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Malcolm Wicks (Croydon, North) (Lab): Given the importance of occupational pension security, which many workers feel is as important to them as the asset of their own home, and given the Labour Government’s proud record in introducing the regulator and the Pension Protection Fund, can my right hon. Friend assure the House that the new consultation will do nothing at all to diminish the responsibilities of employers to workers’ pensions?
James Purnell: Yes, absolutely. We have made that very clear in the consultation. Our aim is to make it possible for companies to have legitimate business restructuring, but only where the employer covenant remains just as strong. That is why the pensions regulator is there, and I pay tribute to my right hon. Friend for the important role that he played in my Department in ensuring that these changes were brought in.
Mr. David Heathcoat-Amory (Wells) (Con): When I asked the Department in July how many final salary schemes were in deficit, the answer was 5,000, but the then Minister showed no particular concern about or interest in this matter. Will the Secretary of State give an updated figure for the number of such schemes and tell us what he will do about the large number of companies that are, as my hon. Friend the Member for North-East Hertfordshire (Mr. Heald) said, obliged to top up final salary schemes in deficit and to pay escalating fees to the Pension Protection Fund, all in the middle of a recession? Will he now grip this problem rather than simply abandoning it?
James Purnell: We are gripping the problem. That is exactly why the pensions regulator gave the advice to which I referred earlier, which is that people have to continue to address their deficits but what they do must be affordable in the current economic circumstances. The last thing that anyone would want us to do is to push out of business a company that has a perfectly viable future, because of contributions being made at this very moment— but the pensions regulator has to be assured that those contributions will be made so that the deficit is addressed. On the hon. Gentleman’s specific point about the figure, I will write to him with the latest information.
Mr. Nigel Waterson (Eastbourne) (Con): Will the Secretary of State confirm to the House that it is only under his Government that over 70,000 occupational pension schemes have been wound up since 1997, and that savings in those that survive have halved in just the past 18 months? Does his consultation on the obligations of employers towards pension deficits show a dawning realisation on his part that heaping extra costs and red tape on to these schemes has served only to hasten their demise?
James Purnell:
As the hon. Gentleman knows very well, the trend in defined-benefit schemes has been the same all around the world. Employers have been trying to get those risks off their balance sheets. Indeed, the Turner commission said that the previous system was a fool’s paradise where people were making promises that they could not afford to pay for, and where Governments of both colours, including the hon. Gentleman’s, loaded regulation on to schemes through legislation. We are now addressing that. As he knows—I think that his
party supports this—we have changed the rules on indexation, we are examining the section 75 provisions, and we are looking into overriding scheme rules where that is appropriate. However, we need to do that in a way that protects employees, because it would be wrong to unwind the promises made to people who decided to work for those companies on the basis of such promises.
Mortgage Support
5. Mr. David Crausby (Bolton, North-East) (Lab): What support his Department offers in respect of mortgage repayments to people who have lost their jobs. [237966]
The Minister of State, Department for Work and Pensions (Mr. Tony McNulty): As part of income-related benefits, help is available towards the interest on mortgages. We have announced that from January 2009 help will be available for the first £175,000 of the mortgage for new working-age claims and that, as my right hon. Friend the Secretary of State said, the waiting period for new claims will be reduced from 39 to 13 weeks. We are considering the effect that the 1.5 per cent reduction in the Bank of England base rate will have on the standard interest rate, and we will make an announcement in due course.
Mr. Crausby: The loss of a home can have the most traumatic effects on a family, and in the long term can cost us all significantly more in human and financial terms than the cost of saving the mortgage in the first place. Will he do all that he can to ensure that protection from eviction lies at the heart of our Government’s policy?
Mr. McNulty: I will certainly do all that I can on income-related benefits, and I will pass my hon. Friend’s concern on to those in the Government who have already taken significant action on the points that he raises about housing. We will have to wait and see whether anything else is forthcoming when my right hon. Friend the Chancellor makes his statement later on today.
Mr. James Gray (North Wiltshire) (Con): Will the Minister tell the House how many people will be affected by the time limitation he is introducing in January 2009?
Mr. McNulty: At the moment, considerable help is being afforded people. As and when more claims are made between now and 2009—
Mr. McNulty: I do not know, and neither does the hon. Gentleman— [ Interruption. ] With respect, neither does the hon. Gentleman, for all his pomposity. It is simply a shift from 39 weeks to 13 weeks. Anyone who claims from January onwards will be directly impacted.
Ms Katy Clark (North Ayrshire and Arran) (Lab):
I welcome what the Minister has said. Would he agree that the thrust of Government policy has got to be to keep people in their own homes in this difficult period? I welcome what he said about help with mortgage payments being given wherever possible, but does he
agree that where it is not possible, we need to keep people in their own homes? If necessary, the Government should take over property and convert mortgages into rents.
Mr. McNulty: I am not sure about my hon. Friend’s last point, but as she rightly implies, the help given is but one small element of what the Government can do to help people protect their homes, and to ensure that they keep them. I agree with her broad point that the Government should work across the piece—much more broadly than the work of the Department for Work and Pensions—to ensure that people’s homes are preserved, especially in a period of economic downturn.
