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Stakeholder Pensions

13. Gregory Barker (Bexhill and Battle): If he will make a statement on the take-up of stakeholder pensions. [132613]

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): Over 1.5 million stakeholder pensions have been sold since their introduction in April 2001—over 500,000 in the last 12 months for which figures are available. That is an encouraging start and a sign that stakeholder pensions are a valuable option for many.

Gregory Barker : I thank the Minister for that answer, but since the launch of stakeholder pensions they have been targeted specifically on the about 5 million lower-income earners who have no other form of occupational pension. Of the figure quoted, how many are from that target group—with no form of occupational pension—as opposed to people just transferring provision from

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elsewhere? What does she believe to be the acceptable de minimis in respect of take-up from that target group before the policy can be judged a success?

Maria Eagle: As the hon. Gentleman must realise, stakeholder pensions provide a flexible and low-cost option for those who had no such option before their introduction. They are also portable.

Financial Services Authority figures show that 70 per cent. of stakeholder pension sales are to those earning less than #30,000 a year, and 46 per cent. to those earning less than #20,000. The hon. Gentleman suggested that such pensions were for grandchildren. Figures from the Association of British Insurers indicate that 97 per cent. of sales are to people of working age—although I do not understand why Opposition Members should object to grandparents' buying their grandchildren pensions if they wish to do so. I hope that that answers the hon. Gentleman's question.

Dr. Vincent Cable (Twickenham): Does the Minister agree that if there is to be maximum confidence in stakeholder pensions there must be a fair and efficient system for resolving disputes? Can she explain the current crisis in the pension ombudsman system? It is taking more than a year for a file even to be opened when disputes arise. Will she investigate, and suggest some solutions?

Maria Eagle: I will think about what the hon. Gentleman has said. I understand that we are discussing with the ombudsman the resources that he needs in order to deal with the matter. If I have anything further to say to him, I will write to him separately.

Pension Credit

15. Mr. John Robertson (Glasgow, Anniesland): What assessment he has made of the impact of the pension credit on (a) poorer pensioners and (b) women pensioners. [132615]

The Minister for Pensions (Malcolm Wicks): The new pension credit proposals are a major weapon in our attack on pensioner poverty. Pension credit, however, is not just for the poorest; it is also for those who might be described as being on modest incomes, or as hard-pressed—such as the couple in Glasgow who were not eligible for minimum income guarantee, but who, following a visit from the Pension Service, are now receiving #24 a week in pension credit. My hon. Friend will welcome that news, as he is himself a mighty champion of pensioners in his constituency.

As for the benefits for women, it is very significant that two out of three pension credit beneficiaries are expected to be women.

John Robertson: I thank my hon. Friend for his answer, and congratulate him and his colleagues on all the work that they have done on pension credit.

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Like many other Members, I am worried about uptake. I do not just mean telephone uptake. Some people do not like talking on the telephone, and the forms, letters and other correspondence issued to pensioners are difficult to understand. Will the Minister try to simplify the system?

Malcolm Wicks: We will always look for improvements on what is a very new policy, but the important thing is that we are making access to the new credit as easy as possible by not requiring people to fill out forms if they do not want to. They can deal with the matter on the telephone, and there will be advice surgeries in my hon. Friend's and all our constituencies, as well as home visits.

I hope that all Members will get behind pension credit. There are people out there who deserve extra support, and it is our duty to ensure that they receive it.

Miss Anne McIntosh (Vale of York): Is the Minister aware of the difficulties being experienced by care homes during the current delay in processing information on whether a poorer or female pensioner is eligible? Will he ask the Department to review the position so that care homes do not lose out?

Malcolm Wicks: It is obviously important for people throughout the community to have their entitlement,

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including often frail and elderly people living in care homes. I was not aware of this difficulty; perhaps I could discuss it with the hon. Lady.

