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House of Commons

Monday 8 January 2007

The House met at half-past Two o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked—

Benefit Sanctions

1. Natascha Engel (North-East Derbyshire) (Lab): What assessment he has made of the impact on people from vulnerable groups of Jobcentre Plus staff targets for benefits sanctions; and if he will make a statement. [113146]

The Secretary of State for Work and Pensions (Mr. John Hutton): Jobcentre Plus does not operate a system of staff targets for benefits sanctions.

Natascha Engel: I wish Members a happy new year. Does my right hon. Friend agree that the principle of fairness underpins the rights and responsibilities agenda? In that spirit, to avoid claimants discovering that their benefits have been suspended only when they cannot take money out of a cashpoint, will he consider introducing a scheme whereby Jobcentre Plus directs such claimants to an independent adviser such as Citizens Advice or, in my area, Derbyshire Unemployed Workers Centre, to give them truly impartial help and support?

Mr. Hutton: Yes. It is important that the eligibility rules for jobseeker’s allowance are consistently applied across the country, which is what we are trying to do. No one should find out that their benefit has been reduced, however, when they arrive at the cashpoint to withdraw it. A proper process should be followed, including a proper appeals process, and I would expect that to happen in every case.

Mr. Michael Fallon (Sevenoaks) (Con): Given that, in the United States, former President Clinton introduced the sanction of time-limited benefits, to the advantage of claimants and the taxpayer, may we assume that that option is too radical for new Labour?

Mr. Hutton: We do not plan to introduce time-limited benefits, and I suspect that no Conservative Front Bencher does so either. Jobseeker’s allowance is already a time-limited benefit.

Mr. Frank Field (Birkenhead) (Lab): Will the Secretary of State at some stage consider the sanction of time limiting benefit? Is not it true that since we came to power the number of people in work has increased by 2.5 million, and that 2 million of those jobs have been filled by immigrants? The working age count, however, has fallen by only about a quarter of a million from 5.6 million to 5.4 million. Does not that suggest that we need to rethink radically our welfare reform programme?

Mr. Hutton: Work is under way in the Department for Work and Pensions to consider the whole suite of welfare-to-work policies. It is right that we keep all aspects of those policies under review. My right hon. Friend, for whom I have a great deal of respect, urges me to pursue a course of action in relation to general time limiting of benefits that I do not want to follow. We have significantly reduced unemployment, which has benefited all our constituents, and we will continue to pursue the right welfare and economic policies to continue to reduce benefit dependency.

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Mr. Peter Bone (Wellingborough) (Con): Last year, unemployment in Wellingborough increased by more than a fifth, and it is now more than nine years since the Government came to power. How will the Government’s policy on benefits sanctions help my constituents to find employment?

Mr. Hutton: There must be a combination of the right macro and micro-economic policies and the right welfare reform policies, which make it clear to those who are claiming, for example, jobseeker’s allowance that they are required actively to seek work. When they are not doing that, such behaviour must have a proper consequence.

Child Poverty

2. Mr. David Kidney (Stafford) (Lab): What recent progress has been made in reducing relative child poverty; and what additional steps he plans to take to reduce child poverty further. [113148]

The Secretary of State for Work and Pensions (Mr. John Hutton): On an after-housing-costs basis, 800,000 fewer children are living in relative low-income households in 2004-05 than in 1997, and 2 million children have been lifted out of absolute poverty. Those reductions have been made possible by the introduction of tax credits, the success of the new deal and 10 years of sustained economic growth, all of which have resulted in those on the lowest incomes seeing larger proportional increases than the better-off. We will set out further proposals to reduce child poverty shortly.

Mr. Kidney: I am grateful for that answer. In 2005, we were slightly behind our historic target of eradicating child poverty in a generation. Does the Secretary of State agree with the Joseph Rowntree Foundation’s research that found that we need to spend a slightly higher proportion of our national wealth to get back on track in 2010? Does he accept recommendations such as the Child Poverty Action Group’s suggestion of higher universal benefits such as child benefit, or Save the Children’s suggestion of higher targeted benefits, with seasonal grants for low-income families? What options is he considering to get back on track?

Mr. Hutton: I thank my hon. Friend for parts of his question. Matters relating to child benefit, as my hon. Friend and the House will know, are for the Treasury, not the Department for Work and Pensions. As I said, we are considering a range of new initiatives to allow the Government and our country as a whole to make further progress in reducing child poverty. I want to set those out shortly.

Mrs. Maria Miller (Basingstoke) (Con): Despite the Government’s policies, two out of every five children in London still live in households in which the adults are not working. Will the Secretary of State take the opportunity today to outline how the Government will change their policies, particularly in relation to children in London, to make them more effective in future?

