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Pension Schemes
9. Angela Watkinson (Upminster) (Con): What recent discussions he has had with Treasury Ministers on the effect on pension schemes of Government tax policy since 1997. [237970]
The Minister of State, Department for Work and Pensions (Ms Rosie Winterton): My colleagues and I have frequent contact with Treasury Ministers on a range of issues, including pensions. Together, we are working to encourage pension savings through, for example, the pension reforms in the Pensions Bill that will be considered by the House tomorrow.
Angela Watkinson: Government tax policy has cost pension funds £5 billion every year since 1997, as well as the growth that would have been realised had that money remained invested. Actuaries estimate that in the long term, the sum could reach £100 billion—a sum that might sound rather familiar by the end of this afternoon’s pre-Budget report. Will the Minister acknowledge that that tax policy has had a devastating effect on pension funds and their contributors?
Ms Winterton: As I am sure the hon. Lady knows, the changes regarding tax credits payable on dividends were made because there was an incentive for companies to pay dividends rather than reinvest in their future through investment in plant and machinery, for example. The changes were part of a package that included the reduction of corporation tax from 33 to 31 per cent. What made the real difference for pension funds and what was in them were the poor stock market conditions that followed.
Sir Patrick Cormack (South Staffordshire) (Con): How many workers have had their legitimate pension expectations confounded since 1997?
Ms Winterton: The actions that we have taken to support the pensions industry, including the measures in the Pensions Bill, will improve the position of pensions saving in this country. That message has been built up following the Turner commission and through political consensus on the need to ensure that pensions saving is improved.
Child Support Agency
10. Mr. Anthony Wright (Great Yarmouth) (Lab): What progress has been made on the Child Support Agency’s transition to the Child Maintenance and Enforcement Commission. [237971]
The Parliamentary Under-Secretary of State for Work and Pensions (Kitty Ussher): The Child Maintenance and Enforcement Commission took responsibility for the Child Support Agency from 1 November 2008, and is on track to meet its target for this financial year, which was set by the Department for Work and Pensions.
Mr. Wright: I thank my hon. Friend for that answer. During its existence, the CSA collected more than £6 billion, but billions more are still uncollected. Will that debt pass to the new commission, and will the commission’s new powers cover that debt, or will it be written off?
Kitty Ussher: No part of the targets that I have just mentioned, which were set by my right hon. Friend the Secretary of State, include collecting more of the debt—another £70 million for this year, raising the sum to £1.08 billion in this financial year. The commission’s new powers are not in force yet, but we expect it to raise the amount of debt that is collected even further.
Sir Nicholas Winterton (Macclesfield) (Con): Does the Minister accept that many Members receive a large number of letters and representations from our constituents about the CSA? I am genuinely seeking information on this issue: what size is the backlog of cases as the CSA is transferred to the new body? The issue is critical, as many of my constituents wait a long time to get the maintenance that they require.
Kitty Ussher: I am extremely happy to write to the hon. Gentleman and let him know exactly how many uncleared applications remain in the system. I can tell him, however, that this year we think that 40,000 more children will benefit; the number is already up 200,000 in the last three years, and the target is 790,000 children benefiting by the end of this financial year. We are also, of course, introducing a disregard for benefits claimants so that the whole operation of the child maintenance system will contribute directly to our child poverty targets—something that the hon. Gentleman’s party did not even seek to influence when it introduced the CSA in the first place.
Topical Questions
T1. [237987] Bob Spink (Castle Point) (UKIP): If he will make a statement on his departmental responsibilities.
The Secretary of State for Work and Pensions (James Purnell): The primary responsibility of my Department is to ensure that people keep on getting the support and real help they need to get back to work quickly. I continue to work to ensure that Jobcentre Plus is well placed to help individual cases and to intervene rapidly in cases of major redundancies.
Bob Spink: In light of that answer, which included the mention of work, and of the recession, does the Secretary of State agree with UKIP—and, since I see him in his place, the right hon. Member for Birkenhead (Mr. Field)—that unsustainably high levels of immigration are actually causing problems for the future for jobs in this country? Does the Secretary of State agree that, with rising unemployment, we need to stem the growth in the number of EU nationals being employed in this country, which would also help us to keep the benefit bill down in future years?
James Purnell: It is right to have a managed system. As the hon. Gentleman knows, we are bringing in a system based on the Australian points system, which will ensure that we get the best out of migration and the very important contribution that migrants make to our country. It sounds as if the tone of his party and that of the Conservative party are becoming surprisingly similar; perhaps he would like to go back and join the Conservatives again.
T4. [237990] Natascha Engel (North-East Derbyshire) (Lab): With rapid response receiving a huge amount of extra funding and a huge increase in demand, can my right hon. Friend reassure me that private sector employers are actually obliged to open their doors to rapid response? Will he ensure that the work of rapid response is promoted throughout the private sector to small employers who may not know what help it can give?