Mr. Bob Blizzard (Waveney): Are not those who try to dissuade pensioners from claiming the credit by trying to make out that it is the same as the horrible means tests of decades ago, introduced by the Tories, doing those pensioners a disservice? Although some pensioners in my constituency are finding the performance of the Pension Service in processing their claims a bit patchy, they do not find the questions demeaning, because they are similar to questions that they have often had to answer when signing hire purchase agreements to buy cars and the like.

Malcolm Wicks: We are not complacent. We need to learn from the roll-out of pension credit: that is why we did not introduce it for every pensioner in one week, or one month. My hon. Friend makes an important point, however. Whatever one's views on the important question of selectivity versus universality, this form of income testing is very different from the old weekly means test over which the last Government presided, and a million miles away from what we had in the 1930s. I hope that when people make public comments on the subject they will avoid using absurd terminology such as Xstigma" and Xdemeaning", because that puts off people who are entitled to the money, many of whom live in poverty. We want to ensure that they have that money, as I hope the whole House does.

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European Council

3.30 pm

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw): With permission, Mr. Speaker, I should like to make a statement about the European Council, which the Prime Minister and I attended last Thursday and Friday—16 and 17 October. I saw the Prime Minister earlier this afternoon. I am pleased to tell the House that he is in very good form and fully recovered from yesterday. [Hon. Members: "Hear, hear."]

At the summit in Brussels, European Union Heads of State and Government had their first substantive discussion of the draft constitutional treaty, focusing on the size of the Commission, the role of the chair of the European Council, changes in the rotating presidency and the weighting of votes after enlargement. The Prime Minister set out the United Kingdom's position in the White Paper that was published to the House on 9 September.

The Council discussed the European economy and agreed a number of measures to encourage growth. I have placed a copy of the conclusions in the Library. They stress the European Union's commitment to structural reform, flexibility of capital and labour markets, and innovation and investment in research and development. But between now and the spring Council on the European economy, work needs to begin to reform European competition policy; to make the new system of regulatory assessment work effectively; and to take forward the ideas of the recent report by a leading economist, Professor Andre Sapir, on how the EU budget can better be focused on economic reform priorities. That agenda remains a high priority for the Government. We are working closely with the Irish Government who, as the EU presidency, will chair the economic summit in the spring.

The European Council discussed defence at a Heads of State and Government dinner. The EU has mounted two European security and defence policy military operations this year, both with UK contributions. In March, an EU-led military mission took over from NATO in the stabilisation role in Macedonia and in June the EU deployed troops to the Democratic Republic of the Congo to support UN activity there. Both operations followed the approach agreed by the Prime Minister and President Chirac in launching the European security and defence policy initiative at St. Malo in 1998—that is, that the EU will act militarily only

In Macedonia, NATO has decided to terminate its mission and to support an EU successor force through the Berlin-plus arrangements. In the case of the DRC, the EU decided to deploy a force after consultation with NATO and once it was clear that NATO did not intend to engage militarily in that area.

It obviously makes sense for EU nations to strengthen Europe's contribution to the alliance and to enable Europe to act in circumstances where NATO does not want to. However, it would not make sense, and it is unacceptable to us, for the EU unrealistically to aspire to provide a territorial defence commitment for Europe.

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That must be a matter for NATO. Three years ago, at Nice, the European Council recognised, in approving the permanent arrangements for ESDP, that

The Government believe in a strong Europe and a strong NATO. Our leading role in ESDP has been based on those twin commitments, which are widely shared across the enlarging European Union and the Atlantic alliance and will be at the heart of the development of ESDP in the intergovernmental conference and beyond.

Let me turn now to Iraq. The European Council welcomed the unanimous decision of United Nations Security Council resolution 1511 on Iraq on 16 October. Its successful passage by 15 votes to nil reflects weeks of intensive negotiations, and is a great testament to the tireless work of the US Secretary of State, Colin Powell.

The resolution sets a deadline of 15 December, by when the Iraqi interim governing council should provide a timeline and a programme leading to an Iraqi constitution, and to democratic elections. We want to give control of Iraq back to its people as soon as is possible and practicable. Iraqi Ministers are already heavily involved in much of the country's day-to-day business, and they will be more involved in the weeks and months ahead.