Mr. Gary Streeter (South-West Devon) (Con): I welcome the Minister’s first answer, even though he seems to have gone slightly downhill since. Can he explain why the system, which has been encouraging people to own homes for the past 11 years, and quite rightly so, still does much more to support those paying rent than those paying a mortgage, even among those with modest incomes in modest houses? I welcome the changes, but why does the system still prefer those in rented accommodation?
Mr. McNulty: I welcome the hon. Gentleman’s comments. I am not sure that he is entirely right about discrimination in the system in favour of tenants rather than home owners. There are, after all, two entirely different prevailing legal circumstances. With regard to income-related benefits, we are trying to do all that we can to provide support to both the home owner, given their circumstances, and the tenant, given theirs. They are not entirely comparable in the way the hon. Gentleman implies.
Housing Benefit
6. Ms Karen Buck (Regent's Park and Kensington, North) (Lab): What assessment he has made of recent trends in expenditure on housing benefit for those in the private rented sector. [237967]
The Parliamentary Under-Secretary of State for Work and Pensions (Kitty Ussher): Expenditure on housing benefit for those in the private sector has increased in recent years, driven by increases in rents and a shift towards the private sector in the rental market as a whole. The latest forecasts of case load and expenditure will be published alongside this afternoon’s pre-Budget report.
Ms Buck: A lot of media attention has been paid recently to a handful of cases of homeless households on housing benefit being placed in very expensive accommodation in the private rented sector. In seeking to respond to some of those extremes when looking at the wider reform of housing benefit, will my hon. Friend assure me that it is not the Government’s intention to ensure that swathes of our towns and cities are no longer affordable for low-income households, particularly bearing in mind that housing benefit is an in-work benefit? Will she avoid the trap we have fallen into so often in the past of crowding low-income households together into estates, communities and whole boroughs? That way lies all the social problems we are working so hard to overcome.
Kitty Ussher: My hon. Friend is right to make that point. There is an intrinsic value in mixed communities, but an issue of fairness arises when people on benefits have access to higher quality accommodation than working families could possibly countenance. That is why my right hon. Friend the Secretary of State has taken steps to cap the housing benefit rate at five bedrooms. As we develop our housing review proposals, I would be happy to work with my hon. Friend to test them against the circumstances in her constituency.
Mr. Graham Stuart (Beverley and Holderness) (Con): The decision to cut the backdating time limit will reduce the take-up of benefits, increase pensioner poverty and cause distress to many elder citizens. How can the Under-Secretary justify it?
Kitty Ussher: We are working with lobby groups to make it far easier, especially for pensioners, to access the benefits to which they are entitled by reducing the number of separate forms that they have to fill in and creating greater behind-the-scenes liaison between the various parts of the public sector, thus ensuring that people get the help that they need and to which they have a right.
Mr. Ronnie Campbell (Blyth Valley) (Lab): A landlord with 30 properties in my constituency came to me the other week and said that the new system whereby the rent rebate is paid straight into the tenant’s bank means that, unfortunately, when tenants are overdrawn, the banks take the rent and he does not get it. He has two or three tenants who are at least three or four weeks behind and he is having to take proceedings against them.
Kitty Ussher: On the whole, the system is working well, but the new regulations contain provisions, which, without knowing the specific details of the case, I would think that my hon. Friend’s landlords could invoke. They provide that, if there is a genuine risk to the payment being passed to the landlord, direct payments can recommence. I therefore advise my hon. Friend to talk to his local authority to investigate that. However, across the board, a large increase in financial inclusion has occurred as a result of the proposals that we implemented.
Andrew Selous (South-West Bedfordshire) (Con): The former Secretary of State, the right hon. Member for Neath (Mr. Hain), was right to mention a few moments ago the slow processing of benefits. Does the Under-Secretary know that in some parts of the country people are waiting nine to 10 weeks to have a new housing benefit claim processed? If they have just lost their job, they do not want nine to 10 weeks of rent arrears. In other parts of the country, because of the way in which the boundaries of the broad market rental areas are drawn, some people experience huge difficulty in finding properties with the local housing allowance that they are given. Will the Under-Secretary undertake to examine those two injustices seriously?
Kitty Ussher:
The hon. Gentleman raises two issues that are local authorities’ responsibility. I share the concern when some local authorities process benefits relatively swiftly and others take longer. In the latter
case, we always put in resources to support those authorities and try to encourage the spread of best practice. However, the hon. Gentleman’s question would be better addressed to the local authorities that should improve their performance.
Mr. Ken Purchase (Wolverhampton, North-East) (Lab/Co-op): Does the Under-Secretary share my concern about the many houses in the private sector that were originally council houses, which were bought at a considerable discount, that now have families in them who pay no rent but have the whole amount paid by the public sector through social services or social security? That means that, in many cases, the public sector pays for the house twice over because the madness of the Rent Service produces a rent for a former council house that is twice that of the council house next door. We must take steps to remedy that. What Anthony Crosland called the dog’s breakfast of housing finance appears not to have gone way. It is still biting hard.
