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Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions what assessment his Department has carried out of the impact on work incentives of (a) reducing the number of qualifying years needed to receive a full basic state pension and (b) gradually reducing the link between salary and state second pension accruals. 
The reduction in qualifying years for a full basic state pension combined with re- linking the basic state pension to average earnings will increase the return from working until 30 qualifying years have been attained, after which it would slightly reduce. However, those working past 30 years will continue to accrue rights to the state second pension.
These changes will be complemented by a gradual increase in the state pension age, which is likely to have much more significant effects on employment through
signalling the need for a behavioural change towards working longer in line with gains in average life expectancy.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions whether the calculations set out in figure 9 of the Pensions White Paper, Security in retirement: Towards a New Pension System assume that the age at which individuals become eligible to receive the guarantee element in pension credit rises in line with state pension age or remains at 65 years after 2020; and if he will publish a version of the table on the alternative assumption. 
James Purnell: Under our reforms, more people will be receiving state pensions based on their national insurance records, and there will be a more generous basic state pension due to the restoration of the earnings link. This provides a solid foundation for private saving. The guarantee credit will continue to provide a safety net and reforms to the savings credit will reduce the spread of means-testing and support the savings incentives that are an integral part of the reform package.
The calculations set out in figure 9 of Security in Retirement: Towards a New Pension System assume that the guarantee credit age of eligibility rises in line with the proposed increases in state pension age. The first column in the following table, shows the resulting figures for the cost of state pension reform from 2020. The second column contains the equivalent figures assuming the qualifying age for the guarantee credit remained at 65 from 2020, while that for all other pensioner benefitsincluding the savings creditrise to 68 by 2046, in line with the proposals set out in the White Paper. Estimates do not include any knock-on effects to housing benefit and council tax benefit. It is particularly important to note that no further policy decisions have been assumed, for example, relating to the behavioural effects on employment and savings, or to the structure of the tax, tax credit and benefit systems for people of working age.
|£ billion, (2006-07 price terms)|
|Additional cost of state pension reform under White Paper proposals||Additional cost of state pension reform under White Paper proposals but with guarantee credit qualifying age fixed at 65 from 2020|
1. Estimates of additional expenditure are consistent with the policy detail set out in the White Paper. Costs presented are based on long-term projections of United Kingdom benefit spend, consistent with the Budget Report 2006.
2. Estimates of additional expenditure will be sensitive to behavioural changes and depend on the exact policy detail. The figures are indicative only, and are based on expenditure on the relevant guarantee credit case load under the current system.
3. Additional expenditure presented in column 2, headed Additional costs of state pension reform under White Paper proposals but with guarantee credit qualifying age fixed at 65 from 2020 assume age of eligibility for guarantee credit remains at 65, while that for all other pensioner benefitsincluding the savings creditrise to 68 by 2046, in line with the proposals set out in the White Paper. Estimates do not include any knock-on effects to housing benefit and council tax benefit arising as a result of the suggested policy.
4. Costs include additional expenditure on working age benefits as in figure 9 of the White Paper. No further changes to working age benefit spend arising from a lower guarantee credit age of eligibility have been assumed.
5. Costs include the cost of uprating the guarantee credit by earnings and changes in spending on housing benefit and council tax benefit among pensioners.
6. Figures exclude the effect of personal accounts.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions by what mechanism he plans to accelerate the evolution of the state second pension as proposed in the Pensions White Paper, Security in retirement: towards a new pension system, so that new accruals become completely flat-rate by around 2030. 
James Purnell: Under the current system, state second pension would eventually become a flat rate benefit in around 2056. However, in line with the view of the Pensions Commission, we propose to speed up the flat rating process. To this end, the Government will introduce a new Upper Accrual Point which, in year one of the withdrawal of earnings relation, will be set at around the same value as the upper earnings limit. This point will be fixed and not subject to annual uprating of its value. Over a period of time, the earnings-uprated lower earnings threshold will converge on the fixed upper accrual point.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions if he will list the research by outside consultants commissioned by his Department in connection with pension reform since January 2004. 
James Purnell: Details of all commissioned research contributing to the evidence base for pension reform since January 2004 are contained in annex F of the Governments White Paper on pension reform (Security in retirement: towards a new pensions system, May 2006).
The following lists all research by outside consultancy firms (rather than research organisations or academics) connected to pension reform that has been commissioned since January 2004. This list includes projects involving the use of specialist
academic or expert economic advice as well as traditional research projects involving primary data collection or analysis.
