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House of Commons

Monday 7 December 2009

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-

Youth Unemployment

1. Andrew Rosindell (Romford) (Con): What assessment she has made of the causes of the change in the level of youth unemployment in the last 12 months. [304061]

The Secretary of State for Work and Pensions (Yvette Cooper): Young people have been particularly heavily affected by the impact of the global financial crisis and the recession. Many employers have chosen to delay new recruitment, which is why the £5 billion investment that we have put in place to help the unemployed includes a £1 billion future jobs fund as well as extra training and support for young people across the country.

Andrew Rosindell: I thank the Secretary of State for her reply. She will be aware that many people who are not graduates also need help and support in finding employment. What measures are the Government taking to ensure that those without degrees are given as much help and support as those who have left university?

Yvette Cooper: The hon. Gentleman makes an important point because we need to help young people, whatever their circumstances or their level of qualifications, to be able to get into work as rapidly as possible. Currently, more than half of young people are managing to leave the claimant count new jobseeker's allowance within three months, so a lot of people are getting help. As well as support for graduates, particularly through internships, we are providing additional help for young people through additional training places, the September guarantee, and the young person's guarantee that no young person should become long-term unemployed. The future jobs fund is also providing youth jobs in the hon. Gentleman's constituency, and I hope that his party will change its policy and support it, as it is making a difference to young people.

Mr. Frank Field (Birkenhead) (Lab): Will the Secretary of State place in the Library information on the breakdown by educational qualification of those who are young and unemployed? That would show just how important the Government's education reforms are in supporting a safe move from school into work.

Yvette Cooper: I am certainly happy to make sure that that information is available. My right hon. Friend is right that those with lower qualifications and skills are at higher risk not just of unemployment generally but of becoming long-term unemployed. That is why it is important not only to raise the education-leaving age so that more young people stay on in education, but to provide the guarantee that young people do not end up stuck on the dole for the long term. The £5 billion investment to support that is also important.

Mrs. Theresa May (Maidenhead) (Con): In the last Department for Work and Pensions questions on 19 October, as reported in Hansard at column 620, I effectively asked the Government to adopt our proposal
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to give the young unemployed specialist help through welfare-to-work providers after six months. The Secretary of State dismissed this, but yesterday in The Sunday Telegraph, it was reported that the Government were going to change the young person's guarantee so that in future it will kick in at six months. That is not enough, but will the Secretary of State now admit that she got it wrong and we got it right?

Yvette Cooper: Let us be clear of the consequence of the programme we have already put in place. Youth unemployment figures for the right hon. Lady's constituency show 2,200 young people on the dole at the moment compared with 4,300 in December 1992-half the level it was in the early 1990s. I would also point out that the investment we have put in place not only provides support at six months but provides it from day one of unemployment-from the very beginning when young people lose their job and need to find work. We are investing to deliver the young person's guarantee with £5 billion of additional investment. Her party opposes that and she also opposes the young person's guarantee that we want to bring forward. She has opposed it because she cannot support the investment to guarantee jobs and training for young people.

Mrs. May: The Secretary of State is always keen to contrast the performance of the last Conservative Government and this Labour Government with selective figures, so I will give her a contrast. In the last five years of the last Conservative Government, youth unemployment fell by 251,000. In the five years of this Labour Government before the recession began, youth unemployment rose by 129,000. We will give earlier help through welfare-to-work providers and create hundreds of thousands of new apprenticeships, training places, places at further education colleges and work pairings. Is not the clear contrast the one between a Conservative party that has policies to help young people and a Labour Government who have let them down?

Yvette Cooper: What utter and complete nonsense! The right hon. Lady will not guarantee young people a job or training or real-work opportunities for young people right now, and she will not fund the additional investment of £5 billion to help young people right now. As long as Conservative Members oppose the £5 billion investment, they cannot back our young person's guarantee and the extra help. I have to say to her again that the 18 to 24-year-olds claimant count is 462,000 right now; in the early '90s it was 784,000; in the mid-80s it was 980,000. This investment helps young people through the recession rather than abandoning them like the Conservatives did time and again in previous recessions and want to do again now because they want to cut the investment and support that is aimed at giving those young people a chance.

