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Occupational Pensions

5. Mr. Gordon Prentice (Pendle) (Lab): What further consideration he has given to the recommendations of the parliamentary ombudsman on occupational pensions. [93400]

The Minister for Pensions Reform (James Purnell): We have been considering the ombudsman’s report in the light of the Public Administration Committee’s report on this issue and will publish the Government’s response shortly.

Mr. Prentice: That is a very encouraging reply. Members will recall that the parliamentary ombudsman found that information provided by the Government to those taking out occupational pensions was

yet to date the Government have refused to take any responsibility. People outside and inside the Chamber will take great encouragement from my friend’s saying that the Government are now prepared to look at the matter again.

James Purnell: I thank my hon. Friend for that. I am sure that he, along with other Back Benchers, will welcome the fact that the Government have found £2 billion for this. It is in no way fair to say that we have done nothing about it. We recognised the plight of people in this situation and we are helping 40,000 of those affected by it.

Peter Viggers (Gosport) (Con): Can the Minister confirm that although the 00 series for longevity has recently been published, most actuaries of occupational pension schemes still rely on the 92 series, which is based on statistics gathered between 1989 and 1992? Does he agree that that means that actuaries are very much out of date on longevity and underestimate the amount of pension fund deficits?

James Purnell: The hon. Gentleman is right to say that longevity statistics have traditionally underestimated what the change would be. We said that as part of our state pension reforms we will have regular reviews of longevity trends to ensure that we get the right figures as we move forward to raising the state pension age. However, that is not an issue that goes to the heart of our discussion about the ombudsman.

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Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): In a written question on 25 July, I invited the Minister to give an estimate of what partial restoration would involve and the cost incurred in response to the ombudsman’s report. The Minister replied that that could not be done because it was unclear what partial restoration meant. In responding to the ombudsman’s report, will the Government make some attempt at a gradation of what partial restoration may mean and the costs associated with that?

James Purnell: If I understand my hon. Friend’s question correctly, it depends on the number of years and the proportion of core pensions that we would expect to restore. However, we will not prejudge today our response to the Select Committee—we obviously have great respect for it and the ombudsman. We have set out in the past why we disagree with her findings, but the key point for all hon. Members is that £2 billion is in place to help 40,000 people.

Mr. Edward Garnier (Harborough) (Con): The Minister knows that pensioners of British United Shoe Machinery in my constituency and elsewhere in Leicestershire are some of the worst affected by the collapse of the occupational pensions system. Dr. Ros Altmann has described it as one of the worst cases. I hope that the Minister can reassure me that the Government’s response will be relevant to my constituents who have been affected by the collapse and not simply brush off the ombudsman’s findings as some inconvenient piece of bad news.

James Purnell: We disagree that it is one of the worst cases of maladministration. Which bit does the hon. and learned Gentleman say is maladministration—the Conservatives’ implementation of the 1981 insolvency directive, the Pensions Act 1995, which the shadow Foreign Secretary took though the House, or the leaflets and the statements that the ombudsman criticises? We do not believe that it was maladministration. If the hon. and learned Gentleman does, is he saying that the Conservative Government got it wrong?

Richard Burden (Birmingham, Northfield) (Lab): My hon. Friend knows that the substance of many of the issues that the ombudsman’s report covers could end up involved in some legal action. Although it would be inappropriate for us to discuss the substance of that, is he aware that some of the affected pensioners, who have already lost a great deal of money, would feel it to be unfair if, in the event of a court case that they lost, the Government sought to recover costs from them? Those people have already lost a lot. At least recovering costs should be taken off the agenda.

James Purnell: That is not what we have said. We have held a dialogue with lawyers, which was conducted on terms that were agreed across Government. All we said was that if those affected want to claim that their case fits the principles whereby the Government have agreed to waive costs in the past, they need to present that case. They have not yet done so.

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6. Mr. Shailesh Vara (North-West Cambridgeshire) (Con): How many women are expected to reach state pension age before 2010; and if he will make a statement. [93402]

The Minister for Pensions Reform (James Purnell): Approximately 1 million women are expected to reach state pension age of 60 between 2007 and 2010.

Mr. Vara: Given the large number of women who will reach basic state pension age by 2010, does the Minister share my concern that women in the same generation will not all be entitled to the same basic pension rights as the rest of their peer group?

James Purnell: It is obvious what the Conservatives are doing—

Mr. Vara: Answer the question.