Mr. Hutton: The hon. Lady is right to draw attention to the particular problems of London, and I agree with her assessment. London is the richest and most
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productive city in Europe, yet child poverty is unacceptably high in our capital city. As I said, we will set out a range of proposals in the near future to try to address some of those problems, including the problems of London. I would not, however, want any Member to draw the conclusion from these exchanges that child poverty had increased under this Government; it has not. It has fallen significantly, at a time when national income has been rising sharply. That is the complete opposite of what happened during the 18 years of Conservative government.

Bob Russell (Colchester) (LD): Does the Secretary of State accept that child poverty and poor housing often go together? Does he agree that had new Labour built as many council houses during its first 10 years in power as the Conservative Government did during their first 10 years in power, fewer children would now be living in poverty?

Mr. Hutton: Obviously, there is a connection. The Government have a strong and proud record on social housing, on which we will seek to build. However—with respect to the hon. Gentleman—these are questions to the Secretary of State for Work and Pensions, not questions to the Secretary of State for Communities and Local Government.

Sir Patrick Cormack (South Staffordshire) (Con): The Secretary of State thanked the hon. Member for Stafford (Mr. Kidney) for “parts of his question”. Which parts were they?

Mr. Hutton: The good parts.

Mr. Philip Hammond (Runnymede and Weybridge) (Con): Last November, the Conservative party released figures showing that since 1996-97 there had been a 400,000 increase in the number of people living in severe poverty before housing costs. On 29 November, the Secretary of State responded to that by saying that income after housing costs was the proper measure, and I note that he just used that term again.

Departmental publications are very clear on the point. “Measuring child poverty” states that the Government will use a before-housing-costs measure. “Delivering on Child Poverty”, published only last November, says:

Will the Secretary of State make it clear whether he is telling us that he has changed his policy on the future measurement of child poverty? Is “after housing costs” now the Government’s preferred and only measure?

Mr. Hutton: No, it is not our preferred and only measure. It is right that we publish both before and after-housing-costs figures; but in the case of the group to whom the hon. Gentleman refers—those on incomes that are less than 40 per cent. of the national average—it is important to look at after-housing-costs figures, because people in those circumstances are likely to be receiving help with housing costs. The hon. Gentleman has arrived at his convoluted and distorted image of poverty in the United Kingdom not by
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comparing this Government’s performance with that of the last Conservative Government but by citing that Government’s performance, because his figures included the last four years of their record.

Mr. Hammond: With respect to the right hon. Gentleman, what we are trying to do is be clear about how the target is to be measured in future. According to the summary of households below average income consultation document, income before housing costs is the only measure of low income that the Government will use. It sounds as though the Secretary of State is trying to move the goalposts. We know the Chancellor does that when he has a problem with targets, but we did not know that the Secretary of State was on the Chancellor’s team.

Let me ask the Secretary of State about another aspect of Government policy. In a speech last month, he said that he wanted to

What discussions he has had with the Chancellor about the tax credit system? According to the Joseph Rowntree Trust, a couple with two children must work for 74 hours for the minimum wage—between them—to clear the poverty line, while a single parent with one child will be comfortably above the poverty line after just 16 hours of work. That is forcing many couples to separate, to the extent that Government statisticians have created a new category—

Mr. Speaker: Order. The question is far too long.

Mr. Hutton: The Government are not changing the method by which we collect and publish information on poverty, and on child poverty in particular. My comments on after-housing costs were made specifically in the context of those on below 40 per cent. of national income, which I think right and proper.

As for the hon. Gentleman’s wider questions about the tax credit system, I have had a number of discussions with my right hon. Friend the Chancellor, but I am not prepared to share them with the hon. Gentleman today.

Occupational Pensions

3. Mr. Andrew Robathan (Blaby) (Con): How many occupational pension schemes have closed since 1997; and if he will make a statement. [113149]

The Minister for Pensions Reform (James Purnell): Because of past limitations on pensions registry data, the information requested is not available. As we explained in our November report on speeding up the winding-up of occupational schemes, the pensions regulator has sent new scheme returns to all occupational schemes, which should provide better data in due course.

Mr. Robathan: That was a pretty hopeless reply. Since 1997, tens of thousands of people around the country have lost their occupational pension, including the entire work force of BUSM in Leicester, some of whom are my constituents. Will the Minister now accept, and act on, the findings of the ombudsman’s
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report, which rightly highlighted the responsibilities of the Government, and will he show some real compassion to those who lost all their security in old age through no fault of their own?

James Purnell: Of course, what was pretty hopeless was the way in which the data were collected under the Government of the hon. Gentleman’s party—and, indeed, under this Government. We are now reforming that. I agree that we should have sympathy for people who have lost their pension scheme. That is why we have introduced the financial assistance scheme—for which, I think, the BUSM scheme will qualify, so there will be some help. Most Members will agree that the Government cannot underwrite all private risk; we must not get into a situation where we underwrite in retrospect things that we did not underwrite in advance.