Kitty Ussher: Conservative party proposals led to a decision that, in its words, let housing benefit take the strain. That is one of the reasons for our new review of housing benefit. We want to ensure that it is fair to the taxpayer and individual families.
Lone Parents
7. Natascha Engel (North-East Derbyshire) (Lab): What assistance his Department gives to lone parents to enable them to (a) return to and (b) remain in work. [237968]
The Parliamentary Under-Secretary of State for Work and Pensions (Kitty Ussher): Lone parents have access to a comprehensive package of in-work and out-of-work support and advice via the new deal for lone parents, which has, to date helped more than 600,000 people into work nationally, including 560 in my hon. Friend’s constituency.
Natascha Engel: I thank my hon. Friend for that answer. With more people losing their jobs and fewer jobs becoming available, can she reassure me that lone parents on benefits, who are already among the very poorest, who cannot find good child care or suitable work will not have their benefit sanctioned?
Kitty Ussher: Absolutely, and we have changed the law to ensure that that is the case.
Miss Anne McIntosh (Vale of York) (Con): The lack of availability and the high cost of child care are two reasons why it is difficult for lone parents, particularly parents of younger children, to return to work. What is the Minister’s Department doing to encourage greater access to child care and will she comment on the lower number of child minders over recent months?
Kitty Ussher:
The number of child care places has doubled under this Government. The hon. Lady mentions child minders. The proposals that we are introducing—they start today and will be rolled out over the next two years—apply to parents whose youngest child is seven and who will therefore be in full-time education. We have also introduced extra flexibilities to ensure that the
regulations do not apply where neither appropriate child care nor the right kind of work for someone with such responsibilities is available. However, with the new duty on local authorities in England and the introduction of extended schools throughout the country by 2020, we do not think that that problem will be widespread.
Clive Efford (Eltham) (Lab): Can my hon. Friend give me an assurance that where we encourage parents to look for work under the new regime, in which the age for single parent benefit has been reduced, the system will be one not of coercion, but of encouragement? Will she also look into the types of work that people are encouraged to go into, to ensure that the jobs that they are offered are sustainable?
Kitty Ussher: We want to extend the support that has been available through the new deal for lone parents—and which has been shown to work—to single mums and dads of a much broader age range of children. However, as I said in response to an earlier question, if the job on offer is simply impossible to do because of that family unit’s circumstances, the parent will not be sanctioned for not taking it up. Similarly, appropriate child care must be available. Crucially, however, that is not a decision for a Minister to make; it is part of a conversation that takes place between an experienced professional adviser and the parent in question.
Miss Anne Begg (Aberdeen, South) (Lab): Lone parents are still saying that one of the biggest barriers to moving into work is that they may lose money as a result. That point has been made quite a bit over the weekend, in light of the changes taking place today and the new obligations on lone parents whose child has reached the age of 12. Can my hon. Friend please assure me that lone parents who are moving from benefit into work will always be better off?
Jobseeker’s Allowance
8. Mr. Greg Hands (Hammersmith and Fulham) (Con): How many jobseeker’s allowance claimants there were in (a) the UK and (b) Hammersmith and Fulham constituency at the latest date for which figures are available. [237969]
The Minister of State, Department for Work and Pensions (Mr. Tony McNulty): The number of people in the UK claiming jobseeker’s allowance in October was 980,900. In Hammersmith and Fulham, the number of people claiming jobseeker’s allowance was 2,188.
Mr. Hands: The Minister for London will know that at 7.4 per cent., London’s unemployment rate is already the second highest of any UK region. Indeed, it is significantly higher than in either Scotland or Northern Ireland, which receive big public subsidies. Hammersmith and Fulham already suffers from a high unemployment rate. If the Minister came to my constituency, he would see shops and restaurants closing down and overcrowding on the tube and buses declining. Does he agree that now is the time to take another look at the amount of subsidy that London is paying the rest of the country, in an effort to do something about unemployment in our capital city?
Mr. McNulty: I do not accept the hon. Gentleman’s starting characterisation. What I accept is that London’s employment is particularly high. However, we cannot, as he implied we could, tell the nation—quite rightly—that the Olympics are a matter for the nation and not just London, or tell colleagues that something as significant as Crossrail is a national infrastructure asset, rather than something just for London, and then demand money back because of the geographic location of the City of London. It is utterly simplistic, but not uncommon for the hon. Gentleman, to put things in those terms. Indeed, given the characterisation of London that he draws, he might want to explain—in writing would be perfectly fine—how an amnesty for every illegal immigrant in London, which is currently his Mayor’s position, fits into it.
Mr. Julian Brazier (Canterbury) (Con): May I urge the Minister to reconsider the threat of closure that hangs over the Whitstable jobcentre, in my constituency, at a time when there is considerable unemployment along the north Kent coast? Unemployment is rising both nationally and regionally, and the proposal will hit some of the most vulnerable people in my constituency.
Mr. McNulty: I announced in passing last week that, given the economic downturn, I thought it appropriate to review the position regarding not only the 25 closures but the future estate rationalisation plan. I received the hon. Gentleman’s letter last week, and I shall respond to him and other constituency MPs in due course.
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