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Income Support Fraud

4. Mr. Greg Hands (Hammersmith and Fulham) (Con): What plans his Department has to strengthen its mechanisms for tackling income support fraud. [132665]

The Secretary of State for Work and Pensions (Mr. John Hutton): In October 2005, we published new proposals for reducing benefit fraud. Fraud in income support is now at the lowest level since figures were recorded: down from an estimated £550 million in 1997-98 to around £200 million in 2005-06. That equates to a drop from 6.7 per cent of income support expenditure to 2.1 per cent.


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We are determined to make further reductions in fraud, for example, by trying new data-matching initiatives with credit reference agencies.

Mr. Hands: Everybody living in Hammersmith and Fulham—except, it seems, the Secretary of State—is baffled by the unwillingness of the Department to investigate past and present claims for income support and other benefits by former local resident, Abu Hamza, and his family. Despite owning various properties, receiving rental income and buying a flat in Hammersmith with £75,000 in cash, there has never been a DWP investigation. Will the Secretary of State tell us why?

Mr. Hutton: My understanding is that inquiries have been made into whether fraud or criminal activity has taken place. We have not found any evidence yet.

David T.C. Davies (Monmouth) (Con): Does the Minister agree that if he wants to find examples of fraud or criminal activity, he could try to ensure that the DWP runs proper checks to ensure that those claiming income support are not among the thousands who have disappeared from open prisons over the last few years and are not living out in the wild somewhere like Australian bushmen, but are back at their home addresses, no doubt living off the benefits that they received before they were convicted of breaking laws in the first place?

Mr. Hutton: I do not know whether the hon. Gentleman heard the answer I gave to the hon. Member for Hammersmith and Fulham (Mr. Hands), but fraud in respect of income support is falling sharply and we are determined to make further progress. In that regard, I am happy to say that this Administration has a far better record of dealing with these problems than the Administration to which the hon. Gentleman lent his support.

Financial Assistance Scheme

5. Mr. Philip Dunne (Ludlow) (Con): If he will make a statement on the impact of the 2007 Budget on the financial assistance scheme. [132666]

The Minister for Pensions Reform (James Purnell): As a result of the Budget statement and the amendment tabled to the Pensions Bill, all the estimated 125,000 people with losses will be helped, receiving 80 per cent of the core pension rights accrued in their scheme. In addition, we have started a review of non-public sources of funding to top up the financial assistance scheme. I have today placed a note in the Library with details of the review and an indicative list of 17 schemes where we understand a compromise agreement is in place. We are asking for any similar schemes not on this list to come forward. The review will look at the definition of solvent employers, provide an initial view in the summer and make a final report by the end of 2007.

Mr. Dunne: I thank the Minister for that answer and look forward to reading his statement. Last week, facing a Back-Bench revolt, the Chancellor was forced to expand his Budget measures to cover solvent
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schemes. He seems able to commit funds for pensioners when it suits him, but when a cross-party agreement for a solution is put forward, he rejects it out of hand. Surely what pensioners need now is not just another review, but action and payment in respect of pensions that many people saved a long time for, but may not live to receive.

James Purnell: I have looked at the proposed amendment and have found that it promises to pay 90 per cent., without saying how it can be funded. There is a word in the pensions sphere for guaranteeing pensioners a certain level of income with no guarantee to fund it—and the word is mis-selling. That is exactly what the Opposition are doing.

Andrew Miller (Ellesmere Port and Neston) (Lab): On behalf of the pensioners of HH Robertson’s, may I say how grateful they are for the work done by the Minister and the Secretary of State in developing the financial assistance scheme as they did? However, may I ask the Minister to look carefully into some of the smaller technical issues, such as bridging pensions, that remain as obstacles? Some of the rules of schemes such as HH Robertson’s are still presenting tiny problems for a small number of members, but they are entitled to benefits from the scheme. It is often a case of working out precisely what they are. Will the Minister meet me to discuss those issues?

James Purnell: I would be very happy to meet my hon. Friend to discuss them. He may well have been the first Member to raise this issue in the House, so his constituents and others owe him a real debt of gratitude. He may want to make a submission to the review so that those issues can be looked into by the external panel.

Mike Penning (Hemel Hempstead) (Con): As one trade unionist to another— [Interruption.] For those in doubt, I used to be a member of the Fire Brigades Union. In respect of this cobbled-together agreement that took place on Thursday evening between the trade unions, the Secretary of State and the Chancellor, can I ask whether any people who were not members of trade unions were present? Many of the people who have lost their pensions, including the Dexion workers in my constituency, are not trade union members and were not invited to this little gathering.

