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House of Commons

Monday 17 March 2003

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

New Deal 50-Plus

1. Jon Trickett (Hemsworth): If he will make a statement on the impact of new deal 50-plus on getting older people back into work. [102943]

The Secretary of State for Work and Pensions (Mr. Andrew Smith): New deal 50-plus has been a success, and nearly 92,000 people have moved into work while claiming employment credit. Evaluation has shown that it is also helping people by giving them the increased motivation and confidence they need to find jobs. New deal 50-plus is also making a good contribution to our wider campaign to tackle age discrimination and improve the prospects of older people.

Jon Trickett : I congratulate the Government on their work in this difficult area, but is my right hon. Friend aware of the acute problems in former coalfield areas such as my constituency, where one household in four still has no one in work? That is a frightening statistic. Many are older people, former miners who were thrown on the scrap heap by the Tories when the pits were closed. Will my right hon. Friend pay particular attention in any further rolling out of the new deal to blackspots such as the one I represent?

Mr. Smith: Yes indeed. New deal 50-plus and the Government's other programmes, including the excellent work done by the coalfields taskforce in partnership with local communities, is making headway in tackling pressing social concerns. The gap between the employment rate among those over 50 and the average rate has been narrowing as fast in the more deprived regions as in the less deprived, if not faster. There is more to be done, but we are determined to build on the progress that has been made.

Mr. Nigel Waterson (Eastbourne): When will the Government do something to help people such as my constituent Jill Lambard-Brown, who has been sacked from her job as a swimming teacher by Eastbourne

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borough council simply because she is approaching the age of 65—although she is as fit as a fiddle, popular with families and children and very keen to carry on?

Mr. Smith: I have a great deal of sympathy for people like the hon. Gentleman's constituent. That is why we are committed to legislating to outlaw age discrimination, and why the Department of Trade and Industry is consulting on the ending of mandatory retirement ages. An important aim of our Green Paper is to encourage people who want to continue working for longer. We should make the most of the talents of all in our community, regardless of their age, and that includes the hon. Gentleman's constituent.

Pension Credit

2. Helen Jones (Warrington, North): What assessment he has made of the impact of the pension credit on the incomes of the poorest pensioners. [102945]

The Secretary of State for Work and Pensions (Mr. Andrew Smith): Around half of all pensioner households will be eligible for pension credit, and, on average, stand to gain around £400 a year. In total, as a result of the Government's tax and benefit changes, the poorest third of pensioner households will be on average £1,500 a year better off than in 1997, with pensioner households as a whole better off by an average of £1,150.

Helen Jones : As my right hon. Friend will know, many constituents like mine whose incomes are just above the income support level will benefit greatly from pension credit. Sadly, however, many are still unaware that they can claim it and of how much it would be worth. What steps is my right hon. Friend taking to ensure that all pensioners who are entitled to the credit know of their right to claim, and are helped to do so? Many are put off by the need to fill in forms and so forth.

Mr. Smith: My hon. Friend makes a good point. That is exactly why we are introducing pension credit—to help those who previously just lost out because of modest occupational pension or savings income. We will make claiming simple and straightforward. Only a telephone call will be necessary: all the information is provided for the claimants, and they will not have to complete complicated forms. The forms will be sent to them to be signed. Moreover, those already receiving the minimum income guarantee will automatically be passported on to pension credit.

As for my hon. Friend's important point about take-up, since we launched our take-up campaign in May 2000, over 150,000 more people have received the minimum income guarantee, and have benefited by an average of £20 a week. We need to build on that.

Mr. James Arbuthnot (North-East Hampshire): The Institute for Fiscal Studies has calculated that about 1.6 million pensioner families will be floated on to benefit entitlement by pension credit, and therefore lose their incentive to save. About a month ago, however, the

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Minister of State said that there was no inherent disincentive. Is the institute right, or the Minister of State?

Mr. Smith: That is a very easy question. The Minister of State is right. I heard what he said. He pointed out that, with the introduction of the pension credit, we reward saving where previously it was penalised. In opposing the pension credit, Conservative Members should open their eyes to the fact that they are committing to going back to 100 per cent. rates of withdrawal, which penalise saving and thrift and hit those on modest incomes hard.

James Purnell (Stalybridge and Hyde): When parents take time off work to look after their children, they get home responsibilities protection and, therefore, contributions towards their pension. When foster carers do the same, they do not get HRP, so they lose those contributions towards their pension. Foster carers do extremely important work. Often, they are struggling on low incomes. Can my right hon. Friend do anything to put that right and give them the right to the basic state pension and therefore to full pension credit entitlement?

Mr. Smith: There is widespread support in the House for what my hon. Friend says. I pay tribute to the energy and persistence with which he has campaigned on that issue. I can announce that we shall extend home responsibilities protection to foster carers, so that those years of caring count towards their pension entitlement. They do an invaluable job for this country. It is time that that contribution was recognised in the way they build up their pensions. I am pleased to give my hon. Friend the good news that we shall go ahead with that.

