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House of Commons

Monday 19 November 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—

Credit Unions

1. Ms Katy Clark (North Ayrshire and Arran) (Lab): What steps his Department is taking to support the work of credit unions. [164991]

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): Via the growth fund, we are investing £42 million over three years in more than 120 credit unions and community development finance institutions. To date, more than 40,000 affordable loans worth a total of £20 million have been made, and as a result thousands of people have been prevented from falling into the clutches of high-cost lenders or loan sharks.

Ms Clark: I am grateful to the Minister for his reply. He will be aware of the socially responsible work that credit unions carry out, but he will also be aware that the credit union movement feels that the current legislative framework is stunting its growth, and he will be aware that there are far higher levels of credit union membership in other countries, such as Ireland. What steps is he considering taking to update the law governing credit unions?

Mr. Plaskitt: First, I should point out that the growth fund investment that my Department is making is the first ever substantial investment by Government in the credit union movement, and my hon. Friend will know of the First Alliance credit union in Ayrshire which is benefiting from growth fund money. My Department is looking in conjunction with the Treasury at the legislative and regulatory rules that affect credit unions, and I am sure that colleagues in that Department will have more to say about that in future.

Mr. John Grogan (Selby) (Lab): Does my hon. Friend agree that it is important that credit unions are not just an urban phenomenon, but that they also offer savings and loan opportunities in rural areas? Will he commend the work of North Yorkshire county council, which on 4 December will consider a business plan
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drawn up in association with local housing associations to expand the common bond of the York credit union to the whole of North Yorkshire so that credit union facilities will be available in the whole of the county of Yorkshire?

Mr. Plaskitt: I agree with my hon. Friend, and I can tell him that no fewer than 11 credit unions in Yorkshire are benefiting from the investment that the Government are putting in through the growth fund. We have found that in many areas a number of small credit unions have come together to collaborate and pursue a bid for growth fund money. That has been especially effective for credit unions that cover rural areas. My hon. Friend is right that such amalgamations must take place if we are to get wider coverage on behalf of credit unions, and that is precisely the sort of thing that growth fund investment has encouraged.

Tom Levitt (High Peak) (Lab): I am grateful to my hon. Friend the Minister for his answers. Obviously, the people who benefit most from credit unions are those at most risk from loan sharks and least able to look after themselves in this respect. Will my hon. Friend clarify the situation with regard to the funding he mentioned in his first answer? Is that just for expanding existing credit unions, or are there facilities for creating new credit unions from scratch, and where should people go if they want assistance in, or advice on, starting a credit union?

Mr. Plaskitt: The growth fund money is being used in a number of ways. Some of it is expanding the capitalisation of credit unions—it is having a substantial impact in that respect. As I said, a number of credit unions have amalgamated or brought collaborative deals to us in order to bid for the growth fund. Some of the money is also available to assist in training and development for those who work in credit unions—both full-time staff and volunteers, who play an important role.

Speech Impediments (Young People)

2. Helen Jones (Warrington, North) (Lab): What assistance is available to help young people with speech impediments to gain employment. [164992]

The Parliamentary Under-Secretary of State for Work and Pensions (Mrs. Anne McGuire): Most people are able to make use of the mainstream employment placing services provided by Jobcentre Plus to find a job. However, for those who need more specialist help, such as someone with a speech impediment, Jobcentre Plus provides a range of tailored disability measures via our highly trained disability employment advisers.

Helen Jones: I am grateful to my hon. Friend for that answer, but what would she say to a 17-year-old constituent of mine with a severe stammer who could be helped by a SpeechEasy device to get into employment—it would help him make telephone calls, attend interviews and so on—and yet has received just one piece of advice: that he should go on jobseeker’s allowance and then people will look at helping him? He is a bright young man who is eager to work, and a small investment now would repay the taxpayer many times
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over in the future. Can we not look at providing more help for people such as him who want to contribute to society?

Mrs. McGuire: I recognise the picture that my hon. Friend has painted. Through Jobcentre Plus and our disability employment advisers, there are ways in which a young man in such a position can be assisted through the training and interview processes. If they are successful in getting a job there is also, of course, our successful “access to work” programme to address ways of supporting them in employment. I know that my hon. Friend has written to me on the specifics of her constituency case and I will respond on that as soon as possible.

Angela Watkinson (Upminster) (Con): Anyone who has a speech impediment or communication difficulty, whether it results from a physical disability or a psychological problem, should ideally be able to access speech therapy long before they reach the stage when they want to attend a job interview. I would include in that many young people who do not have a speech impediment but who have barely intelligible speech. They need to have that made known to them, so that they present themselves well and to best advantage when they go for a job.

Mrs. McGuire: I understood the comments of my hon. Friend the Member for Warrington, North (Helen Jones), and likewise I understand exactly what the hon. Lady is saying. I hope that she welcomed the recent statement in the pre-Budget report supporting enhanced facilities for speech therapy. We recognise that communication is important in getting through the interview process and getting a job. That is why Jobcentre Plus works with the individual, particularly if they have a speech impediment, to see what is most appropriate to take them through that quite difficult process,

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): Does the Minister think that a young person who has a severe speech impediment would qualify for incapacity benefit under the new assessment announced today, or would she include such a person in being part of the sick-note culture? Would it not be better for all concerned if the Government concentrated on putting their efforts into providing tailored support for such people to get back into work, as proposed in the Freud review, which Ministers have now ditched, rather than on demonising disabled people by using negative stereotypes of the type that we have read about again in the papers today?