James Purnell: I will answer the question. There is a popular Labour policy and Conservatives want to jump on the back of it—of course, we welcome their support. The Conservative party does not have a policy of introducing changes before 2010. Our policy will increase the proportion of women who get a full state pension from 30 per cent. to 70 per cent. by 2010. If the hon. Gentleman continues to ask about the issue, we will point out to people outside the House that, before 1997, the last thing that had been done to increase coverage for women was Barbara Castle’s introduction of home responsibilities protection in 1978. The policy has been welcomed by the Equal Opportunities Commission and the Fawcett Society. It is a major move forward in coverage for women and the hon. Gentleman should welcome it.

Mr. Nigel Waterson (Eastbourne) (Con): Will the Minister confirm that up to 250,000 people, mostly women, currently pay additional voluntary contributions towards their pensions, but that, under the Government’s proposals, they will receive no benefit by doing that? Should not the Government come clean with those women now and tell them the true position as soon as possible or is the Minister prepared to risk another misinformation scandal and demands for compensation by those affected?

James Purnell: The hon. Gentleman is right to raise that point. When we issue forecasts, we make it clear to people that the policy is changing. On Second Reading of the measure, we want to work with his party on exactly how the information can be made clear to people. However, I do not believe that his party’s policy is to return those contributions to those who made them. It is a traditional principle in the social security system that one makes payments under the rules. If the rules change, people are not reimbursed for that.

Post Office Card Account

7. Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): What progress has been made in developing a replacement for the Post Office card account for the payment of benefits after 2010. [93404]

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The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): Instead of a single replacement for the Post Office card account, there will be a range of alternative banking products. Post Office Ltd has already launched one new product and is developing others, likely to be launched in the near future.

The objective remains to migrate customers onto accounts which will do more for them than the POCA. But for those who, for whatever reason, cannot do that, there will be a new Government-supported product. Discussions are already taking place with a view to tendering for that product.

Danny Alexander: I am grateful for that answer, and I am sure that Ministers at the Department of Trade and Industry will be grateful for it too, given their frustration—expressed in today’s Financial Times—at the Department for Work and Pensions’ resistance on this issue. Will the Minister assure the House that, whatever products follow the Post Office card account, procedures will be put in place for people to be migrated automatically to those new products, so that they do not have to face Government-induced hurdles to collecting their benefits and pensions at the post office when the change takes place?

Mr. Plaskitt: Of course we are going to make the migration as smooth as possible. The migration process is the joint responsibility of ourselves and the Post Office, as the hon. Gentleman will know, having seen the preamble to the contract for the Post Office card account. We have done some piloting on the migration, and I have placed the results in the Library. The Post Office will also begin a migration exercise shortly, and it will be a very smooth exercise, just as the hon. Gentleman requests.

Michael Connarty (Linlithgow and East Falkirk) (Lab): It is quite clear that the 4.5 million people who use the Post Office card account thought that they had an agreement with the Government when we introduced the account, at the time when it was first threatened to take away all forms of post office benefit payments. If anything happens to the account and people are not migrated to new accounts, this will cause great problems not only for the elderly who do not have bank accounts but for the small businesses that are our local post offices, run by postmasters and postmistresses throughout the country. Is the Minister willing to give those small businesses a guarantee that their livelihoods and futures are not threatened by the withdrawal of the Post Office card account?

Mr. Plaskitt: First, it is not a withdrawal of the account. We are simply honouring the contract that was signed in 2003 and which runs until 2010, and we will continue to do so. There is no change whatever on that. My hon. Friend would be right, if it were the case that there was to be no alternative to the existing Post Office card account. However, there will be a range of alternatives. Some are already in place, and some are being brought in by the Post Office. As I have said throughout, there will also be a successor Government-backed account for those who do not take up any of the other, better options that are available now and that will become available in the near future.

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Mr. John Greenway (Ryedale) (Con): I think that the Minister is saying that the 4.5 million people who thought that they had the ability to get their benefits from their post office will still have that ability. Will he make that clear: yes or no? Will he also make it clear that his and other Departments have a commitment to the future of our post office network? One third of the post offices in Ryedale have closed since 1997. If we lose any more, the Post Office will not be able to provide a proper service to a great many people, especially the elderly.

Mr. Plaskitt: I recall about 3,500 post offices closing under the last Conservative Government, by the way. However, I entirely understand the hon. Gentleman’s point about the importance of being able to collect pensions and benefits from the post office, and we have repeatedly said that we shall continue to honour our undertaking on that. At the moment, one vehicle for achieving that is the Post Office card account, but it is a very limited type of account—the Post Office itself says that. It does nothing to promote financial inclusion, for example. So if we can replace it, as we are now beginning to do, with alternative accounts that are post office-based and that are better and offer greater functionality, that will provide a better deal for our customers receiving their benefits and pensions, and potentially a better deal for the Post Office as well.

