House of Commons
Monday 29 June 2009
The House met at half-past Two o’clock
Prayers
[Mr. Speaker in the Chair]
business before questions
The Vice-Chamberlain of the Household reported to the House, on behalf of the Prime Minister, that the address of 22 June 2009 to Her Majesty, praying Her Majesty that she will be most graciously pleased to confer some signal mark of her royal favour upon the right hon. Michael J. Martin for his eminent services during the period in which he has, with such distinguished ability and dignity, presided in the Chair of this House, has been presented to Her Majesty, and Her Majesty has been pleased to receive the same very graciously, and has commanded me to acquaint this House that Her Majesty is desirous, in compliance with the request of her faithful Commons, to confer upon the right hon. Michael J. Martin some signal mark of her royal favour.
Oral Answers to Questions
Work and Pensions
The Secretary of State was asked—
Remploy
1. Mrs. Madeleine Moon (Bridgend) (Lab): What estimate she has made of the cost to the public purse of Remploy’s operations in the latest period for which figures are available. [282345]
The Parliamentary Under-Secretary of State for Work and Pensions (Jonathan Shaw): The last available figures, which are for the financial year ending March 2008, show that Remploy received £195.8 million of direct funding from the Department, comprising £145.8 million of grant in aid and an additional £50 million of modernisation payments to help with the restructuring of the company. Managing the level of funding for Remploy is one of the key aims of our modernisation plan, which was why we secured a £555 million modernisation fund over the five-year period.
Mrs. Moon: I thank my hon. Friend for that reply. In the response to my parliamentary question 270816, Members were able to see that, over the last three years, Remploy’s senior managers have claimed £4.3 million in bonus payments, including £1.7 million in last year alone. That is six times the amount of money paid out in bonuses in 2000-01. Given that Remploy is losing money, that factories have closed and that job numbers are falling, does my hon. Friend not agree that it would be more appropriate for no bonuses to be paid until Remploy is making money, not losing it?
Jonathan Shaw: I am grateful to my hon. Friend. She will know that there are two parts to Remploy: the enterprise operation that runs the factory of about 3,000 employees, and the employment services, which got more than 7,000 people into jobs last year. Part of the bonus programme was that those managers whose pay is about £30,000 got a bonus of about £5,000 for getting disabled people into work. Their pay and performance terms compare favourably with those of other companies or comparable organisations. The bonus scheme is for the company, but it needs to be seen in perspective, in the context of the overall organisation.
Bob Spink (Castle Point) (Ind): People who are disabled or who have special educational needs—very good people who want work—can suffer more than others in trying to find work during the recession, so what more can the Minister do to promote sheltered employment units in privately owned companies?
Jonathan Shaw: I am grateful to the hon. Gentleman for that question. He will be aware that we are doubling the access to work fund, which has seen some 44,000 disabled people into work. Using access to work as an indicator, we are not seeing any of those who benefit from the fund losing their employment. I am sure that he would also welcome the learning disability employment strategy, which I and the Minister of State, Department of Health, my hon. Friend the Member for Corby (Phil Hope), launched last week. The hon. Gentleman is quite right that despite the world economic downturn, we will continue to concentrate on helping disabled people get into work and stay in it.
Employment (Benefit Claimants)
2. Mr. Tom Harris (Glasgow, South) (Lab): What recent assessment she has made of her Department’s performance in moving people from economically-inactive benefits into employment. [282347]
The Secretary of State for Work and Pensions (Yvette Cooper): It is good to see you in the Chair, Mr. Speaker.
The Department is continuing to help people from incapacity benefit and income support back into the labour market and jobs. Despite the recession, and although unemployment has risen, the number of people on inactive benefits has not risen over the last year, which is in contrast to what happened during the recessions in the early ’80s and early ’90s.
Mr. Harris: High levels of economic inactivity inevitably mean high levels of poverty, particularly child poverty. Over the past decade in Glasgow, we have seen incremental reductions in the number of people claiming incapacity benefits, but if that incremental approach continues, we are going to see those levels of poverty inflicted on yet another generation. Does my right hon. Friend share my impatience? Is it not time that we moved from an incremental approach to a step change in moving vast numbers of people off benefits and into work?
Yvette Cooper: My hon. Friend is right that huge problems can be created for the families of those on incapacity benefit and those left out of the labour market for a long time, even though they may be able to come back into work. He will also know that after the numbers on sickness benefit rose for more than 20 years, they have, in fact, been falling since 2003. I think that some of the measures in the Welfare Reform Bill will help prepare people for work in the future as well as helping those who can get back into work do so in the short term.
John Mason (Glasgow, East) (SNP): Does the Secretary of State agree that the best incentive to get people into work would be a serious increase in the minimum wage?
