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House of Commons

Monday 8 November 2004

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

New Deal

1. Laura Moffatt (Crawley) (Lab): How many disabled people the new deal for disabled people has helped back to work. [196316]

The Secretary of State for Work and Pensions (Alan Johnson): Since the national launch of the programme in 2001, more than 45,000 people have gained a job through new deal for disabled people.

Laura Moffatt: I am sure that everyone is delighted to hear that news, but it is important to say that when disabled people need access to the workplace they require extra help and support. This fantastic programme has provided that. Will my right hon. Friend tell the House exactly what extra training goes on with advisers to assist people with disabilities into the workplace?

Alan Johnson: The important contribution is made by the disability employment advisers: their expertise, as well as the involvement of the employer through various groups, has given us those extraordinary access figures. It might be as well to point out that the 45,000 figure is the number of disabled people who have obtained work through the new deal for disabled people. As a result of all the new deal programmes taken together, however, 180,000 disabled people have found work, so we are talking about the expertise not only of the disability employment advisers in the new deal for disabled people, but of those who work in other programmes under the new deal.

Paul Holmes (Chesterfield) (LD): What reassurance can the Secretary of State offer to those organisations such as the Shaw Trust and the Groundwork Trust, which are being told this year that they must cut back on the number of disabled people whom they are successfully placing in work?
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Alan Johnson: The reassurance we would give them is the reassurance that we have already given them; the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Liverpool, Garston (Maria Eagle), has made that clear on several occasions. We are looking very carefully at the needs of providers. This is a problem of success in the sense that the Shaw Trust, which does a marvellous job, as do the other providers, has been more successful than we thought in getting disabled people into work. We are constantly evaluating the programme, and we are having regular discussions. We think that as this is, uniquely, an outcome-funded arrangement, we can find a solution to the problem that the Shaw Trust has identified.

Pensioner Poverty

2. Mr. Alistair Carmichael (Orkney and Shetland) (LD): What steps he is taking to tackle pensioner poverty. [196317]

The Secretary of State for Work and Pensions (Alan Johnson): We have taken many steps to tackle pensioner poverty, including the introduction of pension credit and winter fuel payments. As a result of those and other measures, during 2004–05 we will be spending nearly £10 billion more on pensioners, including £5 billion more on the poorest third. That means that the poorest pensioners are, on average, £1,820 per annum, or £35 a week, better off in real terms than they would have been under the 1997 system.

I am today publishing in the Library the pension credit take-up figures to September 2004. They show that pension credit is playing a vital role in helping to give more money to the people who need it most: 2.62 million pensioner households are benefiting, with 3.18 million individuals receiving an average award of about £41 a week.

Mr. Carmichael: I thank the Secretary of State for that very full answer. He will be aware that his Department's own figures showed that in 2002–03 some 2.2 million pensioners were still living below the poverty line. Given his welcome recent statements in which he accepts there were problems with pension credit take-up and that it provides a disincentive to save and his acknowledgement that he is veering towards the idea of a citizen's pension based on residency, how much longer will he be veering and when might we eventually see flesh put on those interesting and laudable ideas?

Alan Johnson: I can veer exhaustively; I shall be veering for a while longer. On the particular point about pension credit, in the hon. Gentleman's constituency 1,858 households and 2,153 individuals are benefiting. While the issue of take-up should be at the forefront of our minds, we are two thirds of the way towards our target in a third of the time available. Pension credit has just passed its first anniversary, and in Orkney and Shetland and elsewhere it is making a remarkable contribution.

Mr. Stephen Hepburn (Jarrow) (Lab): Why are we, on the one hand, quite laudably giving out those benefits to pensioners to reduce pensioner poverty yet, on the other, making it harder and harder for them to collect
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those benefits by allowing the closure of post offices? I know it will be said that that is a matter for the Post Office, but will he use his good offices through the Department of Trade and Industry, his own Department and, indeed, the head of the Post Office service to ensure that pensioners' considerations are taken into account before any future closures?

