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National Identity Scheme

The Secretary of State for the Home Department (Jacqui Smith): The House will wish to know that the Government is publishing today an updated “National Identity Scheme Delivery Plan 2008” and a document setting out our plans for introducing compulsory identity cards for foreign nationals. Copies of both documents have been placed in the Vote Office and the Libraries of both Houses.


Cohabitation (Government Response to Law Commission Paper)

The Parliamentary Under-Secretary of State for Justice (Bridget Prentice): Today we are announcing the Government’s response to the Law Commission’s paper on Cohabitation: The Financial Consequences of Relationship Breakdown.

The Law Commission published their very thorough and high quality report on 31 July 2007. It makes recommendations to Government on certain aspects of the law relating to cohabitants. It considers the financial consequences of cohabiting relationships ending either by separation or death. It follows two years of work by the Law Commission.

The report has been carefully considered and the Government have decided it wishes to seek research findings on the Family Law (Scotland) Act 2006, which came into effect last year. This Act has provisions which are similar in many respects to those which the Commission recommends.

The Scottish Executive intend to undertake research to discover the cost of such a scheme and its efficacy in resolving the issues faced by cohabitants when their relationships end.

The Government propose to await the outcome of this research and extrapolate from it the likely cost to this jurisdiction of bringing into effect the scheme proposed by the Law Commission and the likely benefits it will bring. For the time being, therefore, the Government will take no further action.

The decision has been reached because of the need for Government to obtain accurate estimates of the financial impact of any new legislation and the likelihood that we can obtain a view of financial impact by drawing on the Scottish experience of similar law reform.

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Work and Pensions

Financial Assistance Scheme

The Minister for Pensions Reform (Mr. Mike O'Brien): On 17 December 2007 the Government announced a package of significant improvements to the financial assistance scheme (FAS). This statement is to inform the House of the significant progress being made in implementing those changes.

Consultation on Draft Regulations

We are today beginning consultation on a first set of draft regulations. These will increase the percentage covered by the FAS to 90 per cent. of each qualifying member's accrued pension and allow us to pay people from their normal retirement age, subject to a lower limit of age 60. This is the first key stage in aligning the calculation of FAS assistance to the calculation of compensation under the Pension Protection Fund.

The consultation will end on Maundy Thursday, 20 March. We have sought and obtained cross-party and key stakeholder agreement that a limited written consultation period is appropriate for these draft regulations. This will enable us to increase people’s payments as soon as possible.

In addition we are consulting on proposed changes to the annuity factors used when we need to calculate the approximate annual rates of pension that could be secured by cash sums taken from their schemes by members, for instance as a lump sum. This is a technical area, but the revised factors we are proposing would result in an increase in FAS payments to individuals whose FAS payments are calculated by reference to these annuity factors.

The consultation documents are available on the Department’s website at: AssitanceScheme(MiscellaneousAmendments) Regulations2008.pdf; and; or alternatively via the FAS website at:

We will be issuing a second set of draft regulations later this month for a longer period of consultation. These will include provisions for early payment for those in ill health, the extension of the FAS to members of schemes wound up underfunded with a solvent employer, requirements on trustees to provide relevant data, and removal of the option to apply for reinstatement into the state additional pension for those eligible for FAS.

Reinstatement to the State Pension System

At present members of a qualifying FAS scheme may choose to use their remaining funds in their scheme to pay for reinstatement into the state additional pension (known as “Deemed Buy-Back”). Where this occurs the FAS calculates a notional pension to use as a base for the FAS payments.

The Young review made clear that the take up of “Deemed Buy-Back” has been low and its interaction with the FAS is potentially anomalous, and that removal of the ability to buy back into the state scheme could simplify the wind-up process.

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We propose to remove the ability for FAS qualifying members to buy back into the state scheme by “Deemed Buy-Back”. We will be seeking to make this change as part of the second set of FAS regulations that will come into force in July, subject to passage through Parliament.

Some trustees will already have received information on the costs of buying back (known as “Technical Amounts”) from HM Revenue and Customs (HMRC). HMRC will continue to process any applications subsequently received in respect of members for whom that information has been supplied. However, from today, HMRC will suspend action on requests for “Technical Amounts” pending parliamentary consideration of the proposed regulations.

Trustee Guidance Note

Today we are also issuing the first in a series of updates to the trustees of schemes that qualify for FAS which will set out our expectations of them as we move to full implementation of the announced package of improvements to the FAS.

Compromise Agreement Schemes

Regulations made last December extended the FAS to schemes which wound up underfunded as a result of a compromise agreement made by the trustees to prevent the sponsoring employer’s insolvency. Six schemes in this position have now qualified for the FAS and the FAS operational unit will be working with the trustees of those schemes to obtain the necessary data to ensure that payments can be made to their members as soon as possible. The schemes concerned are:

The progress outlined above demonstrates the Government’s commitment to the speedy implementation of the announced changes to the FAS.

Employment, Social Policy, Health and Consumer Affairs Council

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt): The Employment, Social Policy, Health and Consumer Affairs Council was held on 29 February 2008 in Brussels. I represented the UK. There were no health and consumer issues.

This was a straightforward Council with the main agenda item being Employment Ministers’ input to the spring European Council. Ministers adopted key messages, the joint employment report 2007-08, the Council decision on guidelines for the employment policies of the member states, the recommendation on the 2008 update of the broad economic guidelines, the 2008 joint report on social protection and social inclusion and the 2008 report on equality between women and men.

The policy debate which followed called for a greater social dimension to Lisbon and a greater focus on labour market reform, highlighting the need to do more on social cohesion, child poverty and skills. In my
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intervention I stressed the need to ensure that workers’ skills matched the requirements of a changing labour market and supported a European skills review. I pointed out that more needed to be done to increase labour market participation, highlighting that a job remained the best route out of poverty but that further targeted actions were still needed for some groups. I suggested that local partnerships and adapting local services to individual needs could provide some of the answers.

The presidency confirmed that the Tripartite Social Summit would discuss the Lisbon strategy and its new three year cycle, as well as the impact on employment of the energy and climate change package. The presidency also reported that the social partners would inform the Commission of the progress in their negotiations on work-life balance.

The Council also adopted a non-controversial joint Employment Committee and Social Protection Committee opinion on the Commission’s communication on the
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single market review and a resolution on the situation of disabled people in the European Union.

Under other business, the Council noted the annual Work Programmes of the Employment Committee and the Social Protection Committee for 2008, and the Commission gave a presentation on the implementation of the Mission for Flexicurity.

The discussion over lunch covered the future European social agenda, focusing on the Commission’s mid-term review of the 2005-10 social agenda and beyond. The review is due to be published in June. The Government position was clear, that the social agenda provides the EU with an opportunity to reconnect with its citizens and that the focus of the review should be on issues that mattered to them. EU activity should add value and act as a catalyst for change providing analysis and evidence to inform reform programmes in member states. Themes for the future should include skills, improving mobility, tackling disadvantage and the social economy.

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