constructive in opposition and shall look at each of the Government's proposals on its merits. However, we shall also judge them against the high level of expectation that they raised in the run-up to the general election.
Many times in the run-up to the election, the right hon. Lady, made it quite clear that she did not believe in equal benefits for single and two-parent families. She has made it clear that she would reverse the Conservative Government's proposals. However, as my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) has said, on 28 November the Minister of State made it quite clear that he took a different view.
It is becoming increasingly clear that the right hon. Lady is unlikely to have her way in the Department in this case. Is she absolutely determined to stand by her commitments to reverse what we instigated and, if she does not get her way, what will she do?
Ms Harman:
I welcome the hon. Gentleman and his shadow colleague to their new positions. I also welcome his statement that he will make constructive proposals and engage in constructive debate. If the hon. Gentleman considers what I said in the run-up to the general election and looks at Labour party documents from that time, he will see that our approach was made absolutely clear. We want what lone mothers want for themselves and their children, which is to be better off in work than on benefit.
"Tax and benefit policy was squeezed to help single parents"--
Madam Speaker:
Order. Hon. Members do not quote at Question Time. Paraphrase, please.
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