Tom Levitt (High Peak) (Lab): My hon. Friend will be aware that the Turner and Newell pension scheme is undergoing assessment for the Pension Protection Fund. I believe that the PPF will be the best possible outcome for the scheme. However, some of the work force past and present, of whom there are hundreds in my constituency, are concerned that if a better solution comes to light at the eleventh hour they will not be allowed to transfer out of the route to the PPF and to take up the new scheme. Will the Minister give an assurance that if a better solution comes to light members of the Turner and Newell scheme will be allowed to transfer to it at the eleventh hour?

James Purnell: My hon. Friend is right that the scheme administrators will have to do what is in the best interests of all the members of the scheme, and I want to pay tribute to the work that he has done over many years to campaign for the Turner and Newell members. That has, in part, led to the creation of the PPF, which means that people currently saving in occupational pension schemes know that there will be a safety net if such problems arise again. That is a good thing that has come out of what has happened, and which did not exist under the previous Government.

Peter Viggers (Gosport) (Con): We all understand the impact that increased longevity and changes in the stock exchange and bond markets have had on the pensions industry, but what responsibility does the Minister think that the Chancellor should personally accept for destroying the aim of 30 and 40-year-olds to have a comfortable retirement?

James Purnell: Even the Conservative shadow Chancellor accepts that tax changes are not the main cause; as he said, the main causes were increased longevity, the fact that that was not always factored into people’s actuarial estimates and the performance of the stock market in the late 1990s, when it fell by £250 billion, which dwarfs any tax changes. What is important now is that we work for the future and ensure that everyone has access to a good employer contribution. That is exactly what our personal accounts policy will do; it will ensure that everybody, whether or not their company offers a pension scheme, will have access to a contribution from their employer to their pension, and I think that the hon. Gentleman’s party will support that measure when it comes before the House.

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Mr. Stephen Hepburn (Jarrow) (Lab): The ombudsman says that the Government are responsible, the Public Accounts Committee says that the Government are responsible, and even High Court judges are now saying that the Government are responsible, so when will the Government accept that responsibility and pay compensation to those such as my constituent, Bob Duncan, who has lost 30 years of contributions, adding up to tens of thousands of pounds, because of negligent Government advice?

James Purnell: I have great respect for my hon. Friend but I do not agree that the Government were responsible. We did not underwrite the schemes. It is right, however, that we should have sympathy for people in such situations, and I hope that his constituents will benefit from the financial assistance scheme. I would be happy to meet the constituent he mentions, if that would be helpful.

Mr. David Laws (Yeovil) (LD): Will the Minister confirm that taxpayers are now making each year a bigger contribution to public sector final salary schemes than the entire contribution that they are making to all the private sector schemes, both defined benefit and defined contribution? On 23 November last year, his colleague the Secretary of State said that if these trends continue the Government will have to review the deals on public sector pensions. Is that Government policy now?

James Purnell: No, my right hon. Friend did not say that. It is right that we continue to develop the policies on personal accounts that will allow people to make contributions to their pensions, which is exactly the point that I was just making. I think that the hon. Gentleman supports that policy, although to judge from his response to our personal accounts White Paper I am not sure whether he is still part of the consensus. The one thing that we should not do, which I believe is his policy, is to take billions of pounds out of private saving and therefore undermine it. If that is his policy, he will find it pretty unpopular.

Ms Sally Keeble (Northampton, North) (Lab): Quite a few of my constituents lost out pre-1997 when their occupational pension schemes collapsed as a result of the fall-out of the collapse of the boot and shoe industry. Will he ensure that there is no artificial cliff edge in terms of a date, and that people get proper support, whether their occupational pension schemes collapsed pre-1997 or post-1997?

James Purnell: That might be quite difficult. We have set out the dates that people have to meet to qualify for the financial assistance scheme, and I would be very happy to discuss with my hon. Friend the example that she gives. The key point is that there is now a financial assistance scheme that provides help. The PPF, which was not available before, provides security for people saving in an occupational scheme, so they know that there is a safety net if such a thing ever happens again.

Mr. Nigel Waterson (Eastbourne) (Con): Does the Minister agree with his right hon. and learned Friend the Minister of State for Constitutional Affairs, who told victims of the Albert Fisher pension scheme
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collapse that the Government were wrong to reject the ombudsman’s findings, or is this just another example of the Hazel Blears school of collective ministerial responsibility?

James Purnell: Actually, I agree with the hon. Gentleman’s policy, which is not to put any extra taxpayers’ money into the financial assistance scheme. [Interruption.] If he disagrees with that, he is welcome to stand up and clarify Tory policy.

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