Mr. Brian Jenkins (Tamworth) (Lab): My hon. Friend will be aware that, in the poorest communities in many parts of the country, the only way in which people can access cash without paying a fee is through the Post Office card account. I understand what he is saying about successor accounts, but will he give the House an assurance that those accounts will be operated through the existing network? It is okay for someone to have an account, but without a post office, it would be useless.

Mr. Plaskitt: Yes, I can give my hon. Friend the same answer that I have given to previous questions. The objective is to ensure that those who wish to receive their benefits and pensions at the post office can continue to do so. Even today, 25 bank accounts—with a potential 20 million account holders—have post office accessibility. At the moment, however, only 2 million of those account holders choose to exercise the right to use their local post office as a bank branch. I am having discussions with the Post Office about ways in which we might be able to promote this facility and encourage more people to use their local post office to access their bank account.

Philip Davies (Shipley) (Con): People in Bingley in my constituency are at risk of losing their post office altogether, not because the Post Office wants it to close but because it is difficult to find someone to take on the franchise that has just been given up. Is the Minister aware that the dismantling of and uncertainty about the Post Office card account is one of the main reasons preventing someone from taking on the franchise? Can he therefore pull his finger out and sort this out so that people in Bingley can retain the post office that is crucial to them and to the businesses that it supports?

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Mr. Plaskitt: I am sorry if the hon. Gentleman is in doubt, but I assure him that the Post Office is not, and nor is the National Federation of SubPostmasters. Recently, I met its general secretary, Colin Baker, and since then he has published an article commenting on the meeting, which I shall quote for the benefit of the hon. Gentleman and his constituents:

It is understood by the Post Office and postmasters, and I hope that it is now understood by the hon. Gentleman.

Chris Bryant (Rhondda) (Lab): In Rhondda, 16,300 people draw their benefits through the Post Office card account system every week, and they are bewildered about what will happen in future. If, over the next three years, we are to migrate 16,300 people on to some other system, is it not vital that that system should be simple, easy to transfer to and well publicised? Would it not make a lot of sense if post offices were fully able to advertise all the financial services that they can offer, rather than just some of them?

Mr. Plaskitt: I agree with my hon. Friend that the process needs to be simple and that transfer needs to be easy. I think that he will find that the migration exercise that the Post Office is about to undertake will confirm that all of that is possible to achieve.

Mr. David Ruffley (Bury St. Edmunds) (Con): On 8 May, when I asked the Minister what replacement account the Government would offer to POCA holders, he said:

the Post Office—

The Opposition therefore welcome the Minister’s apparent change of heart today. Can he guarantee, however, that the more vulnerable, unbanked, Post Office card account holders who want to keep their existing POCA will be able to do so?

Mr. Plaskitt: We have always made it clear—

Mr. Ruffley: Is that a yes?

Mr. Plaskitt: The problem with the hon. Gentleman is not his volume but his vertical hold.

We have always made it clear that Post Office card accounts will have a range of replacements. The hon. Gentleman suggested that I had somehow changed position on the Post Office introducing its own accounts. I have not. The accounts that it has already introduced, and those that it plans to introduce, are its accounts, its design and not a matter for me. Of course, however, we remain in discussion with the Post Office about that. I have also said throughout, as I have repeated today, that a successor product to the Post Office card accounts will be available to those who do not transfer to any of the existing alternatives or other options that will come into being between now and 2010.

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Disability Discrimination Acts (Departmental Policy)

8. Joan Walley (Stoke-on-Trent, North) (Lab): What assessment he has made of the compatibility of his Department’s communications and computer policy with the Disability Discrimination Acts. [93405]

The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): The Department’s public information policy contains accessibility guidelines to ensure that the Department meets its obligations under disability discrimination legislation. It produces written information in a number of accessible formats such as Braille, audio and large print.

Joan Walley: I thank my hon. Friend for that reply, but will she take a close look at what is happening with the jobcentre in Stoke-on-Trent? People with dyslexia are asking to be kept in touch with the Department either by e-mail or phone, but they are still getting the same letters churned out by the central computer. When the disability equality scheme comes into effect on 4 December, will she make sure that those concerns are fully addressed by Government?

Mrs. McGuire: I thank my hon. Friend for her supplementary question. I know that she does a lot of hard work in her constituency on disability issues. The Department is fully committed to being an exemplar, both in the provision of online and telephony services to our disabled customers and as an employer. When we publish our diversity and equality action plans later this year, we will highlight where there is a requirement for review and improvement of our systems.

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