James Purnell: To be honest, I am not quite sure what meeting the hon. Gentleman is referring to. The important thing is to provide 80 per cent. to those affected and look further into how to top it up. It would be mistake to go for the sort of dodgy small print that the hon. Gentleman’s scheme has. The shadow Chancellor guaranteed on Wednesday morning that no extra public money was available, but that afternoon he was contradicted by his shadow Secretary of State who said that it was. We are opting not for that sort of dodgy small print, but for a proper review, which will look at the available money and make recommendations in due course.

Derek Wyatt (Sittingbourne and Sheppey) (Lab): May I ask my hon. Friend about the timetable for the unclaimed pension assets—he said that a statement
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was due some time before the recess—and whether the measures will need primary legislation? Are any pension funds, such as Legal and General or Prudential, not co-operating with this process and, if so, how are we going to get them to co-operate?

James Purnell: One of the things that the review needs to look at is whether legislation will be needed, as well as considering any technical, financial and legal issues. That is why we believe that the right way to proceed is to hold the review and to make recommendations in the light of its findings, rather than guaranteeing levels of payments that cannot be guaranteed. It is important that the financial services industry co-operate with the review; we will need its help and support. It is in the interest of everyone involved to come up with as good a settlement as we can, and I would urge my hon. Friend and other hon. Members, as well as those on the Front Bench, to put in a submission to the review.

Mr. Philip Hammond (Runnymede and Weybridge) (Con): The Budget changes to the financial assistance scheme and the additional change that the Minister announced last Wednesday are welcome. They will improve the position of those who are some way away from retirement, and of those on higher incomes. They will do nothing, however, for those at or near retirement who are on low wages, including shop floor workers and trade unionists. Such people are increasingly having to look to the Conservative party to defend their interests and fight their case, because the Labour Members who have taken up their case let them down last week. Will the Minister tell the House why he rejected a perfectly sensible proposal, supported on both sides of the House, that would have delivered an immediate solution at no cost to the public purse, save that of providing a short-term loan?

James Purnell: The hon. Gentleman has just illustrated why the proposal needed to be rejected; he contradicted himself in the space of one sentence. Either there is a taxpayer guarantee, in which case his shadow Chancellor was wrong last week to say that there was no public spending commitment involved, or this is mis-selling the Conservatives’ policy. Which is it?

Mr. Hammond: The Minister might want to be a little bit careful about what he says about the package of policies that we announced last week. On Tuesday, shortly after my hon. Friend the Member for Tatton (Mr. Osborne) announced the package, the Chancellor accused him of having announced a reheat of his own policy. The Minister should therefore be a bit careful before he rubbishes it. This is about people. Let me give him two examples: Peter Humphrey, a former Dexion worker, and John Brooks, a former Early’s of Witney worker, are both now seriously ill. The Minister will know about their cases. They are receiving precisely nothing from the financial assistance scheme, and the announcement that he has made will deliver nothing extra to them. Is he not sending a message to them today that people will have to wait still longer, and that, in their cases, they might never receive the benefits for which they have been saving for many years?


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James Purnell: That is not the message at all. We made it clear that we were increasing the level of initial payments from 60 per cent. to 80 per cent. The problem with the hon. Gentleman’s proposal is that he does not know how to fund it. The House will notice that he absolutely refused to say which of the two options was correct. We still do not know who is right. Is it the shadow Chancellor, who said that no public spending commitment was involved, or is it the hon. Gentleman? There is a contradiction at the heart of their policy. What I was saying was exactly what the Chancellor said, namely that we should have a review and make decisions in the light of its findings and of proper technical advice, rather than adopting cooked-up amendments from the Conservative Front Bench.

State Second Pension

6. John Robertson (Glasgow, North-West) (Lab): How many more women will receive entitlements to the state second pension as a result of Government pension proposals. [132667]

The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): As a result of reform, around 1 million more people will build up entitlement to the state second pension from 2010, 90 per cent. of whom will be women.

John Robertson: I thank my hon. Friend for her answer. As a Member of Parliament whose constituency has one of the highest percentages of women, I am naturally concerned about the treatment of women. Does my hon. Friend agree that the low take-up of the state second pension among women might be due to the fact that they are still being paid less than men? Of course, it could be that they are going for other pensions that are more favourable, but what are the Government doing to investigate why there is such a low take-up of the state second pension?

Mrs. McGuire: My hon. Friend is correct that for many years the number of women who build up a full state pension has been significantly lower than the number of their male counterparts who do so, which is why in our reforms, including the reform of the second state pension, we seek to equalise the take-up of the basic state pension and the building-up of that entitlement. He is correct, too, that there are other issues to do with the advice given to women workers and whether or not they think it worth their while to join in a private pension scheme. That is something that the Department for Work and Pensions must look at, along with employers and with the sponsorship of other Government Departments, to make sure that the right information is given to women. For too long, women have been second-class citizens with regard to pensions, whether it is the payment of the small stamp or the fact that they have never been given the opportunity to build up an entitlement, and we seek to rectify that.