Investment options in personal accountsCRA Intl (UK)
Competitive implications of alternative market structures: the microeconomics of NPSSCRA Intl (UK)
Research study to develop a counterfactual for private pensionsCRA Intl (UK)
Impact assessment of the NPSS on annuities marketCRA Intl (UK)
The value of choice and brands in personal accountsCRA Intl (UK)
Review of research relevant to assessing the impact of the proposed National Pensions Savings Scheme on household savingPWC
Research into the costs of capital for personal accountsPWC
Research into early policy development for personal accountsDeloittes
(a) projects undertaken by GAD, ONS or any other Government Department should not be included as they were delivered by civil servants
(b) projects commissioned by the Pensions Commission have not been included as the Commission was an independent body.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions what assessment he has made of the factors that would influence consumers choice of provider under the model for personal accounts set out on pages 52 and 53 of the Pensions White Paper Security in retirement: Towards a New Pension System. 
James Purnell: The value of consumer choice is an important criteria against which we will judge all delivery models. This issue was discussed further at our seminar on Consumer Choice on 20 September and we will publish our proposals in a personal accounts White Paper in December.
Mr. Philip Hammond: To ask the Secretary of State for Work and Pensions what the estimated cost to the Exchequer would be of deemed buy back if the rights to it were exercised by all those identified in the Ombudsmans report Trusting in the Pensions Promise. 
Mr. Laws: To ask the Secretary of State for Work and Pensions what proportion of those aged (a) 40, (b) 45 and (c) 50 years with incomes of under £20,000 per annum he expects to receive effective real returns on savings in personal pension accounts of (i) more than £2 for every £1 saved, (ii) between £2 and £1.50 per £1 saved, (iii) between £1.50 and £1 per £1 saved and (iv) less than £1 per £1 saved, assuming no saving prior to the stated age and a zero real investment return on savings; and if he will make a statement. 
However, the Department for Work and Pensions will be publishing later this year detailed analysis of the
expected returns from saving in a private pension, such as personal accounts, illustrative of individuals of different ages and incomes.
James Purnell: There has been widespread discussion with the public, the pensions industry and pension campaigners about uprating arrangements for state pensions as part of the National Pensions Debate and in informing proposals in our White Paper Security in retirement: towards a new pensions system.
Clive Efford: To ask the Secretary of State for Work and Pensions what the average cost to his Department was of Post Office card account transactions in the most recent year for which figures are available; and if he will make a statement. 
Sarah McCarthy-Fry: To ask the Secretary of State for Work and Pensions if he will take steps to ensure that disabled people are not restricted from applying for Remploy jobs by inappropriate job descriptions. 
Mrs. McGuire: The Department receives assurance from Remploy that they actively seek to employ disabled persons for all the companys posts and that all job descriptions are written to ensure they are fair and non-discriminatory to disabled people. We also receive assurance that the company complies with all disability discrimination legislation.
Sarah McCarthy-Fry: To ask the Secretary of State for Work and Pensions whether there are measures in place to prevent Remploy factories employing able-bodied people when there are unemployed disabled people who have the necessary skills. 
Sarah McCarthy-Fry: To ask the Secretary of State for Work and Pensions whether his Department issues guidance to Remploy factories on indirect discrimination against disabled employees; and what steps he takes to ensure that Remploy offers assistance to disabled employees to seek and obtain promotion. 
Mrs. McGuire: Remploy is a non-departmental public body. The Department does not issue specific guidance to Remploy on indirect discrimination against disabled employees, but receives assurance that the company complies with all disability discrimination legislation. All Remploy employees, including disabled workers, have a formal personal development plan in place and are regularly given the opportunity to discuss their long-term career goals and ways in which the company can meet their development needs.
Mrs. McGuire [holding answer 30 October 2006]: Jobcentre Plus spends around £300,000 a year marketing all its disability programmes, including Access to Work. Information about Access to Work is available in leaflets from Jobcentre Plus offices and on the Jobcentre Plus website. In addition, disability employment advisers are regularly in contact with local employers to give advice on job retention if the disabled employee is concerned about losing their job because of their disability, and will raise awareness of Access to Work when appropriate.
|Proportion of children in households with no-one in work for each year from 1992|
|As at spring:||Children in households with no-one in work (per cent.)|
Household labour force survey, spring quarters
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