Yvette Cooper: The minimum wage has played an important part in making work pay for a huge number of people who were previously stuck on poverty pay. We take the advice of the Low Pay Commission in setting the minimum wage so that we can support the economy more broadly, but there is no doubt that, along with tax credits and other measures, it has helped to ensure that people are better off in work.
Mr. Frank Field (Birkenhead) (Lab): Given that the number of workless claimants under retirement age has fallen only from 5.6 million to 5.2 million at a time when 3 million new jobs have been available—nearly all of them taken by people coming to this country to seek work—what plans does the Secretary of State have to free up local offices and give them their own budgets so that they can find more effective ways of moving people from benefit into work?
Yvette Cooper: As my right hon. Friend will know, we are introducing the flexible new deal, which will provide more flexible and personalised support. We are also seeking, both though the Welfare Reform Bill and through pilot programmes, to introduce more flexibility, focusing on individuals’ personal problems and the reasons why they may not be able to return to the labour market. I hope that he will recognise that important progress has been made to reverse what was an inexorable rise in the number of people on sickness benefits, and that there have been no increases although the labour market is under considerable pressure as a result of the recession.
Mr. Mark Harper (Forest of Dean) (Con): I am afraid that the Secretary of State simply is not correct. The Government’s target is to remove 1 million people from incapacity benefit and employment support allowance by 2015. The last set of official statistics showed an increase, as do early estimates from the Secretary of State’s own Department. Let me return to the question asked by the hon. Member for Glasgow, South (Mr. Harris). How exactly will the Government hit that 1 million target, given that they have been singularly unsuccessful in doing so thus far?
Yvette Cooper: I am sorry to hear the hon. Gentleman ask that question, but the answer is clear: we will invest additional sums to help people back into work. Conservative Front Benchers have opposed that investment. It is tragic that they should oppose £5 billion of additional support to help people to return to work during a recession. It should also be recognised that in the early 1990s, between 1990 and 1991, the number of people receiving inactive benefits rose by more than 200,000, and that it has not increased over the past 12 months.
David Cairns (Inverclyde) (Lab): I was told by a very experienced individual who had been a job centre manager during the 1990s about the really tough targets for moving people from employment benefits to incapacity benefits at that time. We also discussed the fate of the cohort who have failed their employment support allowance medical and who have not so far turned up again on the jobseeker’s allowance rolls, although they might have been expected to do so. Either they have found jobs, which would be a good thing, or they have fallen out of the system altogether, which would be a bad thing. What research is the Department conducting to ensure that no one who needs help and support is losing out as a result of the new system?
Yvette Cooper:
My hon. Friend will know that we are monitoring all the changes to ensure that we support the most vulnerable, and that we help people back into work. He will also know that some people have managed to find work for themselves. However, we should also focus on more individual problems. We should examine
the individual reasons why people may not be receiving the support that they need, and ensure that we can provide it.
Financial Assistance Scheme
3. Mr. Henry Bellingham (North-West Norfolk) (Con): When she next expects to meet occupational pensioner groups to discuss the operation of the financial assistance scheme. [282348]
The Minister of State, Department for Work and Pensions (Angela Eagle): My office is currently arranging meetings with trade union representatives and members of the Pensions Action Group.
Mr. Bellingham: I am glad to hear that. Is the Minister aware that I represent a number of constituents who were members of the Albert Fisher pension scheme, which unfortunately failed? They all qualify for assistance under the financial assistance scheme and were originally promised that they would receive about 90 per cent. compensation, but they have now discovered that they will receive much less than that. The fine print shows that many will receive less than 60 per cent. Why have my constituents had their hopes raised only to see them dashed in such a cruel way?
Angela Eagle: I am happy to have more detailed discussions with the hon. Gentleman about the particulars of the pension scheme that he mentioned, but through the financial assistance scheme we have provided 90 per cent. assistance, subject to a cap of £26,000. That is what the scheme is designed to deliver, and it will do so.
Hugh Bayley (City of York) (Lab): Nothing is more frightening to people than paying into a pension scheme for many years only to find that it does not produce the benefits that they were expecting, so will my hon. Friend join me in congratulating the 53 members of staff in York who run the FAS, which has rescued 834 pension schemes and has some 12,000 pensioners in payment? Does she also agree that when the state provides a safety net it is important that that safety net is not so gold-plated that it creates perverse incentives for employers to close down schemes, and that it is extremely important, too, that the state safety nets that this Labour Government have introduced are maintained?
Mr. Speaker: Order. It is also extremely important that the reply should be a little bit briefer than the question.
Angela Eagle: I shall see what I can do, Mr. Speaker.
Currently, 12,031 people are being helped by the FAS, which has paid out £55 million gross so far. It was never intended to replace benefits completely if schemes begin to be wound up without being fully funded, but it does provide 90 per cent. assistance subject to a cap of £26,000.