The new resolution, 1511, confirms the United Nations' central role and encourages its member states and international bodies to support the reconstruction of Iraq. The next step will be the Madrid donors' conference, to be held at the end of this week, at which the United Kingdom will pledge a further £300 million in assistance over two years. Together with money already committed, this will bring the UK's assistance for the three years from April 2003 to £550 million. That is on top of the very substantial contribution that we are making through our commitment of British troops.

The security situation, especially in the Baghdad area, is not satisfactory, but since Saddam's downfall the coalition has made huge efforts to rebuild Iraq's infrastructure. Power generation is now exceeding pre-war averages. Last week, oil production reached 2 million barrels per day for the first time since military operations ceased. Nearly all schools and hospitals are open. Iraq has a new currency, banks have reopened and businesses are coming back to life. Security sector reform remains a key focus for the coalition, and the challenge is to put Iraqis in charge. Iraq now has 40,000 police, and this number will rise to 70,000 within a year. The first battalions of the new Iraqi army have graduated. Training for additional Iraqi military continues, and there is now an independent judiciary.

The Prime Minister asked particularly that I emphasise his personal tribute to United Kingdom servicemen and women, to other UK personnel and to other coalition partners, who are working selflessly in difficult and dangerous circumstances for the good of the Iraqi people. Much still needs to be done, but much is now being achieved.

The European Council also discussed Iran, and again urged the Iranian Government to co-operate fully with the International Atomic Energy Agency. Resolving the doubts surrounding Iran's nuclear programme is a matter of grave concern to the European Union and to the wider international community. Immediately after

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making this statement I will travel to Tehran to join my French and German counterparts, Dominique de Villepin and Joschka Fischer, for talks on that issue, at the Iranian Government's invitation. We will press on the Iranians the urgent need for compliance with all of the requirements of the resolution passed last month by the International Atomic Energy Agency's board of governors. This means that we shall seek full co-operation and transparency to enable the IAEA to resolve outstanding questions, and we shall press the Iranians on key issues raised by the resolution. These include early signature, ratification and implementation of an additional protocol to Iran's existing safeguards agreement, and the suspension of all enrichment and reprocessing activities.

The European Council considered the worsening situation in the middle east and condemned the intensification of suicide attacks and other violence, in particular the attack that killed three United States citizens in the Gaza strip on 15 October. The Union again called on the Palestinian Authority to do all that it could to fight against extremist violence. It also expressed particular concern over the route of the so-called "security fence." Apart from the humanitarian and economic hardship that this project is already bringing to many Palestinians, it could also make the two-state solution, which is the Security Council's policy, impossible to implement.

Let me now return to the question of the intergovernmental conference. We shall work hard to achieve a successful outcome under the Italian presidency this year, and we are very grateful to the leadership of the Italian Government in these negotiations. [Hon. Members: "Keep a straight face, Jack."] We had a very happy time in Brussels on Thursday and Friday.

The draft constitutional treaty is designed to improve the way in which the European Union will work after enlargement, by reform, by clarification and by consolidation, as everyone who has bothered to read the document, rather than the transcriptions provided by Conservative central office, knows. The claims made by the Opposition and others that the treaty would undermine Britain's independence are, frankly, absurd. They are, in truth, not arguments against the draft treaty or anything in it, but as the right hon. and learned Member for Rushcliffe (Mr. Clarke) pointed out in an excellent pamphlet earlier this week, they are arguments against British membership of the European Union itself. The logic of those on the Conservative Front Bench, and of some, but by no means all, other Opposition Members, would be to take Britain out of the European Union altogether, and the British people need to know that.

The European constitutional treaty has to be based on independent sovereign nation states co-operating, not on some federal superstate—and so it will be. A constitutional treaty embodying those principles will contribute to a strong and successful European Union. That is essential for our economic prosperity and our

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security, and for Europe's stability. We believe that this patriotic approach is in the interests of this country, and I strongly recommend it to the House.

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