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Mr. Blunkett: Yes, I agree. That shows the sheer, naked opportunism of the amendment last night in the other place and of the private notice question this afternoon.

Sir Teddy Taylor (Rochford and Southend, East): Everyone seems to be criticising the Secretary of State. Is he aware that in Southend-on-Sea we have no fear of democracy. We have a unique system, with 25 per cent. of our children going to grammar schools and getting opportunities that they would not otherwise have? We have gained the clear impression that the right hon. Gentleman has become more understanding and positive about our situation. Bearing in mind the fact that our unique 25 per cent. system produces results for all children in all areas and provides opportunity, is he willing to come to Southend to visit one of the schools? May I assure him that he would get a great welcome?

Mr. Blunkett: How could anyone refuse such a warm embrace? Certainly not my right hon. Friend the Minister for School Standards, who was in Southend last week to celebrate the education action zone. We wish those in Southend well, as we wish the top 25 per cent. well throughout the country in comprehensive schools who get five or more A to C grades.

Mr. Ben Chapman (Wirral, South): Is my right hon. Friend aware that for proof that the Government are about standards rather than structures, he need look no further than the grammar schools on the Wirral, which provide

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an excellent standard of education? Does he also understand that this is not a matter for exclusivity? Excellence can sit alongside excellence and does so in the Wirral in the form of, for example, Bebington and South Wirral high schools and Plessington Roman Catholic high school.

Mr. Blunkett: When my hon. Friend was elected, I was pleased to be in his constituency at Wirral grammar school for girls, particularly as it was when the right hon. Member for Bromley and Chislehurst (Mr. Forth), who was then an Education Minister, was trying to break in through the gate and was being ejected by the governors and staff. I repeat what I said then: we welcome excellence in those schools and their willingness to share what they are doing with the wider community.

Mr. Nick St. Aubyn (Guildford): If the Secretary of State is serious about his project for city academies, will he accept my invitation to visit Guildford, where a private sector company founded by a city technology college is turning around a failing school, which our Conservative local education authority inherited from its Lib-Lab predecessor? Will he accept my regrets that it has taken him two years to understand what I have been telling him--that Conservative policies on failing and inner-city schools are the best for Guildford and for Britain?

Mr. Blunkett: I think that one has to have had different experiences to describe Guildford as the inner city, but nevertheless, as Kings Manor school progresses I will happily consider an invitation to visit it and find out what the staff, governors and non-teaching staff are doing. We are trying to tackle deep-rooted failure through diversity--it does not matter which authority, or its political complexion. However, when Surrey county council talks about failure, it must examine its own part in letting down schools such as Kings Manor. In that context, we will take action from the centre to ensure that no child is left in a failing school simply because the authority has failed to live up to expectations.

Charlotte Atkins (Staffordshire, Moorlands): Does my right hon. Friend remember the Opposition pledge for a grammar school in every town? If that were to be the case, which of the two excellent comprehensive schools in Leek would they choose to be the secondary modern--Westwood high or Leek high?

Mr. Blunkett: I do not think that I had better second-guess that proposition. Fortunately, as I am in favour of supporting both those excellent comprehensive schools, I do not have to do so.

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Inherited SERPS

3.59 pm

The Secretary of State for Social Security (Mr. Alistair Darling): With permission, Madam Speaker, I would like to make a statement on entitlement to inherited state earnings-related pensions.

Fourteen years ago, the previous Conservative Government made a series of pensions policy changes, which they took through Parliament. One of those changes meant that, from this April, a husband or wife could inherit a maximum of one half of their spouse's SERPS entitlement.

The Department of Social Security published the correct information for about a year after the policy change. Pensions professionals also knew about the change. However, it is clear that, from early 1987 until 1996, DSS information leaflets were issued that did not refer to it. Furthermore, it is clear that wrong information was given to a number of people by some Benefits Agency staff during that period, and for some time thereafter. There is no doubt that, as a result, some people were misled, and so could have lost out.

The giving of wrong information by a Department is inexcusable. There is a clear responsibility to ensure that the information that Departments provide is accurate and complete. In this case, it was not. Furthermore, even the serious implications of giving the wrong information were not appreciated by the Department. That should never have happened. The previous Government should have sorted the matter out years ago.

Three reports are being published today. The first is the ombudsman's investigation of four sample complaints. The second is the Comptroller and Auditor General's report on what happened and on the action needed to prevent a repetition. The third is from the National Audit Office, which, at my request, also carried out a joint review, with internal audit, of the DSS management during the relevant period. Together, the reports provide a damning indictment of what happened over those years. All the reports will be available in the Library and Vote Office.

I intend to accept all the recommendations made by the NAO and the ombudsman. I can tell the House that I propose to go further in two respects. I shall, of course, respond to additional recommendations that might arise from any subsequent Public Accounts Committee or Select Committee investigation.