James Purnell: My hon. Friend is absolutely right to say that we need to promote rapid response to small employers so that they get the help they need, and I am glad that she welcomes the doubling of the rapid response service. We want to make sure that we can help in any situation where there are 20 redundancies; the point is to get there and offer help as early as possible. The contrast is between a Government who are prepared to take real action now—we will hear a little more about that very shortly—and the Conservatives, who have come up with schemes that have fallen apart within 24 hours of being announced.
T2. [237988] Mr. Desmond Swayne (New Forest, West) (Con): Why has the Secretary of State chosen this particularly difficult time to hit the least financially sophisticated and our most vulnerable with his swingeing reduction in the period over which pension credit can be backdated?
The Minister of State, Department for Work and Pensions (Ms Rosie Winterton):
In actual fact, the changes regarding backdating fit into a general overall package that will mean that, from October this year, people will be able to find out their state pension entitlement, pension credit entitlement, council tax entitlement and housing benefit entitlement with just one telephone call.
That is part of a package that has been generally welcomed by Age Concern and others. Overall, it will mean spending £250 million more in this area by 2050.
T5. [237991] Mary Creagh (Wakefield) (Lab): I wonder whether my right hon. Friend is aware of the website www.benefitshelpline.com, which is run by a company known as StealthNET, operating out of Great Yarmouth, and offers UK citizens benefit services for the price of £1.50 a minute on a premium rate call? Now that he is aware of this so-called service, will he take steps to ensure that legitimate UK Government paid-for services are privileged over this sort of thing on health search engines and internet search sites?
The Minister of State, Department for Work and Pensions (Mr. Tony McNulty): My hon. Friend has already raised this particular issue with the Department. We need to make it clear that the Department makes advice on benefits and a wide range of other entitlements easily accessible to everyone through a variety of channels, including information leaflets, telephone helplines, websites and intermediaries. The loudest message needs to be that anyone requiring help on any aspect of the DWP’s work should go through those channels, not through premium-rate channels.
Chris Grayling (Epsom and Ewell) (Con): How much money is actually being saved as a result of the change to the backdating rules for the pension credit, moving from 12 months to nine months?
James Purnell: In fact, as the hon. Gentleman knows, in the medium term the package will cost money, because it allows us to pay for increased benefits for people. It has been supported by Age Concern, and I am surprised that he does not support it himself.
Chris Grayling: What is it about this Government that prevents them from ever answering a straightforward question? I asked the Secretary of State a simple question. This change affects a particular group of vulnerable elderly pensioners, including recently bereaved widows. How much money does the specific change from 12 months to three months actually save?
James Purnell: As the hon. Gentleman knows, it is part of a package that will cost more money. It allows us to improve the services that we give people, and it allows us to give more people more money. The real contrast is between his party, which wants people to suffer during the downturn and will do nothing to help them, and the extra help that will be announced very shortly and to which I am sure he is looking forward.
T6. [237992] Mr. Jim Cunningham (Coventry, South) (Lab): I congratulate my right hon. Friend on saving the Post Office card account. What more can he do to ensure the viability of post offices?
James Purnell:
My hon. Friend is right to say that we need to help post offices to offer as many services as possible to ensure their viability. As he knows, the Department for Business, Enterprise and Regulatory Reform will work with Members to identify further such services that can be provided through post offices. I am glad that he agrees that we took the right decision.
It demonstrates the support that the Government have been prepared to give to the Post Office—again in contrast to the Conservative party, which offered it no support at all.
T3. [237989] Mr. David Amess (Southend, West) (Con): Given that this is warm homes week, are the Government aware that a growing number of people are complaining that they are not eligible for grants because they have part-time jobs, small savings or small pensions, and are not on benefit? Will the Government look carefully at the situation, and ensure that there are discussions with the appropriate Department? Many of the people applying for grants are truly deserving.
Ms Rosie Winterton: It is important for us to ensure that those who are eligible for the grants receive them. As I said earlier, we are working with the Department of Energy and Climate Change to ensure that all who are eligible know how and when to claim, but I take the hon. Gentleman’s point on board and will pass it on.
T10. [237996] Alun Michael (Cardiff, South and Penarth) (Lab/Co-op): I thank my right hon. Friend for his wise decision not to proceed with the proposed closure of the Jobcentre Plus office in Penarth. However, once proposals of that sort are somewhere within the administrative machinery, they have a tendency to re-emerge in the fullness of time. Will he take the opportunity in the meantime to ensure that all options are considered, so that there is a long-term and viable service, albeit not necessarily at the present level, for the town of Penarth?
Mr. McNulty: It is a perfectly valid exercise constantly to look at a rationalisation of the estates base of Jobcentre Plus. As I said earlier, we are reviewing the options for the current 25 offices and will make an announcement shortly, but I agree with my right hon. Friend that we should keep the matter—and both its positive and negative aspects, in relation to the individuals concerned—constantly under review.
