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Pension Rights

6. Shona McIsaac (Cleethorpes) (Lab): What plans he has to help people who work for short periods to build up pension rights. [167680]

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): It is important to enable more employees, and particularly those who change jobs frequently, to start building up a private pension when they leave a job before their rights have vested in an occupational pension scheme. We are legislating to help people who work for short periods build up pension rights. The intention is that, when a person leaves an occupational pension scheme after three months but before their rights have vested, they will get the choice of
 
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a cash transfer sum, which includes employer contributions and tax incentives, or a refund of their contributions.

Shona McIsaac : I thank my hon. Friend for that response. Is she aware that Cleethorpes constituency has the third highest number of part-time workers in Britain because of the very nature of the work in the area, much of which is seasonal? In addition to this, many workers in the industrial sector are agency workers and, again, that means those people are on short-term contracts. Can she assure me that the new provisions will assist these two sectors of employment in my constituency?

Maria Eagle: My hon. Friend shows her usual assiduity in looking after the needs of her constituents and we can only say "Well done" to her for that. Part-time workers now receive equal treatment in pension provisions and the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 transposed the part-time workers directive into law in this country. I can therefore assure her that part-time workers will benefit just as much from these provisions as full-time workers. We expect 30,000 to 50,000 people to benefit by an average of about £1,000 extra to add to their pension savings.

It is unusual for agency workers to have access to occupational schemes. To the extent that they do, they will be protected similarly. However, agency workers, of course, have the option of putting money into stakeholder pensions.

Mr. Lindsay Hoyle (Chorley) (Lab): I welcome my hon. Friend's remarks about agency workers. In the north-west, as she will realise, companies have made people redundant and then taken them back on as agency workers in order to get out of making pension contributions and supporting pension funds. Will she look at that, and also at the situation of construction workers, who swap companies all the time and may sometimes work abroad, and are therefore unable to build up and benefit from their pensions in the way that others do?

Maria Eagle: I will of course consider any constituency issue that my hon. Friend wants to draw to my attention. I deplore practices such as those that he mentioned, which are used by businesses intent on fiddling their employees out of pension contributions. That is not the kind of partnership that we want to see. I should add that most companies are not like that. As I said, the small but important improvements in pension legislation should help part-time workers just as much as full-time workers. I undertake to look further at what my hon. Friend has said.

Child Poverty

7. Vera Baird (Redcar) (Lab): What assessment he has made of the Government's progress towards eradicating child poverty. [167681]

The Secretary of State for Work and Pensions (Mr. Andrew Smith): As a result of our policies, the poorest families are, on average, £2,900 a year better off, and there are now 600,000 fewer children living on relatively
 
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low incomes than in 1997. I am confident that the measures that we announced in the Budget, not least the increase of £3.50 a week in the child element of the tax credit, benefiting more than 7 million children, will enable us to make further progress towards halving child poverty by 2010 and eradicating it by 2020.

Vera Baird : I am very grateful for that answer. The Work and Pensions Committee, on which I am privileged to serve, recently reported on child poverty, and it seems that congratulations will be due, because almost everyone expects the target of cutting child poverty by a quarter by this year to be met. The Committee thought that it would be harder to meet the target of halving child poverty by 2010, and it suspected—

Mr. Speaker: Order. I have asked the hon. and learned Lady before to ask a supplementary question rather than telling us about the Committee.

Vera Baird: May I do that?

Mr. Speaker: Yes, the hon. and learned Lady may ask a supplementary question.

Vera Baird: I am grateful for your guidance as ever, Mr. Speaker.

The Committee thought that £10 a child was probably necessary for the poorest children. Is that the scale of the challenge that we face, and can we meet it?

Mr. Smith: I welcome my hon. and learned Friend's comments, and those of the Select Committee. I stress that even the target for reducing child poverty by a quarter this year is demanding. We are pretty confident that we will hit it on a before-housing-costs basis; it is more challenging on an after-housing-costs basis. That is why we have taken so many measures, including the child tax credit increases to which I referred, the provision of additional child care and the new deal for lone parents, which raises their employment rate and is an important route through which to help children out of poverty.