Mrs. McGuire: I regret the sort of angle from which the hon. Gentleman has come at this issue, because when we debated the Welfare Reform Bill in Committee, we were clear that the way in which we would work in future would be to consider and support the individual, and to identify their needs to ensure that they moved into work with the proper support when that was appropriate. Of course, it would be ludicrous for me to say that one person would be able to qualify for the new employment and support allowance whereas someone else would not, because it is very much tailored to individual needs, including training needs, individual
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aspirations and how those people move into work. For the hon. Gentleman’s information, we are implementing the recommendations of the Freud report.

Mr. Mark Harper (Forest of Dean) (Con): My question follows the point ably made by the hon. Member for Warrington, North, and is similar. The Minister will know that last week Scope launched its “no voice, no choice” campaign, which specifically examines the need of many disabled people for communication devices, both to have much more fulfilled lives and to get into employment. Is she able to update the House on the steps that she and her colleagues are taking to improve that situation to deal with both the constituency case that has been mentioned and people more widely?

Mrs. McGuire: Obviously, I have read Scope’s report. We have clearly identified communication as an issue for many people, which is why we have support workers for many people who have a visual impairment and why Braille is part of the working environment—that is supported through our access to work programme. For those who have a hearing impairment, we provide British Sign Language signers and we examine different ways in which we can support technology to maintain people in their employment. Of course, I would be delighted to update the hon. Gentleman, in his new capacity as shadow spokesperson on disability, at an appropriate future time.

Child Maintenance and Enforcement Commission

3. Keith Vaz (Leicester, East) (Lab): When the Child Maintenance and Enforcement Commission will commence its work; and if he will make a statement. [164993]

The Secretary of State for Work and Pensions (Mr. Peter Hain): Subject to parliamentary approval, the Child Maintenance and Enforcement Commission will become operational in 2008. I have appointed Janet Paraskeva as its chair designate. She brings considerable skills and experience to the role and she will provide outstanding leadership.

Keith Vaz: I thank the Secretary of State for that answer. What would he say to my constituent, Martin Smith, who has been in correspondence with the Child Support Agency for the past four years? He has stated that he was the father of a child, and he then submitted his DNA report, which the CSA has lost. The CSA has been taking money out of his account every week, and he now risks losing his job. Will the Secretary of State assure the House that the transitional arrangements that he brings into force will ensure that such cases will be dealt with swiftly before the new organisation takes over?

Mr. Hain: I would certainly like to examine the case of the constituent mentioned by my right hon. Friend, because his account makes it sound disturbing. There is no doubt that from its original inception in the early 1990s, the CSA has been a real problem in dealing with the problems that it was set up to resolve. It has improved its performance recently, but we are replacing it with the new commission precisely to start on an
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entirely new footing and to ensure that we provide child support in the way that it ought to have been provided all along.

Miss Julie Kirkbride (Bromsgrove) (Con): The Secretary of State has just rightly said that since its inception the Child Support Agency has encountered many difficulties. I am sure that he will be aware, as are many hon. Members, that one of the principal difficulties has occurred when the absent parent—the parent without care—has been self-employed, and it has therefore been impossible to reach or place enforcement orders on their earnings. Can he tell the House whether the new agency will have any other, better methods of dealing with that intractable problem than has been the case in the past?

Mr. Hain: We will provide powers for direct collection from bank accounts, because the hon. Lady is right that there is a problem with self-employed people. We will also encourage mediation, especially for those on benefit. At present, they have to enter into a statutory relationship, via the CSA. If the issue could be voluntarily agreed, it could remove that obstacle to a proper relationship between the parents and support for the resident parent. The self-employed issue remains one that we need to resolve.

Miss Anne Begg (Aberdeen, South) (Lab): Will the new CMEC take a different approach to shared care, in which children spend 50 per cent. of their time with each parent, especially when both parents are working and have an income? Under the CSA, one parent always has to be identified as the parent with care.

Mr. Hain: Yes, I do think that CMEC will provide a more satisfactory outcome in such instances, to which my hon. Friend is right to draw attention. For a start, it will provide scope for greater voluntary arrangements and mediation, as well as an ability to offset in cases like the ones that she mentioned.

Sir Patrick Cormack (South Staffordshire) (Con): I am sure that we all have numerous cases of the insensitivity and inefficiency of the CSA that we could lay before the Secretary of State. What procedure will the Secretary of State adopt to monitor the work of the new body, so that we do not have a disaster followed by a fiasco?