Steve Webb (Northavon) (LD):
May I congratulate the Minister and the Secretary of State on their new appointments? Does the Minister not accept that the FAS pensioners feel like the poor relations because
they are told there is not the money to give them full compensation, when there was money, for example, when building societies were bailed out to put 100 per cent. of the shortfall of those pension funds in at the time? So this is clearly a matter of priorities. Does she also accept that this 90 per cent. figure that she uses is highly misleading—I am sure not deliberately so—because it is not just capped, but there are big issues about the inflation protection? Does she accept that many pensioners will get much less than 90 per cent., and that over the years they will see annual falls in their real pensions? Will she look at those cases again?
Angela Eagle: Without this Labour Government’s having introduced the FAS, there would have been no help whatever. Clearly, there is indexation at 2.5 per cent. for post-1997 accruals. We have also extended early access for those with ill health who have had to retire within five years of retirement age, and for those with a progressive disease we have introduced early access which is unreduced. This is more than we promised to do when the FAS was created. I am happy to keep looking at this, but I think the hon. Gentleman ought to acknowledge that we are providing great assistance where there was none before.
Means-tested Benefits
4. David Taylor (North-West Leicestershire) (Lab/Co-op): What the rate of uptake of means-tested benefits was in 2008. [282350]
The Parliamentary Under-Secretary of State for Work and Pensions (Helen Goodman): The latest estimates of take-up across the five income-related benefits in 2007-08 were published last Thursday. For the income-related benefits that my Department measures, £35.2 billion was claimed, which represents overall take-up by expenditure of between 77 per cent. and 85 per cent.
David Taylor: Between £200 million and £300 million per day is going unclaimed in jobseeker’s allowance, income support, pension credit and council and housing tax benefits because people—especially the poorest pensioners—are unaware of their entitlement, confused by complexity, or unwilling to take what are seen as handouts. Will the Minister step up a gear on take-up campaigning, and move at full speed out of the present means-measuring morass towards the automatic payment of benefits, as Help the Aged is urging her to do?
Helen Goodman: I agree with my hon. Friend that take-up is vital to tackling pensioner poverty. He has raised the Help the Aged campaign for the automatic payment of benefits. We are taking powers in the Welfare Reform Bill to enable us to undertake pilots to do precisely that. My hon. Friend is assiduous in defending the interests of his constituents, and I congratulate him on launching the first contact pilot in North-West Leicestershire, which brings together the work of the local authorities, the Department for Work and Pensions and the voluntary sector and is precisely aimed at increasing take-up.
Philip Davies (Shipley) (Con):
Over the weekend, a constituent came to my surgery who has been a higher rate taxpayer but is now not entitled to any unemployment
benefit because of the levels of his savings. Does the Minister not agree that that kind of means-testing discriminates against those people who have paid substantial amounts in taxation over many years and gives perverse incentives to people not to save?
Helen Goodman: In response to the problems faced by people with large levels of savings, the Chancellor announced an increase in the capital disregard from £6,000 to £10,000, which should have a significant impact on constituents such as the hon. Gentleman’s.
Mr. Nigel Waterson (Eastbourne) (Con): I welcome the hon. Lady to her new position. Is it any wonder that, with £5 billion of means-tested benefits going unclaimed by pensioners every year, 2.5 million are living in official poverty? Why are Ministers trying to sweep under the carpet the effect of means-tested benefits on the new system of personal accounts? Does she not care that many thousands could end up worse off as a result of being auto-enrolled into personal accounts?
Helen Goodman: The hon. Gentleman should be aware that 95 per cent. of people are covered by personal accounts. I am not sure whether he is conscious of the fact that since November it has been the case that claims for housing benefit and council tax benefit can be made in one telephone call, alongside those for pension credit. That will speed up the process and make it far easier for people to get their council tax benefit.
Jobseekers Allowance (Training Courses)
5. David T.C. Davies (Monmouth) (Con): What recent assessment she has made of the effects on the assistance available to jobseeker’s allowance claimants of their participation in training courses; and if she will make a statement. [282351]
The Secretary of State for Work and Pensions (Yvette Cooper): Training can be an important part of helping people back into work and that is why we are increasing training support for jobseekers, particularly those who have been out of work for more than six months. For training support to be most effective for jobseekers, it needs to be accompanied by a continued search for new jobs.
David T.C. Davies: What would the Secretary of State say to a constituent of mine who wanted to renew his forklift truck driver’s licence, which could have got him a job, and was told that, despite his having been out of work for six months, he was not eligible to have the costs refunded or to have any training not because he was not entitled to it, but because he lived in the wrong area? Why is there a postcode lottery when it comes to giving training to people who want to find work?
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