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Private Pension Funds
2. Mr. Mark Hoban (Fareham): If he will make a statement on the current value of private pension funds. [117283]
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): At the end of 2001, the most recent year for which Office for National Statistics figures are available, it was estimated that the total assets of self-administered pension funds were about £712 billion.
Mr. Hoban : One of the concerns that my constituents express when faced with the decline in value of their pension funds relates to how they could live off the annuity that the funds would purchase. What thought have the Government given to relaxing the ways in which such funds can be used, so that pensioners could maximise their income and thus reduce their dependency on means-tested benefits?
Maria Eagle: The hon. Gentleman will have seen the Green Paper that was published recently. My right hon. Friend the Secretary of State will publish further proposals soon. As the hon. Gentleman will know, there are suggestions in the Green Paper.
Mr. Frank Field (Birkenhead): The news that the Minister has given today will be welcomed by about half the population, who have a stake in occupational pensions. But will she give us some idea of what the Government plan to do for those who, having thought that they had a stake, find that their schemes have been wound-up and their claims have either disappeared or largely disappeared? Are the Government thinking of using some of the £13,000 million of unclaimed assets that lie idle in the balances of banks and building societies as an endowment, to ensure that the loss of funds that people thought they had for their retirement can be made good?
Maria Eagle: As ever, my right hon. Friend has advanced interesting ideas about this in his Pensions (Winding Up) Bill. I know that over the weekend he spoke to the ASW pensioners, who organised a march to draw attention to their circumstances. Such cases bring into sharp focus the need for action to reduce the risk of such developments. There is no doubt that those who lose their pensions—and their families and friends—will be less likely to save for the future. It behoves us all to come up with arrangements that will protect pensions better, otherwise people simply will not save.
The right hon. Gentleman mentioned unclaimed assets. "Unclaimed" does not necessarily mean that the assets do not belong to someone. The right hon. Gentleman knows as well as I do that these issues are fraught and difficult, especially for those currently affected, but we are willing to consider any suggestions that he or anyone else may have. That has been the aim of our consultation. The response to the Green Paper will enable us to change the arrangements so that similar problems do not occur in the future.
Mr. Steve Webb (Northavon): As was pointed out by the right hon. Member for Birkenhead (Mr. Field), the value of a pension fund to a worker whose employer goes bankrupt is often a tiny fraction of what the worker expected. The Government have let it be known through the media that they are considering an insurance-based solution. Does the Minister agree that any insurance scheme must be underwritten by the Government? Otherwise there could be yet another fraud, and people could not just lose the pensions they had expected but find that the insurance schemes have gone bankrupt as well.
Maria Eagle: The hon. Gentleman refers to speculation in the press about what might be in the response to the Green Paper. It is for my right hon. Friend the Secretary of State to present that response to Parliament; I cannot speculate on suggestions in the newspapers.
Mr. Ken Purchase (Wolverhampton, North-East): Does the Minister understand—I am sure she does—that when a company goes into administration with the pension fund in tow, as has happened at Chart Industries, Incorporated in my constituency, it takes years for workers to become aware of their pension entitlements? That is a very anxious time for people. Would the Minister consider telling her friends in the Treasury that it might not be a bad idea for those with company pensions to be preferential creditors pari passu with Government demands, rather than ordinary creditors not knowing, at the end of the day, what is left with which to pay the pensions?
Maria Eagle: That is one of the most distressing aspects of the winding up of pensions—apart from the fact that it occasionally takes far too long. Suggestions in the Green Paper about the time it takes have been welcomed throughout the House, and outside. People are often left not knowing what percentage of their original pensions they will be left with.
This is a crucial challenge. Proposals in the Green Paper for assets to be shared more fairly when schemes are wound up have been widely welcomed, but we need
to ensure that action is taken. We also need to speed up the winding up of schemes, and try to ensure that most of the assets of what may be small funds are not swallowed up in fees. We want savers to feel confident that it is sensible to put their money into pensions.
Mr. James Arbuthnot (North-East Hampshire): These are serious issues, raised by Members in all parts of the House. I know that the Minister recognises that. Is it not a shame that the Prime Minister appears not to recognise the seriousness of the issues, having failed to appoint a replacement for the Minister for Pensions in the last 60 days?
Maria Eagle: May I say to the hon. Gentleman and others who have raised this matter in the House that the absence of my right hon. Friend the Member for Makerfield (Mr. McCartney) makes me the smallest Pensions Minister on the Government Front Bench? I can also assure the House that his absence has not delayed the work that is being done by the Department to deal with the Green Paper and the arrangements that need to be made. I can assure the hon. Gentleman that it has not delayed the date at which we shall produce our response to the Green Paper.
