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Mrs. McGuire:
The hon. Gentleman highlights something that—as I think that in another forum he would accept—I have often highlighted, which is that the public sector has to take its responsibility for employing more disabled people. Yes, that includes my
Department. It also includes the 44,000 or thereabouts public authorities across the country. I would not have thought that this was a party political point, as he seeks to portray it. It is to do with opening up employment opportunities for disabled people. The DWP is taking that responsibility very seriously.
Mr. Brian Jenkins (Tamworth) (Lab): As my hon. Friend will recall, local authorities used to employ people with disadvantages, and the jobs were almost ring-fenced—but compulsory competitive tendering forced them out of the system. What will she do to remind local authorities of the vital role that they can play in putting such people on the ladder to employment?
Mrs. McGuire: It is true that we used to have a quota system for the employment of disabled people, but I hope my hon. Friend agrees that that system became a ceiling for what they could achieve rather than a floor allowing them to move into other jobs. The new civil rights legislation removed the quota system, but as my hon. Friend says, we must think about how to encourage local authorities, and public authorities generally, to expand the opportunities that they offer disabled people in employment. The disability equality duty, which came into force only a few weeks ago, will start to offer some of those opportunities, and I expect significant improvement in the months and years to come.
Pensions
8. Mr. David Jones (Clwyd, West) (Con): What recent representations he has received on the level of the Pension Protection Fund levy; and if he will make a statement. [118080]
The Minister for Pensions Reform (James Purnell): My Department is in regular discussion with employers and the pensions industry, including scheme managers and members. We have received a handful of representations on the Pension Protection Fund levy, but its level is a matter for the board of the Pension Protection Fund. The board announced its proposals on 21 December, and consultation closed on Friday 2 February.
Mr. Jones: The Minister will be aware that while the overall PPF levy for 2007-08 is more than doubling to £675 million, the risk-based element is increasing fourfold. Does he share the concern expressed by commentators that overall the increase is greatest for the weaker schemes, which are least able to afford it? Does he recognise that the burden of paying the increased levy may, paradoxically, force some of those schemes into insolvency?
James Purnell:
As the hon. Gentleman knows, there is a cap enabling the 5 per cent. of weaker schemes to be cross-subsidised by the rest of the system—but his question illustrates the difficulty of striking the right balance. On the one hand his party’s Front Benchers are saying that there should be more protection for people who have suffered as a result of failed company pension schemes; on the other hand, he is saying that the levy should be lower. The levy is only 2 per cent. of the amount that companies are investing in their
pension schemes, and we therefore think it a reasonable burden to impose in order to give people the security that they need.
Mr. David Winnick (Walsall, North) (Lab): A constituent who came to my surgery on Saturday is due to retire in March this year. He said that he had been told five years ago by Caparo and a pension scheme that he was to receive a pension of £5,500 annually. He has now been told that the amount will be less than half that. Can my hon. Friend understand the depression that that man is experiencing now that all his plans for retirement have been undermined? What assistance can be provided for him, when the pledge that was made to him, which I have now seen, is to be so completely withdrawn?
James Purnell: I am surprised at those facts if the scheme qualified for the Pension Protection Fund, which generally gives people 90 per cent. of the pension that they expected to receive. I shall be happy to meet my hon. Friend’s constituent to discuss the matter, but I should point out that there is now a Pension Protection Fund for people who are saving in company pensions. That deals with what my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) said earlier about the need to restore trust in the system and reassure people that there is a safety net on which they can rely.
Tony Baldry (Banbury) (Con): This is all about pension protection. What action are the Government taking to ensure that private pension schemes do not fail and collapse in the future?
James Purnell: That is a good point. At the same time as introducing the PPF, we have tightened the regulation by bringing in the Pensions Regulator, which has much tougher powers to ensure that schemes are properly funded. The hon. Gentleman will be glad to know that Watson Wyatt found recently that pension schemes are at their healthiest level since 1999, so it is working in practice: the Pensions Regulator does mean that pension funds are much better funded.