Dr. Brian Iddon (Bolton, South-East) (Lab): I wonder whether my hon. Friend will join me in congratulating the Association of Greater Manchester Authorities which, last Thursday, with the help of Age Concern and Bolton council launched a new mobile
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advice centre that has three interview rooms and a large satellite dish on the roof, and allows professional staff from the Department for Work and Pensions and the Pension Service to give all the citizens of Greater Manchester who receive pensions or are about to receive them proper advice?

Mrs. McGuire: I am delighted to join my hon. Friend in offering my congratulations. He has illustrated the way in which the Department for Work and Pensions, through the Pension Service, goes out to people and ensures that information is taken to the community. It works closely with voluntary organisations and local authorities to ensure that there are no barriers to information among the local population, and I should be interested to learn from the Pension Service the improved take-up in the Greater Manchester area.

Inactive Benefits

7. Ms Diana R. Johnson (Kingston upon Hull, North) (Lab): If he will make a statement on progress in reducing the number of people on inactive benefits. [132668]

The Minister for Employment and Welfare Reform (Mr. Jim Murphy): There are more people in work than ever before in the UK. There are also 900,000 fewer people on out-of-work benefits compared with a decade ago. There is a real contrast with the decade before that, in which the number of people on incapacity benefit trebled.

Ms Johnson: May I ask my hon. Friend to look at the position of people with mental health problems, particularly given the scheme that operates in Hull through the local branch of Mind? It is called Mindful Employer, and it offers support and encouragement to local employers to employ people with mental health problems, so will he look at whether it can be rolled out across the country to support employers?

Mr. Murphy: I know how carefully my hon. Friend looks at all those issues, and she has spoken to me before about the Mindful Employer experience in her constituency. She is absolutely right, and there are some extremely enlightened attitudes among employers small and large across the United Kingdom who are doing an awful lot to support people with a mental illness as well as people with a learning disability, who have traditionally been excluded from the labour market. I am happy to listen further to my hon. Friend’s experiences to see what more we can do to embed those reforms so that they genuinely support those with a fluctuating mental health condition.

Miss Anne McIntosh (Vale of York) (Con): The Minister will be aware that there is a record number of 16 to 18-year-olds among the number of people not in education, employment or training. Does he accept that the path through university to work is very much embedded in young people’s minds but that the Government need to do more to encourage them to go on and secure vocational training, which does not necessarily involve university but will give them a job for life?


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Mr. Murphy: I am not sure that there is a job for life for many people in today’s labour market in a world of globalisation. Nevertheless, there is a significant task ahead concerning the skills and aspirations of many young people. Of course there has been progress in recent years on the number of young people not in employment, education or training, but we have to go further. One way of doing so is perhaps raising the school leaving age; another is continuing to make a success of the new deal, which has transformed the lives of hundreds of thousands of young people and is a policy that was, and still is, opposed by the Opposition.

Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): Does my hon. Friend agree that getting people who have been on an inactive benefit for many years into work is one of the most challenging jobs for us? Will he give me an assurance that Jobcentre Plus has sufficient resources to meet that challenge?

Mr. Murphy: My hon. Friend is right, and that is why 250 people have come off an inactive benefit, with the chance to go into work in many cases, every day over the past 10 years. My hon. Friend is right to allude to the remarkable work done by Jobcentre Plus in supporting people to get into work in many communities and towns across the country. But clearly, Jobcentre Plus cannot, and should not, be asked to do that job on its own. Increased involvement by the private and voluntary sector, community organisations, and—as I have alluded to—faith groups and trade unions in communities is also important in supporting more people into sustained employment.

Mr. Owen Paterson (North Shropshire) (Con): The latest edition of “Labour Market Statistics”, published on 18 April, showed that the number of economically inactive people of working age rose by 76,000 in the past quarter to 7.93 million. Is the Chancellor to blame?

Mr. Murphy: The figures released will also show, of course, that the number of people on jobseeker’s allowance fell last month—the seventh fall over the past eight months—that the number of people on incapacity benefit is the lowest that it has been for six years, and that the number of lone parents on income support has decreased. Alongside the fall in the number of people claiming each and every one of those benefits, a record number of people are in work—a record of which the Government are rightly proud.

Pension Contributions

8. Justine Greening (Putney) (Con): What estimate his Department has made of the number of people aged 40 years or under who do not make any contributions to either occupational or private pensions; and if he will make a statement. [132669]

The Minister for Pensions Reform (James Purnell): In 2005-06, 6.2 million employees, 0.9 million self-employed people and 3.6 million economically inactive people aged 20 to 40 in the UK were not contributing to a non-state pension.


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