Alan Johnson: That takes me back to Department of Trade and Industry questions when I started off as a Minister. I understand the importance of my hon. Friend's point. We are the first Government to provide £2 billion a year to protect the rural network and post offices in urban deprived areas. As for the rest of the network, sub-postmasters told us that they needed to ensure that they had the capability to make a proper living; otherwise they would go out of business. That is what the urban regeneration programme is about.

Sir Peter Tapsell (Louth and Horncastle) (Con): Will the Secretary of State publicly castigate a solvent foreign company that is threatening 400 of its former British employees with pension poverty? Has he seen the documents that I sent to his helpful Minister for Pensions from those pensioners, showing that Nikko Europe plc put its British pension scheme into wind-up in deficit on Christmas day 2001? Despite Nikko declaring profits last year of more than $400 million, it has so far declined to make good the deficit, as it could well afford to do, and is forcing those 400 deferred pensioners through a period of prolonged and acute anxiety.

Alan Johnson: I understand that the employer, as the hon. Gentleman said, is solvent. The hon. Gentleman has been in correspondence with my hon. Friend the Minister for Pensions and now that he has raised the matter at Question Time, I will take a personal interest in it.

Mr. Frank Field (Birkenhead) (Lab): Does the Secretary of State realise that in his enthusiasm to counter pensioner poverty, the Liberal Democrats may have misread the answer that he gave at our last Question Time? Does he accept that while a citizenship pension might be a useful, additional tool to help the very oldest of our pensioners, it is not an avenue down which the Government are going, and that while our national insurance scheme has disadvantages, which need reform, reform will come in that direction and not via a citizenship pension?

Alan Johnson: That answer was not given at the last Department for Work and Pensions questions but during the Opposition day debate on pensions two days later. Let me make this point: the problem that I am interested in tackling, which Members on both sides of the House should be interested in tackling, is pensioner poverty. Two thirds of those in abject poverty are women, for the very good reason that they have not built up enough national insurance contributions. Fifty per cent. of women do not have a full state pension, compared with only 10 per cent. of men, and some women retiring now are in the same position. I reassure my right hon. Friend that we are determined to resolve that problem. The citizen's pension is one way of doing
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so—I have no wish, as I said recently to the Select Committee, to abrogate the contributory principle or to create more problems than we solve. I am concerned to overcome pensioner poverty, however, as we all should be, as it is a very real problem for millions of women in our society.

Mr. David Willetts (Havant) (Con): May I ask the Secretary of State about another aspect of pensioner poverty? Tackling pensioner poverty in the future means insuring company pensions with an effective pension protection fund. We agree with the Government on that, but it would be perverse if a flat-rate levy penalised well-funded schemes. Will he tell the House today what position he will take on the defeats that the Government suffered in the other place last week? Will the Government seek to reverse their decision to introduce rapidly a risk-related levy that is significantly bigger than the flat-rate levy?

Alan Johnson: I have committed the Government, as has my hon. Friend the Minister for Pensions on many occasions, to introduce a risk-based levy as soon as possible. We had opted for a different route towards that levy because of the practical problems that we had identified. I have not yet taken full cognizance of the decisions reached in the other place, but there is no disagreement between us on the need to move to a risk-based levy as soon as possible. I will examine the practical difficulties and seek to resolve those in accordance with the decisions made in the other place.

Vera Baird (Redcar) (Lab): Irrespective of longer-term measures, perhaps such as a citizen's pension, will my right hon. Friend consider some quick changes now to help those women who will soon retire to have better basic state pensions: for instance, scrapping the 25 per cent. rule, under which any national insurance contributions of less than 10 years do not count towards a pension at all? Does he agree that that is unfair, that all contributions should count equally, and that that change could be brought about without primary legislation and without adding complexities to the pension system? That could help women who are about to retire to have a larger basic state pension of their own.

Alan Johnson: I recognise the contribution that my hon. and learned Friend has made in this regard. I shall consider her suggestion, and other constructive suggestions made by Members. The report on women's pensions that we are pledged to publish next year will allow us to do that. The Turner commission included a separate chapter on women's pensions, which was a very good move on the part of the Pensions Commission.

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