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Mr. Waterson: I shall not go back over the article or the pamphlet written by my hon. Friend the Member for Havant, but it seems clear that the current figures for increasing employment relate to the public sector and that the rate for the private sector is not increasing but falling back.
Another point that my hon. Friend rebutted in his response to the Minister's letter is that if we add the number of young people who are not in full-time education to the number of those who are economically inactive, the sum total is well over a million young people, which is a great worry. In fairness, the Minister has accepted that the issue is serious—[Interruption.]—as he repeats from a sedentary position. That is a further example to show that the headline figures on which the Government so often rely are only part of the story.
I come now to the new deal, particularly the new deal for young people. The Minister may remember that, on 17 November, he described the new deal for young people as a "great success"—no, doubt, when taking a break between sending out press releases in similar terms—but recent figures show that only 35 per cent. of all those starting employment under that new deal have entered unsubsidised jobs. As I have said, there are still well over 1 million young people who are either economically inactive or unemployed. Only 17 per cent. of those starting employment under the new deal for over-25s entered sustained, unsubsidised jobs.
My hon. Friend the Member for Havant touched on the new deal for disabled people. However, there seems to be some misinformation among Labour Members, so let me take this opportunity to make it absolutely clear that abolishing that new deal is not part of our policy, nor part of our savings to restore the earnings link, because that new deal has been relatively successful. A great deal has been spent on the other new deals to much less effect, but there is still a persistent figure of 1 million or so people with disabilities who, when asked, say that they would like to gain or return to employment.
Again, we can agree that that is a serious problem, but I urge Ministers to consider the point that my hon. Friend made so eloquently in his opening speech: there are artificial barriers—we have debated them in the past—to people returning to work. Of course, one of the main barriers, if not the main one, is simply the introduction of the means-tested benefit, whereby people feel that, if they get a job which, for any number of reasons, does not work out, they will be in a more disadvantageous position than they would otherwise have been. I urge the Minister to take that point seriously.
Mr. Webb: The hon. Gentleman makes a distinction between the new deal for disabled people, to which he is broadly sympathetic, and the other new deals, which he wants to scrap. What is different about the new deal for disabled people? Why does he want to keep that new deal and get rid of the others?
Mr. Waterson: I have made the point that the new deal for disabled people has been relatively—I stress that word—more successful. Although vast amounts more are spent on the other new deals, a significant proportion of those involved in the new deal for disabled people have been helped back into work. About 6.6 per cent. of participants in that new deal have found sustained employment under the scheme. Of course, that is nothing like enough—I concede that immediately—but it is at least something. Given the fact that those people have particular disadvantages, we have concluded that we would keep that new deal in more or less its current form for the foreseeable future.
Mr. Browne: I am extremely grateful to the hon. Gentleman for giving way again. On the disincentive effect of the requirement to recalculate benefits for disabled people who move into work, I was interested to hear the hon. Member for Havant developing that thesis during his speech, but I am certain that the reality does not sustain his thesis. The reality is that, for 52 weeks or
up to two years, those who enter work through the new deal for disabled people will almost always be guaranteed to return to the same rate of benefit, because of the linking rules, if they lose their job.
Mr. Waterson: If the Minister is right, perhaps this is a matter of perception, but at the end of the day, the means-tested benefit is one of a number of artificial barriers to disabled people returning to work. I have not gone away and dreamt that up in a darkened room; it has been put to me by disabled people and groups that represent them. There is a major, perceived disincentive, but if the Minister is right, perhaps he and the Department should do more to make such things clear to those groups.
I shall now move on to the final issue on the uprating of benefits that I wanted to touch on: child poverty and the Child Support Agency. The Secretary of State for Work and Pensions has conceded more than once—he certainly did so when I last raised the issue back in December, and he has not tried to tap-dance round the problem—that there is a major difficulty with the computer system, with the migration of the 1.1 million old cases to the new system and with the date at which it will work properly. This is not some anorak, techie issue. A very large proportion of the people involved in those 1.1 million cases could be significantly better off on the new formula. Many of those families have modest means and are in vulnerable situations. So there is a real injustice, not least because there is no suggestion that they should be compensated ex post facto when they finally get on to the new system. Again, those vulnerable, poorer people's cash flow is being used to subsidise the Government, which is wholly unacceptable.
The initials EDS inevitably rear their head. When the Secretary of State gave evidence on this subject, he made the point that "significant payments" due to EDS had been withheld. Clearly, there is a major problem. Among other things, he said:
- "We have been assured there is a recovery programme in place and that the system is retrievable—in other words, it can be made to work properly rather than needing to be scrapped."
- "it might have to be abandoned."
- "When you have been through the sort of experience . . . you ask some hard questions about whether it really can be made to work."
Are the Ministers in the Department for Work and Pensions now confident about the long-term future of EDS's involvement in that project? Do they believe that the system is retrievable, or that it needs to be scrapped? I am happy to take an intervention to deal with that point—now or later, whichever is more convenient. I gather that the Minister has wisely decided to deal with it later.
I shall just touch on child poverty because my hon. Friend the Member for Havant went into that issue in some depth in dealing with the clash with the tax credit system. We all know about the problems that our constituents faced when the system was introduced and the hon. Member for Northavon eloquently dealt with
the major unfairness involved, but there were two thunderous silences in the Secretary of State's speech. I shall come to the other in a moment, but the first occurred when he was pressed by my hon. Friend on that issue. Having reflected on that and having received inspiration from officials, the Minister may feel able to deal with that point in responding to the debate.This is the bit where I put on my anorak—although little used—as I want to refer to the Government Actuary's Department document, Command Paper 6117, which accompanies the helpful bundle of papers on the uprating order. In my eternal attempt to be helpful, I remind the Minister of the point that has been made by my hon. Friend the Member for Havant and the hon. Member for Northavon about the apparent 40 per cent. jump in administration costs for 2002–03, and the fact that the estimate for 2003–04 is 40 per cent. higher even than that. We just want to know why.
I wish to make two other points about Command Paper 6117. First, according to the document, contribution receipts are up 5.5 per cent.—from £59 billion to £62.2 billion—but benefits, including uprating, are up only 3.9 per cent. Is that not an example of another stealth tax in operation? Finally on that document, the Government Actuary says:
- "There is still uncertainly about the effect of contracting out on the financial position of the National Insurance Fund."
May I touch briefly and separately on the pension uprating order? Means-testing is at the heart of all such debates—we will no doubt come on to it again in the Opposition-day debate later. The Conservative party fundamentally believes that growing means-testing is not only wrong and bad for society and the individuals involved but deters help from getting to those who most need help. We debate the roll-out of the pension credit endlessly in the House, but even after all the advertising, letters, home visits and surgeries, only about half of those who are entitled claim the credit. The Department's target—to use the word used by the Minister—means that 1.4 million people will never get round to claiming pension credit.
The second thunderous silence during the Secretary of State's speech came when he was pressed on his party's future plans to link pension credit either to earnings or to prices. The Government seem unable or unwilling to answer that enormously important question. Thus, our argument is that the only fair and sensible way of dealing with the problems, as set out by the hon. Member for Newport, West (Paul Flynn), is to restore
the link with earnings. I know that we must be on strong ground because a range of older people's organisations and organisations such as the TUC support our policy.
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