Hebburn Offices
3. Mr. Stephen Hepburn (Jarrow): If he will make a statement on the future of his Department's offices in Hebburn. [117284]
The Minister for Work (Mr. Nicholas Brown): The Hebburn offices accommodate 607 officials from the Department for Work and Pensions and the Inland Revenue. The lease on the building, which is held by the Inland Revenue, is due to expire on 23 June 2006. The Department for Work and Pensions is working with the Inland Revenue to identify suitable alternative accommodation in the Tyneside area. Alternative accommodation has already been found in Tyneside for more than 500 staff that are based at the Hebburn site. My hon. Friend will also be pleased to learn that the new Jobcentre Plus service in Jarrow will be rolled out by the end of this year. In addition, Gateshead and south Tyneside have been successful in gaining one of the new incapacity benefit pilot areas. That will be welcome news to local people, not least because it will give those who thought they had left the traditional shipbuilding and engineering industries for ever a chance to return to some of the jobs that are coming to the river.
Mr. Hepburn : I am aware that more than one Government agency is situated in that building. However, as the Minister stressed, many hundreds of south Tynesiders' jobs are in that building, and the closure will have a massive, adverse economic impact on the local Hebburn shopping centre. Will he get together with his fellow Ministers to review the position and ensure that the offices do not close?
Mr. Brown: I can give my hon. Friend two assurances. He knows that I want to do everything I can to help. First, I assure him that the jobs will not be lost: they are being relocated on Tyneside. Secondly, I realise the impact that this move is bound to have in the Hebburn
area, and if he would like a meeting with me and officials from the Inland Revenue to discuss what can be done to redevelop the site once the lease runs out, I would be happy to arrange a meeting with him to see whether we can find a constructive way forward for the people of Hebburn.Child Support Agency
4. Bob Russell (Colchester): How many people have been prosecuted for making false statements to the Child Support Agency. [117285]
5. Mr. Richard Page (South-West Hertfordshire): If he will make a statement on the Child Support Agency. [117286]
The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks): Twelve people have been prosecuted under section 14A of the Child Support Act 1991. The Secretary of State's targets for the Child Support Agency for 2003–04 were published on 29 April in the agency's business plan. Those targets require a further improvement in performance, building on the progress made in recent years. I should add that the agency has more than doubled the amount of maintenance delivered from £300 million in 1995–96 to £770 million in 2001–02.
Bob Russell : Is the Minister seriously suggesting that there are only 12 dishonest, lying fathers who, when filling in the forms, try to deprive their children of the maintenance that they should receive? Surely there is a case to be made for some serious prosecutions against fathers who cheat their children, so that they are made to pay. I am talking not about the fathers who go out of their way to provide maintenance for their children, but about those who lie and cheat. The Child Support Agency must know who they are.
Malcolm Wicks: Certainly, we must be tough with those who lie and cheat, but the whole purpose of our powers is to ensure that people give the necessary information in the first place. We have tough powers, and we work closely with the Inland Revenue. When we think that the non-resident parent's lifestyle is not compatible with the income they tell us they receive, we can vary the order to make them pay up and pay more maintenance.
Mr. Page: When will the new formula for calculating the maintenance be introduced for existing as well as new cases, so that there is equality of treatment for my constituents? Will the new formula in any way reduce the number of successful claims for maladministration, which have soared from 1,389 in 1997–98 to 12,007 in 2001–02?
Malcolm Wicks: Where there is maladministration, and we try to cut that, it is right and proper that people have redress. I understand the question. As soon as we can bring all cases on to the new system, the better, but it is a massive operation. The new scheme only started in March. We will publish data on the first quarter in
July this year, but the House will have to be patient. Time will pass before we can make a decision on bringing on board the old cases.
Mr. Bill O'Brien (Normanton): Would it be right to say that not all absent parents are fathers—there are mothers who are absent parents? Will my hon. Friend give some idea as to what progress is being made in ensuring that the third of children who are not receiving maintenance receive maintenance through Child Support Agency procedures? Given that the first eight weeks of payment are disregarded, will the absent parent now be responsible for making maintenance payments for the whole period from when the application is made by the parent with care?
Malcolm Wicks: The purpose of our child support reforms, which, as we have noted, are currently for new cases only, is to shift the burden of emphasis from assessment, which will be much easier and based on a simple formula, towards enforcement. However, as I said, more maintenance is now going to parents with care—usually the mother but, as my hon. Friend says, sometimes it is the father. We have new powers and we are absolutely determined in all sorts of ways that parents, whatever their family situation, recognise their responsibility to bring up and to fund their own children.
Mrs. Ann Cryer (Keighley): Can the Minister comment on how much cross- checking is achieved between statements to the Child Support Agency and statements to, for example, the Inland Revenue and housing benefit, working tax credit and immigration entry clearance departments?
Malcolm Wicks: Increasingly, we have powers and we have the authority of Parliament to cross-check data. Perhaps I will write to my hon. Friend about some of the details. We all know that while the great majority of self-employed people are honest, there can be a problem in compliance with maintenance. Since 1999, the agency has asked self-employed non-resident parents to provide copies of their tax return. That shows that we are moving in the direction that my hon. Friend is, I think, suggesting.
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