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Unemployment (East Midlands)

3. Judy Mallaber (Amber Valley) (Lab): If he will make a statement on levels of unemployment in (a) Amber Valley and (b) the east midlands. [172711]

The Chancellor of the Exchequer (Mr. Gordon Brown): The claimant count in the United Kingdom has decreased by 50 per cent. since 1997. During that period, the claimant count in Amber Valley decreased by 1,087, which is a 53 per cent. fall; and in the east midlands as a whole, it decreased by 48,000, which is a 47 per cent. fall. The claimant count for Amber Valley now stands at 2.l per cent., and for the east midlands it is 2.7 per cent.—the lowest figures for unemployment for 30 years.

Judy Mallaber: With 1.9 million more people in work since 1997, the latest east midlands business survey indicates that there are some problems in recruitment, especially for skilled workers, and that the available
 
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labour pool includes many people who are severely disadvantaged. Will my right hon. Friend therefore confirm that instead of abolishing the new deal, as the Conservatives would, we will extend it to ensure that it overcomes those barriers, to enhance skills and qualifications, and in particular will he consider how we can extend the modern apprenticeships programme to ensure that it attracts women, who are often severely under-represented in some areas of skills shortage?

Mr. Brown: I am grateful to my hon. Friend. She has taken a major interest in the creation of jobs and the safeguarding of industry in her constituency, and I congratulate her on that. She will agree that even though in her constituency long-term unemployment is down by 85 per cent. and youth unemployment is down by 75 per cent., there are many people who the new deal wishes to get to and to help. The new initiatives from the Secretary of State for Work and Pensions are designed to help those people by giving them the chance to get jobs and to acquire the necessary skills. The future of my hon. Friend's constituency will be enhanced by the new deal for skills, more details of which will be announced next week by the Secretary of State for Work and Pensions.

I think that my hon. Friend will agree that abolishing the most successful employment programme in our history, which has already created 1 million jobs, and saying that it is a waste of money is a disastrous policy, but that is the policy of the Opposition. The shadow Chancellor should remember that unemployment in his constituency is now 0.9 per cent.

Mr. Mark Todd (South Derbyshire) (Lab): Does the Chancellor welcome the creation of additional jobs in South Derbyshire and the east midlands through the creation of a manufacturing plant for JCB engines in the Dove Valley business park just off the A50 as a further demonstration that manufacturing is far from dead in my constituency—it is alive and thriving? Has he witnessed also the growth in employment at Toyota, which is just down the road at Burnaston?

Mr. Brown: I am grateful to my hon. Friend, who has taken a big interest in the success and development of manufacturing in his constituency. Our aim is modern manufacturing strength. We have introduced research and development tax credits, which are available to the companies that he mentions; we have strengthened the Government's regional policy to make it possible for people to invest; and we are providing a manufacturing advisory service at a regional level. Unfortunately, every one of those services would be put at risk by the policies of the Opposition, who would not only cut the new deal but abolish all the help that we are rightly giving to manufacturing industry.

Pension Credit

4. Mr. Michael Jabez Foster (Hastings and Rye) (Lab): How many pensioners in Hastings and Rye are receiving pension credit. [172713]

The Financial Secretary to the Treasury (Ruth Kelly): At 31 March, 5,048 pensioners in Hastings and Rye were receiving the pension credit.

Mr. Foster : I am grateful to my hon. Friend for that reply. I congratulate her and the Government on the
 
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success of the pension credit in my constituency. It has made a great difference to many of my older constituents, many of whom are now more than £30 a week better off than they were under the Tory income support plan. However, does my hon. Friend share my concern that, should the Conservatives ever achieve office, their plans to abandon means-assessment would mean—

Mr. Speaker: Order. The hon. Gentleman is out of order and should please sit down. It is not for the Chancellor to answer those questions, but for the Opposition. The hon. Gentleman can write to the Opposition's party headquarters to find out about these matters.

Ruth Kelly: My hon. Friend is right to draw attention to the success of the pension credit in alleviating pensioner poverty. Indeed, if he compares the current average pensioner household with that in 1997, he will find that in real terms it is more than £1,350 better off as a result of the pension credit.

Gregory Barker (Bexhill and Battle) (Con): Help the Aged has described the pension credit as a "profoundly inefficient means-testing mechanism" that "is deeply flawed." How many pensioners in Hastings and Rye are entitled to that benefit but do not claim it for one reason or another? How many pensioners in Hastings and Rye have become subject to means-testing since the Government came to power in 1997? Is that why so many pensioners in Hastings and Rye feel profoundly let down by Labour?

