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Personal Debt

12. Mr. Siôn Simon (Birmingham, Erdington) (Lab): If he will make a statement on his Department's strategy to assist people to manage personal debt. [218093]

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): The best way we can stop people getting into debt is to make sure that we help them get into work and increase their incomes, so the extra 2 million jobs that we have created and the rise in the national minimum wage announced last week, to which my right hon. Friend the Secretary of State has already referred, are important in the over-indebtedness strategy. A joint Department of Trade and Industry and DWP action plan on over-indebtedness was published in July 2004, aimed at increasing levels of financial capability and access to affordable credit and encouraging a savings culture to avoid over-indebtedness.

Mr. Simon: Admirably Churchillian though the Minister's attitude is—that the best way to stay out of debt is to earn more—in an age when gaining a credit card seems to have become a rite of passage and it is still possible, especially in working class communities, to borrow £500, repay £5,000 and still owe £10,000, can my hon. Friend tell us a bit more about what the Department could do to educate younger people to be as suspicious of strangers offering free money as they ought to be of those offering free sweets, free drugs or free anything?

Mr. Pond: My hon. Friend is right to highlight the dangers, especially for young people, of finding oneself heavily in debt as a result of taking up offers that sometimes seem too tempting to refuse. The strategy to which I referred is cross-departmental and is intended both to increase education about financial resources and to ensure that affordable sources of credit are available in communities where, due to low income and financial exclusion, which we are seeking to address, people find that the only available sources of credit are very expensive and draw them further into debt. We are also working with agencies outside Government; as Members know, the Financial Services Authority has a financial inclusion strategy. We need to ensure that we address the problems faced by the relatively small minority of households that are in debt and for whom such debt can be extremely dangerous.
 
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Mr. Nigel Waterson (Eastbourne) (Con): Does the Minister accept that the Government have created a society where it is easier to borrow than to save and where savings have almost halved since 1997? Is it any wonder that personal debt has spiralled out of control and pension savings, in particular, are hopelessly inadequate?

Mr. Pond: No, I do not accept that. Part of the strategy, as I explained, is intended to encourage a culture of saving—a culture that was badly damaged during the 1980s. Most of us consider credit to be something that helps us to balance our income and expenditure over time. A small minority of people—those in the 7 per cent. of households who find that their debt is such that it can be considered as over-indebtedness—need additional support and assistance, but most people's level of credit is quite sustainable. Our policies of economic stability, full employment, low inflation and low interest rates have ensured that far fewer people find themselves heavily in debt than did when the Conservative party was running the show.

Ms Karen Buck (Regent's Park and Kensington, North) (Lab): Law centres, citizens advice bureaux and other advice agencies are often the first line of defence for vulnerable people who have got themselves into debt, yet in many areas, including my constituency, the grant reduction by local authorities and the end of regeneration programmes such as the single regeneration budget have caused budget cuts in those services, sometimes leading to long queues up the road of people waiting for advice, as at Paddington law centre. Will my hon. Friend liaise with his fellow Ministers in the Office of the Deputy Prime Minister and the Lord Chancellor's Department to review the capacity of advice services to meet the needs of vulnerable people in personal debt?

Mr. Pond: I assure my hon. Friend that we are doing precisely that to ensure that the sources of advice are available. Of course, guidance is available to our own staff to identify those sources of advice for customers with debt problems. Since April, Jobcentre Plus personal advisers have been able to pay for the provision of debt advice, but we need to ensure that people are aware of the advice that is available and that we do everything possible to ensure that the agencies that provide that advice are sustainable.

Pension Protection Fund

14. Mr. Peter Lilley (Hitchin and Harpenden) (Con): Whether public sector (a) pension schemes and (b)   pension scheme members will be required to contribute to the Pension Protection Fund. [218095]

The Minister for Pensions (Malcolm Wicks): A scheme that is eligible for protection under the Pension
 
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Protection Fund will have to pay the levy regardless of whether it is a public sector scheme. However, most public sector schemes, including those with a Crown guarantee, will not come within the ambit of the PPF.

No statutory provision requires schemes to pass on the costs of the levy to their members. How the costs of the levies are met will be for scheme trustees to decide. It is worth remembering, however, that we expect the levies to average out at about £20 per member per annum and only £10 in the first year.

Mr. Lilley: I am grateful to the Minister for that reply. I understand the Government's reason for not asking taxpayers to underwrite the Pension Protection Fund—many taxpayers are not members of pensions funds—but how do they justify not asking members of public sector pension funds, which are underwritten by the taxpayer, to contribute to the PPF when they require members of private sector schemes to do so? Surely, we as Members of Parliament are beneficiaries of that unfair discrimination, and we all ought to contribute to the protection scheme.

Malcolm Wicks: Let us remember that the PPF is coming into being because of the tragedy and scandal whereby pensioners are left bereft when a company goes bust and a scheme is underfunded. A common-sense comparison would suggest that most people in public sector schemes—the civil service and those in local government—are not likely to see their scheme go bust, although some non-departmental public bodies do not have a Crown guarantee and will pay a levy. Such bodies include the Arts Council, the Legal Services Commission, Remploy and the royal household.

Mr. Dennis Skinner (Bolsover) (Lab): What advice can the Minister give to several hundred ex-Anglo United workers who have been robbed blind by their employer now that Anglo United, which used to be called Coalite, has finished? Is he aware that, in a previous answer, he suggested that Anglo United was not in the scheme that was announced on 22 February? Why was it not included? Why is it not included in the protection plan? Surely the Government should find a way to try to protect the few hundred workers at what was Bolsover Coalite—their previous employer has robbed them blind.

Malcolm Wicks: I hope that my hon. Friend will allow me to write to him about that scheme. The financial assistance scheme covers 380 pension schemes. I do not know the particulars of the scheme that he mentions, but the House must be very careful not to ask the taxpayer to underwrite schemes with solvent employers because some people may seek to dump pension liabilities on the taxpayer or the new PPF.

 
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BILL PRESENTED

Mr. Speaker: Order. I understand that the hon. Member for Stroud (Mr. Drew) has been held up because of the snow. Therefore, the notice for the presentation of his Bill will take place at some other time.

 
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Prevention of Terrorism Bill (Programme) (No. 2)

3.30 pm

The Minister for Crime Reduction, Policing and Community Safety (Ms Hazel Blears): I beg to move,

That the following provisions shall apply to the Prevention of Terrorism Bill for the purpose of supplementing the Order of 23rd February 2005—

1. Paragraphs 3 and 4 of that Order shall be omitted.

2. Proceedings in Committee of the whole House and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion six hours after the commencement of proceedings on the Motion for this Order or at 10.00 p.m., whichever is the later.

3. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion one hour after the commencement of those proceedings.

In programming today's business, the Government are, of course, very conscious of the speed with which we are having to consider this legislation, but we have tried, as far as possible, to ensure the maximum time available to the House to consider its provisions. Clearly, we are in this position today because of the House of Lords judgment that was made on 16 December. That judgment set out the reasons why it was considered that the existing part 4 powers were not compatible with the European convention on human rights. Therefore, it is necessary for us to have a new legislative framework in place by 13 March.

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