The target for halving child poverty is demanding, but we make no apology to the House or the country for being absolutely determined to progress steadily towards the eradication of child poverty in the UK. It is one of the noblest aspirations of this Government, shared overwhelmingly by the people of this country, and Members on both sides of the House ought to join us in making sure that we achieve it.

Mr. Mark Field (Cities of London and Westminster) (Con): In trying to eradicate child poverty, will the Secretary of State recognise that there are specific and particular problems in London? Can he say something about the negotiations that he is having with the Chancellor of the Exchequer to ensure that some of the problems particular to London, such as child care arrangements, are being tackled so that his admirable goal, with which we would all agree, is achieved by 2010?

Mr. Smith: Yes, there is a particular challenge in London, not least because of high housing costs and the transport costs associated with working. That is one reason why we will be rolling out across London the
 
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return to work credit, giving extra money to lone parents returning to work, in recognition of the higher costs that they face. In addition, we are giving help through employment zones and, more widely, our employment programmes. I can assure the hon. Gentleman that our dedication to eradicating child poverty applies to London as well as to the rest of the country.

Miss Anne Begg (Aberdeen, South) (Lab): A Select Committee report showed that one of the major measures that has helped the Government to be on target to meet their goal is the introduction of the child tax credit, working tax credit and child care tax credit. However, those on income support have not yet migrated on to the new child tax credit. Will the Secretary of State make sure that the IT is working smoothly before that decision is taken?

Mr. Smith: Yes, we shall. Of course, people get the equivalent amount through existing administrative arrangements, but my hon. Friend makes a good point: it is important that the system is working properly before those people are transferred, because they are the ones who can least afford any interruption to their payment.

Mr. Paul Goodman (Wycombe) (Con): The Secretary of State knows that the Select Committee also said:

"Using the median income before housing costs figure would mask the true extent of child poverty."

Will he confirm that that is precisely what the Government have done, that 900,000 children have thereby been removed from the figures at a stroke, and that the End Child Poverty coalition was absolutely right to condemn that fix, saying:

"Children should be removed from poverty not just removed from the statistics."?

Mr. Smith: If the hon. Gentleman took the trouble to examine our proposed composite child poverty measure, he would see that that measure, which includes relative low income of 70 per cent. of median income and material deprivation, will take account of the costs and resulting poverty where people face high housing costs. We shall take no lectures from a party under which relative poverty doubled, and which gave the poorest families just £27 a week to help with the cost of a child, whereas the Labour Government are giving £58 a week. The increases in child poverty under the Conservatives made Britain's the worst record in Europe.

Mr. Bill O'Brien (Normanton) (Lab): When assessing children in poverty, will my right hon. Friend take into consideration the problems facing families as a result of the Child Support Agency failing to collect maintenance for children and carers? Will he do something to ensure that that sort of poverty is eradicated by the CSA doing its job and collecting maintenance where the assessment has been made?

Mr. Smith: My hon. Friend makes an important point. It is clear to the whole House that the performance of the CSA leaves a great deal to be desired, not least because of the failings of the IT system that was introduced. We and the chief executive and staff of the CSA, who are doing a good job in difficult circumstances, are determined to maintain the improvement that has been achieved—for
 
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example, some 17,000 families now get the child maintenance premium—but the agency needs to do better. We are determined to build on its performance so that, as my hon. Friend advocates, people get the child support they need, which is crucial to combating poverty.

Ms Karen Buck (Regent's Park and Kensington, North) (Lab): The Government are to be warmly congratulated on the progress made towards achieving the child poverty target for 2004, but the fact remains that 54 per cent. of children in inner London live in poverty. Among the principal reasons for that is that there is less part-time employment available and larger cost hurdles face people taking part-time jobs in London. Will he assure me that his officials are carefully considering ways to make part-time work available and to make it pay for families in inner London?

Mr. Smith: My hon. Friend, as ever, brings extensive knowledge, experience and positive ideas to this crucial debate. As I said, I believe that we are making progress in London, as elsewhere, but, for the reasons that she outlines, the challenges there are greater. I shall continue to look at what we can do to make sure that both part-time and full-time work pay. I mentioned the return to work credit, which has an important role to play.

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