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Mental Health

3. Dr. John Pugh (Southport) (LD): What steps he is taking to get people with long-term mental health problems back into work; and if he will make a statement. [12303]

The Minister for Employment and Welfare Reform (Margaret Hodge): We want to support the many people with mental health conditions who want to keep their jobs or to return to work. For many, work helps them to maintain or regain their confidence and self-esteem and improves their mental health and well-being. Our new deal for disabled people and pathways to work are two schemes that demonstrate what works best for people with long-term mental health problems. We will build on that knowledge and success in the proposals that we expect to publish in the autumn.

Dr. Pugh: I thank the Minister for her response. Given that mental health problems account for as much benefit money as back problems, the public stigma attached to such problems and the lack of public understanding of them, does she agree with Mind that
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we need a more proactive approach both to helping people with mental health problems into work and to keeping them there?

Margaret Hodge: I agree entirely with that proposition. We do need a more proactive approach, which is why the Government have been introducing innovative new schemes such as pathways to work and the new deal for disabled people, and why the Green Paper that we shall put forward in the autumn will cover this very issue. I hope that the hon. Gentleman will join the debate which we hope will stem from that Green Paper.

Roger Berry (Kingswood) (Lab): One source of support for those with mental health problems is the access to work programme, and yet it seems to be one of the best-kept secrets in government. Three out of four employers have not heard of it, let alone know what it does. Will my right hon. Friend give a commitment to the House this afternoon that the Government will engage in a serious publicity programme in relation to access to work and ensure that the effects of that are properly funded—that there is more money for access to work?

Margaret Hodge: I hope that my hon. Friend will support me in the necessary cuts that might follow were we to double or treble that budget, which I agree is well used. That budget has been doubled since we have been in government, and has been used effectively. With the new obligations on employers arising out of disability discrimination legislation, we are considering how it is right to expect employers, especially public sector employers, to make reasonable adjustments in the workplace for some people with disabilities who work, and how we can reuse some of the money and resources thereby released to get greater take-up. The scheme is undoubtedly popular, and I would love to be able to expand it to its fullest. I agree with him that we should build on what works best.

Mr. Rob Wilson (Reading, East) (Con): Is the Minister aware that her Government are making significant problems for people who are trying to get back into work? I recently visited a mental health charity in my constituency that offers people four hours' work a week in return for the minimum wage. When the minimum wage rises to £5.05, either their benefit or the work that they do at the charity will have to be cut. Will she consider that urgently and try to remedy the situation?

Margaret Hodge: We are constantly reviewing the limits that enable people to do some work while retaining their full benefits, to have regard to changes in work rates and inflation. It is important for many disabled people who have been locked into benefit dependency for a long time to enjoy the opportunity of a few hours in work as they move into proper paid jobs—[Interruption.] I have just said that we constantly keep the matter under review, and I hope that the hon. Gentleman accepts that as an undertaking.
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Lyn Brown (West Ham) (Lab): Does the Minister agree that a good way of reintroducing people into work is through sessional and part-time work? If so, is she aware that the earnings disregard element within the jobseeker's allowance and income support has remained static for many years? Will she agree to consider that in the next Budget?

Margaret Hodge: We will always review all the earnings disregards to ensure that they are properly set so that we encourage those who have been out of the labour market for a long time to start re-entering it, and to ensure that people get paid the proper rate for the job that they do. We always keep that under review, and I assure my hon. Friend that we will continue to do so over the coming years.

Pension Protection Fund

4. Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): If he will make a statement on the Pension Protection Fund's statement of investment principles. [12304]

The Minister for Pensions Reform (Mr. Stephen Timms): The Pensions Act 2004 requires the board of the Pension Protection Fund to prepare and maintain a statement of its investment principles and policies. The statement was first published on 23 June, and is available on the PPF website.

Mr. Crabb: Does the Minister consider it consistent with concerns about moral hazard in pensions protection for the PPF to take equity stakes in companies?

Mr. Timms: In its first year of operation, no schemes will be transferred to the PPF. The first statement can therefore state confidently that 100 per cent. of its assets will be invested in bonds. It will, however, review the statement every 12 months. We can expect a revised statement once scheme assets and liabilities start to be transferred, as annexe 3 to the current statement makes clear.

I think that the hon. Gentleman has the Heath Lambert case in mind. I understand that the company sought clearance from the regulator for a restructuring that involved its pension fund taking a 10 per cent. equity stake in the new company. Especially in the light of the concerns about moral hazard that the hon. Gentleman rightly identified, before giving clearance the regulator must be sure that the company is heading for insolvency, so there would be a call on the PPF in any event. If the scheme were transferred to the PPF in the future, the PPF would hold that stake. I do not see anything inappropriate in that arrangement.

Richard Burden (Birmingham, Northfield) (Lab): Does my hon. Friend agree that one of the most important investments that the PPF makes on behalf of us all is in ensuring that those who would otherwise lose all their pensions, or a substantial amount of them, receive valuable support? I congratulate the Government on introducing that system, but problems are arising in relation to people who have taken early retirement. My hon. Friend will be well aware of the position at MG Rover, where some people could not
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even achieve the 90 per cent. of earnings, subject to the cap, that others below pensionable age will receive. Will he look into that? It could have perverse effects for the PPF.

Mr. Timms: I agree with what my hon. Friend says about the importance and value of the PPF's work in helping to rebuild confidence in pensions saving. I also pay tribute to the work that he has done—not least in a number of telephone calls to me—on behalf of his constituents working at Rover.

Under the arrangement made by Parliament, the PPF will provide 90 per cent. compensation for those who, immediately before the assessment date, are under the scheme's normal pension age. That applies to those who took early retirement, as well as those who are still in work. Otherwise, those who continued to work would be penalised. As my hon. Friend says, the amount is subject to a cap which is currently £25,000 a year.

It is necessary to establish the right balance between compensation, which we all want to be maximised, and the cost to other schemes through the levy. If we removed the 90 per cent. cap, there would be an additional cost of about £100 million a year to levy payers. I think we have set the right balance.

Mr. Nigel Waterson (Eastbourne) (Con): Does the Minister agree that at a time when large pension funds have moved from equities to bonds, it is at least counter-intuitive of the PPF to invest in the shares of companies that face financial difficulties precisely because of their pension deficits? Does he expect deals such as the one that was done with Heath Lambert to be rare events? Will he confirm that the details of that deal will be placed in the public domain? If not, why not?

Mr. Timms: Such deals will certainly be rare events, but, as I said, the arrangement that was agreed means that the Heath Lambert pension fund will obtain an equity stake in the new company. If it subsequently goes to the PPF, other assets owned by the Heath Lambert fund will go with it, but I do not think that that will happen very often. The regulator is aware of the impact of a company collapse on employment and will always bear it in mind, along with its primary duty to protect pension scheme members.

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