Mr. Oliver Heald (North-East Hertfordshire): Is it not wrong that so many of the poorest pensioners, particularly women, will miss out on pension credit through low take-up? Can the Secretary of State confirm that his projection is that only two thirds of those entitled will receive it in the first year, and that the target that he has agreed with the Treasury for 2006 means that 1 million pensioner households will still not receive pension credit? Is that the best he can do for our poorest pensioners, and how does he justify a benefit that was set up on the basis that millions of pensioners would not receive it for many years?

Mr. Smith: It is extraordinary that the hon. Gentleman should seek to berate us when we are trying to maximise take-up. The approach of the Conservative party is to take pension credit away from those people altogether. On the projections for future years, it of course depends on the numbers who will be eligible at that time but I am confident that it will be more than the 67 per cent.; that figure is purely a planning assumption. We will do everything that we can to ensure that everyone entitled to the pension credit receives it. I hope that Conservative Members will join us in campaigning for that, and not get on their high horse about abolishing it.

Andy Burnham (Leigh): In my constituency at least, pension credit has universal backing. I pay tribute to the Secretary of State and the Minister for Pensions for

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developing an excellent policy. Many people in Leigh have small works pensions. Many of those are former miners or their widows. They may have just received, or be about to receive, a lump sum compensation from the coal health compensation scheme. It would be unfair if those payments in respect of ill health affected eligibility for pension credit or the level at which it is paid. Will the Secretary of State assure me that such payments will be disregarded when calculating pension credit?

Mr. Smith: I can indeed confirm that such payments, which are important for the reasons that my hon. Friend gave, will be disregarded in the calculation of pension credit.

Child Support Agency

3. Mr. Andrew Turner (Isle of Wight): If he will make a statement on the effectiveness of the Child Support Agency. [102947]

The Secretary of State for Work and Pensions (Mr. Andrew Smith): The Child Support Agency has steadily increased its effectiveness since the mid-1990s. In 1995–96, the amount of money going to parents with care was only £300 million. By 2001–02, it was around £770 million. The new CSA system for new cases has got off to a smooth start.

Mr. Turner : I thank the Secretary of State for that answer. Were the new system applied to all cases simultaneously, how many parents with care would gain, and what proportion would that be?

Mr. Smith: Around 60 per cent.

Mr. Peter Pike (Burnley): Does my right hon. Friend recognise that one of the biggest categories of complaints from people trying to get payments due to them under the CSA involves men who are self-employed, who can give the system the run-around and who avoid declaring the money and income that they have. Is my right hon. Friend sure that steps are being taken to ensure that the mother gets what she is entitled to in those cases?

Mr. Smith: Yes. That is a very important purpose of the reform and the introduction of the new system. Because the new system is much simpler, it will enable us to spend far fewer resources on assessing and perpetually reassessing cases. It will thereby enable us to put a lot more effort into ensuring compliance, and making sure that people pay the assessments that they are supposed to be paying. As I have told the House before, particular effort will be made in relation to the self-employed, whose compliance rates are significantly below the average.

Mr. Steve Webb (Northavon): The Government's intention was that, in cases where CSA assessment under the new system is very different from that under the old system, change can be phased in over a period of up to five years. A month ago, I drew the Secretary of State's attention to the fact that some people are circumventing that principle by opting out of the CSA and turning up three months later as brand new cases,

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thereby getting the entire five-year increase in one go. Has he done anything about that problem since I raised it, and given that, as my experience shows, such cases do exist, what will he do to prevent the Government's and Parliament's intention from being thwarted?

Mr. Smith: As I have explained to the hon. Gentleman before, rules have been put in place—in particular, the 13-week provision. We must have a practical way of operating that minimises the incentive for people to try to work the new system to get on to it, but which enables its operation without the addition of yet further bureaucracy and complexity—the very problems that brought the old system into such disrepute and made it so difficult to get the standards of effectiveness that are now being achieved. People on the new assessment are assessed on the much more simple, straightforward basis that we have set out: 15 per cent. for one child, 20 per cent. for two children, and 25 per cent. for additional children. That is accepted by hon. Members and by the country, on the basis of consultation, as a fair method of payment. I hope that the hon. Gentleman and his party will join us in supporting the principle that money that is due to children ought to be paid, and that they will support the new system, which will ensure that more children benefit.

Mr. Julian Brazier (Canterbury): The Government originally promised the new system by October 2001, and then by April 2002, but we now have this half-baked arrangement whereby new and recycled cases are handled under the new system, while existing ones continue under the old one. When will existing cases move to the new system? Is the five-year transition that the Secretary of State has talked about actually going to happen, and how will it work? There are both winners and losers out there who face great uncertainty as a result of continuing delay.

Mr. Smith: It is rich for the hon. Gentleman to accuse us of implementing a half-baked system, given that we have had to work so very hard to put right the utter shambles of a system, for which everyone knows the Conservatives were responsible. On reflection, he will surely accept that it is very sensible indeed to ensure that the system works with new cases before switching over existing ones. I will announce the date for doing that when we know that it can sensibly be planned for, and not before. On the five-year transition, yes, it will operate.

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