Dundee City Strategy
9. Mr. Jim McGovern (Dundee, West) (Lab): If he will make a statement on the Department's Dundee city strategy. [118082]
The Minister for Employment and Welfare Reform (Mr. Jim Murphy): Dundee has now submitted its ambitious business plans. My hon. Friend will be aware that the Dundee Partnership wants to develop a more co-ordinated approach to support more Dundonians into work.
Mr. McGovern: I thank the Minister for that response, and for his visit to Dundee 10 days ago to see the progress being made by the Dundee city strategy. Since 2001, Dundee has achieved employment growth of between 2 and 4.5 per cent. Credit for that must be given to Dundee city council, the Scottish Executive and the Government in Westminster, all of which are, of course, Labour led. Will he confirm his Department's continued support for the Dundee city strategy in providing new skills, new training and new jobs to maintain Dundee’s prosperity and growth?
Mr. Murphy: We are determined to do that, and I thank my hon. Friend for his work in supporting the consortiums in Dundee in developing their plans. He will be aware that today the rapid reaction force that is looking into the proposed redundancies at NCR is meeting again. Obviously, we are determined to work with the city council, under the leadership of Jill Shimi, and others, to support more people to get a chance to work. Dundee has set itself the ambition of reducing the proportion of worklessness by 30 per cent. over three years. That requires a co-ordinated approach by all the agencies that my hon. Friend mentioned.
Stewart Hosie (Dundee, East) (SNP): As part of that co-ordinated approach, and as part of achieving growth in an ever more globalised economy, the Minister will understand the need for lots of skills, not least in foreign languages. Although it is a devolved matter, can he assure the House that next time he meets his colleagues in the Scottish Executive he will put some pressure on them, if he can, to provide some additional resources to Dundee university to avoid cuts, not least in the modern languages department?
Mr. Murphy: In anticipation of the hon. Gentleman's question, I had intended to say that because of the reasonable way in which he put it, I would spare him the lecture on why breaking up Britain would be bad for Scottish jobs—so I am left with a choice. However, I take on board the points that he made. That matter is not, of course, the responsibility of the Department for Work and Pensions, but we are determined to do all we can to support the Dundee labour market within the wider Scottish labour market, in a stable United Kingdom economy and UK labour market.
Benefits System
10. Daniel Kawczynski (Shrewsbury and Atcham) (Con): If he will make a statement on his Department's report “Getting Welfare Right: Tackling Error in the Benefits System”. [118083]
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): The Government published their error reduction strategy on 24 January. Building on our success in reducing fraud losses to their lowest ever recorded level, that strategy sets out a comprehensive and ambitious plan for reducing error in the benefits system by £1 billion over the next five years.
Daniel Kawczynski: I thank the Minister for that reply. The report calls for ensuring that less money is paid out incorrectly, but says that that will rely on customer compliance. Does the Minister really believe that people who rely on that money will own up when they have been paid too much, especially if returning it brings them under further scrutiny?
Mr. Plaskitt:
As the hon. Gentleman will see if he studies the strategy carefully, there are three dimensions to it: prevention, or trying to stop error getting into the system in the first place; correction, or putting right error already in the stock of benefits; and compliance, whereby customers let us know about changes in circumstances that they are obliged to report to us
because they have an effect on their benefit entitlement. A new compliance pilot is under way in Cambridgeshire. We will study carefully how that goes, but the early findings are very encouraging. Compliance will help us to achieve the £1 billion reduction in error across the system.
Mr. Eric Illsley (Barnsley, Central) (Lab): Can my hon. Friend tell me whether that initiative will extend to local authorities, where calculations are made in respect of housing benefit and council tax benefit? Their success rate is 80 per cent., so 20 per cent. of decisions made on those benefits are wrong. On Friday, the disability information advice line in my constituency raised with me the case of a housing benefit calculation whereby for the past six years a constituent of mine was paid £30 a week when she should have been paid £46 a week. That error was twice compounded by supervisory decisions. Will there be an initiative to deal with local authority calculations as well?