Mr. Hain: I am confident that we will not have that— [ Interruption. ] Well, I remember the early days of the CSA, as a Back-Bench Labour Member, after it was set up by the previous Government, and it was an absolute disaster. Performance has improved, but the hon. Gentleman is right to demand of me that it improves further. It will be monitored, and I hope that the Work and Pensions Committee will also keep a beady eye focused on it. We want the new arrangement to ensure that the support gets to the child, so that the non-resident parent—usually the father—fulfils his responsibility, but it should be done in a fair way, which is often perceived not to be the case.

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Child Support

4. Mr. David Kidney (Stafford) (Lab): What preparations he has made for the proposed changes to the system of child support. [164994]

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): The first concrete steps in implementing the reforms have already been taken. For example, in the pre-Budget report, we announced the increases to the child maintenance disregard to £20 a week by the end of next year, and to £40 a week from April 2010. That change alone will lift 50,000 children out of poverty.

Mr. Kidney: I am grateful to my hon. Friend for that answer. When we move to the new system, there will undoubtedly be a mass of cases under the first two systems in which there are still unpaid arrears. Will he consider whether mediation might have a part to play in resolving long-standing disputes about how much should be paid each week or month, and if alternative dispute resolution proves successful in that regard, will he consider a role for it in the new system?

Mr. Plaskitt: We are taking an important step in the direction that my hon. Friend seeks, in that CMEC will come with an information and support service which will, for the first time, give advice and support to separating couples about how they should proceed and what arrangements they might make on a voluntary basis for securing the future flow of maintenance. He will also know that since January 2006 the family mediation helpline has been in existence, and I expect that the new advice and support service will be able to signpost the mediation service and refer people to it.

Miss Anne McIntosh (Vale of York) (Con): Although I realise that the CSA has a difficult task, what does the Minister propose to do about calculations of the income of absent fathers that take so long that by the time the arrears are due the father gets a shock and is unable to pay them all in one go? That is a real problem, as I am sure other hon. Members have heard; those people are faced by payments that they cannot meet.

Mr. Plaskitt: Of course, improving performance as the hon. Lady describes is not just a case of waiting for the new commission to come into existence; it is important to improve performance now, for exactly the reasons she indicates. That is why we are making additional investment through the operational improvement plan, and the secret of that is to speed up the processing of cases, so that whereas back in March 2005, before the plan was under way, only 30 per cent. of cases were processed within 12 weeks, the number is now 74 per cent. The significant investment we are already making in the existing agency is already improving performance and that will carry forward under the new arrangements.

Pensioner Poverty

5. Mr. Shailesh Vara (North-West Cambridgeshire) (Con): What his most recent estimate is of the proportion of pensioners living in poverty. [164995]

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The Minister for Pensions Reform (Mr. Mike O'Brien): Since 1997 pensioner poverty has been reduced by a third to 17 per cent. Through targeted support, such as pension credit and £11 billion of extra funding, we have lifted more than 1 million pensioners out of relative poverty.

Mr. Vara: I am grateful to the Minister for those comments.

According to the Prudential, rising food prices affect pensioners more than any other age group. Does the Minister share my concern that as food prices are increasing at their fastest rate in 14 years, that is having a negative impact on pensioner poverty?

Mr. O'Brien: What we have ensured is that we continue to deal with the issues surrounding pensioner poverty, which is why we introduced pension credit. We have sought to lift the poorest pensioners out of poverty, and they are the people who would be most affected by increases, say, in food prices. At the same time, we have sought to provide a solid foundation of support for pensioners who are beyond pension credit levels. Those are issues, which is why the Government continue to upgrade the level of pension credit.

Mr. Terry Rooney (Bradford, North) (Lab): My hon. and learned Friend will be aware that fuel prices are an issue for many pensioners, but is he aware of the British Gas scheme for a social tariff for those on lower incomes? One of the problems of expanding the scheme is access to data, so will he undertake to have conversations with British Gas about data sharing and how it might be taken forward?

Mr. O'Brien: I think the straight answer to my hon. Friend is yes.

Mr. Nigel Waterson (Eastbourne) (Con): But can the Minister confirm that 2 million pensioners are living in poverty and that the very poorest pensioners are seeing their real incomes fall by 4 per cent. a year—costing on average more than £250? Will he join me and my hon. Friend the Member for Epsom and Ewell (Chris Grayling) tomorrow night at the vigil outside Downing street to be held by some of the 125,000 pension victims? If he comes to talk to them, will he explain why he is still refusing them the help that they need?

Mr. O'Brien: First of all, in terms of numbers we estimate that 1.1 million to 1.7 million pensioners do not take up pension credit. I think before the hon. Gentleman makes comments such as those he has just made, he should recall that when the Conservatives were in office they left 2.7 million pensioners living in poverty, many living on as little as £69 a week; many women were restricted from building up state pension entitlement in their own right and carers were similarly mistreated. In talking about the financial assistance scheme—the help for the 125,000 pensioners concerned because of the breakdown of their pension scheme—the Tories should be a little careful; they cannot afford to claim that they looked after pensions during their term. They created the circumstances in which many of those schemes got into trouble. In 1986, pension fund surpluses were capped by the then Chancellor. They allowed pension holidays—

Mr. Speaker: Order. David Winnick.

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