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Retirement Savings

12. Hugh Robertson (Faversham and Mid-Kent): If he will make a statement about the rate of saving for retirement in the United Kingdom. [89711]

The Secretary of State for Work and Pensions (Mr. Andrew Smith): 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.

Hugh Robertson : In view of the problems of last year's Office for National Statistic figures, is the Secretary of

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State convinced that people are now saving enough for their retirement? If not, what is he doing to encourage people to save more?

Mr. Smith: 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.

Alan Simpson (Nottingham, South): 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?

Mr. Smith: 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.

Mr. David Willetts (Havant): 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?

Mr. Smith: 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.

As for the figures cited by the hon. Gentleman, I and other Ministers are right, when asked, to report to the House the figures that we are given by the ONS. We should be criticised if we did not give those figures. The figure of 40 per cent. was cleared with the ONS, and I checked it again before Question Time today.

Mr. Willetts: It 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

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not believe, and have set out my arguments for not doing so in The 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?

Mr. Smith: 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.

That said, so far as the hon. Gentleman's claim to be specific about the level of pensions saving is concerned, I treat his statistics with at least as much scepticism as I regard those that come from the ONS.


13. Tony Cunningham (Workington): What plans he has to help people affected by large-scale redundancies to find new work. [89712]

The Minister for Work (Mr. Nicholas Brown): 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.

Tony Cunningham : 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?

Mr. Brown: 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.

Miss Anne McIntosh (Vale of York): 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

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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?

Mr. Brown: 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.

Andy Burnham (Leigh): 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?

Mr. Brown: 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.

Child Support Agency

14. Bob Russell (Colchester): 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 Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks): The agency applies the same level of verification to a case, irrespective of whether its client has used a financial adviser.

Bob Russell : 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

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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?

Malcolm Wicks: 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.

Mr. Russell Brown (Dumfries): 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.

Malcolm Wicks: 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.

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