Mr. Plaskitt: My hon. Friend makes an excellent point. I want to reassure him that in devising the strategy published last week, staff in the Department worked closely with staff in local authorities. He is quite right that there are many linked decisions by the Department and local authorities, and the key to reducing error is to have more data sharing in the system. That is a crucial part of the strategy, and we are already putting in place an IT platform that allows DWP data to be transferred directly to local authority offices on a weekly basis.
Mr. David Ruffley (Bury St. Edmunds) (Con): Overpayments due to fraud and error in the four major benefits total a staggering £6 billion in the past four years. Overpayments due to customer confusion are up 50 per cent. in the past nine years, and last year alone, underpayments totalled nearly £1 billion, with £0.25 billion underpaid to disabled families. We all agree that we need a simpler, fairer system, so will Ministers recommit today to cutting complexity, and will they explain to the House why they allocated only five full-time staff to the benefit simplification unit and only two full-time staff to the error taskforce?
Mr. Plaskitt: I am interested that the hon. Gentleman should choose to decry the work of those departments, because the benefit simplification unit has been in place since January 2006 and promotes best practice across the system. It has already achieved simplifications to the social fund, and it has aligned capital limits across all working-age benefits. The small team to which he referred is responsible for revoking 200 statutory instruments, thereby simplifying the benefits system. May I remind him of the record? Fraud is at its lowest ever recorded level, and it is half the 1997 level. It was cut by a further £100 million just last year, and error was reduced last year by £100 million. Sanctions and prosecutions have increased fivefold since 1997, and our strategy is broadly endorsed by the National Audit Office, so I can tell the hon. Gentleman: better my grip than his lip.
Child Support
11. Mr. Andrew Mackay (Bracknell) (Con): What the expected level of outstanding Child Support Agency debt is that he proposes to write off in establishing the new Child Maintenance and Enforcement Commission. [118084]
The Secretary of State for Work and Pensions (Mr. John Hutton): We have decided against seeking a general power to write off debt owed to the Child Support Agency. Where the parent with care or the non-resident parent is dead, or where the parent with care has asked for cessation of debt recovery, for example following mutual reconciliation, we have decided that it would not be sensible to pursue such debt. I do not expect those debts to exceed £50 million.
Mr. Mackay: But should the Secretary of State not come clean with hard-pressed families? The CSA has admitted that £1.3 billion-worth of child maintenance owed by absent parents has not been paid, yet the Department has said that it is actively pursuing only some £500 million, which means that £800 million is likely to be written off. Can that possibly be right?
Mr. Hutton: I think that the right hon. Gentleman is referring to the interim maintenance assessment liabilities that accrued between 1993 and the end of 2000, when we stopped making interim maintenance assessments. They were originally designed in the child support legislation to encourage non-resident parents to pay child maintenance, but they singularly failed to do so. We are not going to write off that debt, but it will be revalued, which is the sensible thing to do. I hope that we can recover about £500 million, and we will actively pursue that. I agree with the right hon. Gentleman that we should always be honest with voters and our constituents, and to some extent that money will be extremely difficult to recover, given the very nature of those cases. We have a stark and simple choice: we can either pursue what we think is recoverable and go at it hammer and tongs, or we can spend a lot of time and, I am afraid, a lot of public money, pursuing debt that we know is never going to be recoverable. That is the choice that confronts us. We have decided not to take the general power to write off debt, which is what Sir David Henshaw recommended, and we are going to give the CSA and its successor a range of tough, new enforcement powers that are unprecedented in civil debt recovery to break the culture of non-payment of maintenance which, I am afraid, has become widespread in our society.
Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): The Secretary of State will know that it is encouraging to hear of the limitations that he has put on that particular process, but I hope that he also realises that many people—mothers, in particular—have spent many years going through the whole galling procedure of trying to recover money and are still being told to continue to fill in forms and have little hope of getting any kind of settlement at all. I hope that the Secretary of State accepts that that is an unacceptable diminution of their status—and that it beggars belief.