Before I turn to the steps I am taking to ensure that the problem does not happen again, I shall set out my proposals to provide redress for those who lost out.

First, certain groups cannot be affected in any way. They include people who would have retired before SERPS was introduced, single and divorced people; and those who have already been widowed.

Secondly, the policy change due to come into force this April will not come in until 6 October 2002--in two and half years' time. Because of that, anyone who is widowed before October 2002 will not be affected; their spouses will still be entitled to inherited SERPS under the current rules.

Thirdly, we shall also provide redress for those people who were wrongly informed and who, had they known the true position, might have made different arrangements.

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Ministers have approached the matter in the following way. As a matter of principle, we believe that when someone loses out because they were given the wrong information by a Department, they are entitled to redress. In applying that principle, Ministers considered two options: first, deferral for up to 14 years; and secondly, a protected rights scheme.

We want to ensure that everyone who has been misled and has lost out gets redress. Deferral alone does not solve that problem. For example, let us consider a 65-year old today who was previously given the wrong information. If he dies, at, say, 80, his widow would still have lost out, but that is not what he was told would happen. We believe that she must have access to redress, but deferral will not provide a solution for that couple. Of course, someone who received the correct information, and spent money buying alternative arrangements, would feel aggrieved if it now turns out that he need not have done so.

However, a protected rights scheme does provide redress. None of those--including people already retired--who were misinformed, and who might have acted differently had they had the correct information need lose out. Therefore, I am setting up an inherited SERPS scheme, which will allow individuals to apply to have their current rights to inheritance of SERPS preserved. To be eligible to apply, applicants must be married; they must have paid national insurance contributions since 1978; and they must have been misinformed after 1986.

The NAO report identifies a number of criteria considered essential to the success of the scheme. I agree with those recommendations. The scheme will be well publicised. We will consult widely, and, crucially, we will not proceed with processing applications from the public until we are satisfied that they can be dealt with effectively.

Postponing implementation of the policy for everyone will also allow time for claims to the scheme to be made and processed. Because I do not consider that the Benefits Agency has the capacity to deal with that work, we will set up a separate unit specially for the purpose.

We will consult the appropriate interested bodies on the delivery of the scheme, including the ombudsman and the National Audit Office. We are also writing to a number of interested organisations today. In working out the details of the scheme, there is an obligation on the Government to ensure that we have a system to get money to those who have lost out, just as there is an obligation on individuals to tell us the truth.

I shall put before the House the full details of the inherited SERPS scheme, including what information we will require from those wishing to claim and the procedures that will be followed to scrutinise those claims. The NAO and the ombudsman will be fully involved in developing those procedures.

I am setting up a helpline for anyone who is concerned. Newspaper advertisements over the next few days will publicise its number: 0845 600 6116. It opens tomorrow at 7 am. I am also writing to all right hon. and hon. Members today, setting out our proposals.

I have set out my proposals to put matters right for those people affected, but I also want to prevent this problem from happening again. The crux of the problem was that there was no clear line of accountability in the Department for ensuring that the policy changes were

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properly implemented or that information provided to the public was accurate and complete. That is symptomatic of a wider problem that I had already identified in the Department: it was not focused on the people whom it was meant to serve, who in this case were the pensioners of today and tomorrow.

I have already begun the process of change by focusing the Department on its key client groups: children, people of working age and pensioners. We need to give a better, dedicated service to pensioners. I am already setting up a modern service with better communications, so that pensioners can get information and advice on pensions and benefits available to them.

Today, I can announce the next step. I am bringing together policy and operational responsibility for pensions under a single organisation, distinct from the Benefits Agency. The new organisation will be solely focused on the needs of pensioners and pensions policy. It will deal with everything from policy development to front-line service delivery, and from changes in the law to changes in leaflets.

We also have a responsibility to provide clear information to the public. We have already tightened up the procedures for checking leaflets and guidance, but we need to do more. The public rely on Government information and they are entitled to be reassured that leaflets are accurate and comprehensive. I believe that all our leaflets should be subject to external independent audit. That should include consultation with others to ensure that all DSS leaflets are written in plain English. I have therefore asked the Social Security Advisory Committee, which is an independent statutory body, to do that.

This failure was deplorable. It should not have happened and it will cost a minimum of £2.5 billion to put right. How much more than that depends on the number of successful claims. We are deferring the change for two and a half years. We are making sure that people do not lose out because they got the wrong information. We are making root-and-branch reforms of the DSS, and, in future, DSS leaflets will be subject to external audit, so that people can rely on clear and accurate information.

The previous Conservative Government have to take responsibility for that mess, and I will take responsibility for clearing it up. I commend the statement to the House.

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