T7. [237993] Mr. Adam Holloway (Gravesham) (Con): The Government claim to have virtually eradicated long-term unemployment, and indeed it is pretty hard statistically to classify it as such nowadays. However, plenty of my constituents are long-term unemployed, and in some cases the unemployment has lasted for generations. Do the Government really think that those people can be hidden away in numbers?
Mr. McNulty: Let me say this very clearly: we will not take lessons on the long-term unemployed, the short-term unemployed or anyone in between from the party that did what it did in the 1980s and 1990s.
Ben Chapman (Wirral, South) (Lab): It was announced in February that the long-term unemployed who are seeking jobseeker’s allowance would be required to undertake four weeks of work-type activity. Given the benefits that that policy could bring both to the claimant and the community, can the Secretary of State update me on its progress?
James Purnell:
I am happy to be able to confirm that we are going ahead with that proposal. Indeed, we are going further: we will require people who have been long-term unemployed to work for their benefits on a
full-time basis, to make sure that people have both the right incentive and the right support to get back into work. We want to support people back into work, to make sure they reduce their family poverty and achieve the benefits for their communities that that can bring.
Mr. Graham Stuart (Beverley and Holderness) (Con): Further to the question asked by my hon. Friend the Member for Epsom and Ewell (Chris Grayling) about the amount of savings brought about by cutting the time for which pensioners can claim their benefits, my hon. Friend the Member for North Thanet (Mr. Gale) asked the Pensions Minister how much that amount was, and was told that the information was not held centrally. Can the Secretary of State now confirm that he has been supplied with the answer to that question, and share it with the House?
Ms Rosie Winterton: As my right hon. Friend the Secretary of State confirmed earlier, by 2050 we will be spending £250 million a year more on pensioners as a result of the changes we are making on backdating.
Mr. James Plaskitt (Warwick and Leamington) (Lab): I would like to see whether we can close a particular loophole in pensions law. A constituent of mine has been in a same-sex partnership for 28 years and he and his partner are now in a civil partnership, but were he to die, his civil partner would at present not get the same survivor benefits from his occupational pension as would a married partner. That is not equal, and it is not fair. Can we look at that issue again, to see whether we can achieve equality?
Ms Winterton: I know that certain changes to the Pensions Bill have come back to this House from the other place. I will look at whether any of them apply to the case that my hon. Friend highlights, and I will write to him about that.
T9. [237995] Mr. David Jones (Clwyd, West) (Con): Given the rapidly deteriorating unemployment situation throughout the United Kingdom, how satisfied is the Secretary of State that the regional benefit delivery centres have sufficient capacity to cope with the additional demands placed upon them?
James Purnell: We are very confident about that; we have been preparing for the past nine months. For example, the processing time for jobseeker’s allowance is 10 days, which is down from our target of 11.5 days. I want to pay tribute to the people in Jobcentre Plus, who have been working overtime and opening on Saturday mornings to make sure we maintain the excellent service that Jobcentre Plus provides.
David Taylor (North-West Leicestershire) (Lab/Co-op): According to the National Pensioners Convention, more than 60 per cent. of pensioner couples live below the Government’s poverty line of £151 a week, while the pensioner population is predicted to rise by 60 per cent. over the next 25 years. Is this not exactly the right time to bring forward from 2012 the restoration of the index link between average earnings and the state pension, and to combine personal tax allowances for pensioner couples? Would that not be a low-cost way of tackling pensioner poverty, and will the Minister slip that suggestion into the back of the Chancellor’s notes now?
Ms Rosie Winterton: I know how hard my hon. Friend campaigns on behalf of pensioners, but I have to say that were we to do what he suggests this year, the amount they would get would be lower, so this year is perhaps not the time to take such action. As he knows, we have committed to restoring the link between the state pension and earnings in 2012, or by the end of the next Parliament at the latest. Pension credit is, of course, already linked to earnings. I take on board my hon. Friend’s point about getting help to the poorest pensioners; we have lifted 900,000 out of relative poverty since we came to power, and we will continue to work on that.
Sir Patrick Cormack (South Staffordshire) (Con):
Can the Secretary of State now answer the question that his colleague failed to answer, and tell the House
how many workers have had their legitimate pension expectations confounded since 1997?
James Purnell: My colleague answered the question as set out on the Order Paper. As the hon. Gentleman knows, we have been protecting people’s accrued rights and it is this party that put in place the pensions regulator and the Pension Protection Fund, unlike his party, which provided no protection for people at all, despite the facr that the shadow Foreign Secretary, the right hon. Member for Richmond, Yorks (Mr. Hague), was warned during the passage of the Pensions Bill of 1995 to do exactly that. We have put in place that protection. We fixed the roof while the sun was shining, and that is why people can be confident about their occupational pensions going forward.
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