Mr. Hutton: I agree that the record in respect of recovering debt that is owed to parents who are carers has not been good enough. That is why we have decided to replace the Child Support Agency with a completely different organisation that will have a different range of powers to break the culture of non-payment. As a result, there will be an important opportunity for Members to send out a signal of the kind that I am sure that my hon. Friend believes in—that although it is obviously the case that relationships end, the financial responsibilities of parents to their children never do. Unfortunately, under current legislation it has proved far too easy for people to escape their liabilities, and we are determined to clamp down on that.
Jo Swinson (East Dunbartonshire) (LD): Does the Secretary of State agree that one of the reasons for the high levels of outstanding CSA debt is the ridiculously long repayment terms that are given? A constituent of mine is owed £9,000 and she has been told that her ex-husband can repay it over 39 years. Will the CSA replacement body get tough on the maintenance cheats and enforce repayments over much shorter time scales, to make sure that the money gets to the children while they are still children?
Mr. Hutton: Yes, and we have said that in the White Paper.
Annette Brooke (Mid-Dorset and North Poole) (LD): Does the Secretary of State understand the anger of those parents who are owed thousands of pounds by a former partner and who subsequently find, when a child changes residence to that of that partner, that they have deductions from their own salary and hence lose twice? Does he agree that such cases should be a priority in respect of pursuing arrears?
Mrs. Maria Miller (Basingstoke) (Con): Tomorrow, Conservatives will hold a specialist seminar on the future of child support and will look at debt write-off. Will the Secretary of State update the House on the growth in CSA debt? Figures show that outstanding debt is being reduced by £7 million a month but that new debt is growing by £20 million a month. Is that trend set to continue?
Mr. Hutton: Yes it will, and I think that we have to be clear, honest and straight with people about that. It is accumulating at that amount a month because of the accumulated legacy of debt over the past 15 years, which, with the best will in the world, neither the hon. Lady nor anyone else in this place or outside has a magic wand to deal with. We are strengthening the powers of recovery. We have taken legislation through the House to remove the six-year limit that restricts our ability to pursue debt. We are taking a number of steps to enforce debt recovery more successfully and intelligently. My understanding is that the hon. Lady and her party support our reforms of the CSA to make sure that we make further progress, and I am grateful to her and her hon. Friends for that support.
Miss Julie Kirkbride (Bromsgrove) (Con):
In answer to the question, the Secretary of State said that he would allow parents with care to ask for the write-off of debt for parents without care under the new rules
that he intends to bring in. Will that only be in cases where the couple have come back together, or will that be possible in all cases? Also, has he considered the impact on some parents with care who might be threatened or bullied by their ex-partner into taking up that measure?
Mr. Hutton: I was referring to the new power to offset liabilities that have accrued while one parent was the non-resident parent and the other parent was the parent with care when those roles are reversed. That is a perfectly sensible way of dealing with such problems. That is how we intend that new power to be exercised, and I hope that the hon. Lady will support it.
Child Poverty
14. Mr. Stewart Jackson (Peterborough) (Con): If he will make a statement on his Department’s progress towards achieving its 2010 child poverty target. [118087]
The Minister for Employment and Welfare Reform (Mr. Jim Murphy): We have succeeded in reversing the long-term trend of rising child poverty and have made the biggest improvement of any EU country over the past decade. But there is more that we can do, which is why we are currently refreshing our child poverty strategy.
Mr. Jackson: I thank the Minister for that answer. The outgoing Prime Minister is searching for a legacy. That legacy is that the UK has the highest proportion in Europe of children living in workless households, and that 3.4 million children live in poverty. The Government’s target to reduce by a quarter the level of child poverty recorded in 1999 was recently missed, so what confidence can we have that they can meet their target to halve child poverty before 2011?
Mr. Murphy: The hon. Gentleman’s observations would have greater credibility had he acknowledged the progress that has been made. Under the previous Government, 210 children fell into poverty each and every day. Under this Government, 240 children are lifted out of poverty every single day. So while it is often lazily commented that there is no difference between the two major parties in this country, there is one difference that my party is rightly proud of.
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