Ruth Kelly: The hon. Gentleman's attitude is only too typical of the attitude of his party. I do not know how its Front-Bench spokesmen can claim that they are committed to tax credits while at the same time witnessing the hostility of individual Members. The proportion of pensioners now living in relative poverty is at its lowest since the mid-1980s, and is down by 0.5 million since 1996. Pensioners in Hastings and Rye, as across the country, are welcoming the introduction of the pension credit, and the poorest pensioners have benefited most.

Mr. Oliver Letwin (West Dorset) (Con): I hope that you will allow me to begin, Mr. Speaker, by telling you that it is now possible to reach Conservative central office on the web. There is no need to write.

The Financial Secretary is very proud that so many pensioners in Hastings and Rye are on pension credit. Does she realise that by making those pensioners depend on means-tested benefits, instead of giving them a proper basic pension linked to earnings, she is ensuring that people in Hastings and Rye have little incentive to save?

Ruth Kelly: The right hon. Gentleman is talking absolute nonsense. For the first time in history, under the pension credit, every single pensioner in this country has an incentive to save. Those with modest savings, and small occupational pensions, will be rewarded under the pension credit.

Mr. Letwin: I do not see how a pensioner in Hastings and Rye, who is losing between 40p and 85p in the
 
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pound on savings income, has been given an incentive to save. Will the Financial Secretary tell us how many pensioners in Hastings and Rye have been affected by the Chancellor's £5 billion raid on pension funds, and how many pensioners in Hastings and Rye will suffer from his attack on the tax advantages of ISAs?

Ruth Kelly: Pensioners in Hastings and Rye are better off now than they have ever been. On average, pensioners in Hastings and Rye are £18.50 better off through the pension credit and other measures that this Government have introduced than if, for example, the basic pension had been connected to earnings. The right hon. Gentleman draws attention to the advance corporation tax reforms. He more than anyone should know that that was an example of this Government reducing corporation taxes and making sure that pensioners have resources targeted on them when they most need it.

Mr. Letwin: It is a sure sign of what is going on in the Treasury at the moment if the Financial Secretary does not have a briefing telling her the answers to simple questions about Hastings and Rye. Let us turn to another pensions disaster that will deter pensioners in Hastings and Rye from saving, putting them on pension credit: the wind-up of their occupational pension schemes. Pensioners in Hastings and Rye who are in that position will have noted the Chancellor's statement in the Red Book that unclaimed financial assets should be "reinvested in society". Would not using those unclaimed assets to compensate pensioners in Hastings and Rye whose pensions have been devastated by wind-ups be a true investment in society?

Ruth Kelly: I am not going to take lessons at the Dispatch Box from a party whose leader, when Minister with responsibility for financial services, presided over the biggest pensions mis-selling scandal in history. The Opposition talk about giving pensioners compensation when pension schemes have gone bust, yet they refused to support the Second Reading of the Pensions Bill, which for the first time in history will protect the pensioner promise awarded to pensioners. Yet again, they raise false hopes while being committed to savage cuts in public expenditure. I wonder how they would explain that to pensioners who are suffering.

Mr. Dennis Skinner (Bolsover) (Lab): Is it not pretty evident that, when the shadow Chancellor ran away during the election campaign, he must have gone to Hastings and Rye in a blanket? That was when he was missing longer than Maxine Carr.

Ruth Kelly: My hon. Friend makes an excellent point. Unfortunately, the right hon. Gentleman did not reappear in the Labour seat, Hasting and Rye, but somewhere else in the country, wearing a toga. My hon. Friend knows how much pensioners have benefited from the measures introduced by this Government,
 
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particularly the poorest third of pensioner households who are £1,700 a year better off in real terms, in Hastings and Rye, than they were in 1997.

Norman Lamb (North Norfolk) (LD) rose—

Mr. Speaker: Order. The hon. Gentleman must speak about Hastings and Rye in his supplementary question, not North Norfolk, which is too far away. Can he manage that?

Norman Lamb: Thank you for that guidance, Mr. Speaker. I intend to concentrate fully on pensioners in Hastings and Rye. Will the Financial Secretary respond to the clear evidence given to the Treasury Committee by experts who said that pensioners in Hastings and Rye and elsewhere will be faced with a positive disincentive to save because of the extent of the means-testing introduced by the pension credit? Worse than that, anyone providing financial advice will clearly face the problem of mis-selling if they advise someone who is on a low or middle income on a pension product, because of the risk of losing out by not gaining the pension credit once they reach retirement age.

Ruth Kelly: I do not accept that. I think that all Governments have a duty to protect the welfare of the poorest pensioners, and it is a duty that this Government have taken seriously. Moreover, for the first time in history we can say unambiguously to every pensioner that his or her money will not be withdrawn pound for pound, and that there is a clear benefit from saving.

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