Ms Sally Keeble (Northampton, North) (Lab): May I bring to the attention of my right hon. Friend the report from my constituency, "Northampton Young People and the Recession"? Will she say how she is going to meet one of the challenges mentioned in it-providing targeted help for young people who have quite complex needs and making sure that they get support with social issues as well as training to get them back into the job market as quickly as possible?

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Yvette Cooper: My hon. Friend is right. People, especially those with complex needs, need individual support to deal with particular circumstances. She will know that the future jobs fund is providing real job opportunities for young people. The Conservatives have said that they would abolish it, but I know that it is already making a difference in her part of the world. We want to expand on that to provide additional help for, in particular, those with the greatest needs, who might otherwise be at the greatest risk of long-term unemployment.

Winter Fuel Payments

2. Shona McIsaac (Cleethorpes) (Lab): What steps her Department is taking to support older people during the winter months. [304062]

The Secretary of State for Work and Pensions (Yvette Cooper): This winter, older people will again receive the higher levels of winter fuel payment: £250, and £400 for the over-80s. We are also maintaining the cold weather payment at last year's higher rate this winter.

Shona McIsaac: Given that, of all the initiatives introduced by the Government, the winter fuel payment is probably the most universally popular with the over-60s, what does my right hon. Friend think of Members who have described that assistance as a gimmick and believe that it should be abolished?

Yvette Cooper: There are pensioners across the country who certainly do not regard extra cash in their pockets at the time when they need it most as a gimmick. They regard it as a lifeline that helps them to pay their fuel bills in the winter. In 1997-98, about £60 million a year was spent on helping pensioners with fuel bills; now we spend about £2.7 billion a year. I think that that represents a justifiable increase in investment in helping people to get through the winter months.

Workplace Pension Saving

3. Richard Ottaway (Croydon, South) (Con): What steps she plans to take to encourage uptake of workplace pension saving. [304064]

The Minister for Pensions and the Ageing Society (Angela Eagle): Our reforms to workplace pension saving, including automatic enrolment and the introduction of the personal accounts scheme, will result in between 5 million and 9 million people newly saving, or saving more, for their retirement.

Richard Ottaway: The Minister will be well aware of Conservative criticism of the Government's appalling record on pensions and the savings culture, but she may not be aware of the comments of the chief executive of the National Association of Pension Funds, who said the other day:

Even at this late hour, can the Minister get a grip on the issue, do something about it, and reverse the culture towards pensions that has prevailed in this country for far too long?

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Angela Eagle: The Government are determined to support the provision of good private sector schemes. That is why we are in the middle of putting into effect the Turner commission's proposals, which will ensure that between 5 million and 9 million people who do not currently have an opportunity to save begin to do so. We know of the hon. Gentleman's views on the stresses on defined benefit final salary schemes so perhaps he will explain why the Conservatives want to reduce pension saving in the public sector.

Rob Marris (Wolverhampton, South-West) (Lab): What evidence have the Government that tax relief on pension contributions, particularly for higher-rate taxpayers, has any effect on savings for pensions? If the Government have such evidence, will they please send it to me?

Angela Eagle: I have seen no such evidence, although I have heard plenty of assertions since my right hon. Friend the Chancellor decided to reduce the tax relief available to those who earn more than £150,000 a year. As for the distribution of tax relief accorded to pensions savings, I do not know whether my hon. Friend is aware that 230,000 of the best-off people in the country currently receive £6.1 billion, or 25 per cent. of all that tax relief.

Steve Webb (Northavon) (LD): The Minister will know that the Personal Accounts Delivery Authority is now reduced to just two potential bidders to provide the massive IT system for personal accounts and that it will have personal data on millions of employees who have never been pensioned before. Is she concerned about that and, in particular, would she be concerned if one or both of those bidders held those sensitive data offshore?

Angela Eagle: I would certainly not be concerned about the fact that the competitive dialogue being led by the authority has now reduced the number of potential bidders from four to two. One would expect that as part of a dialogue. Clearly we must be careful about the way in which personal data are held, and it is certainly true that the security of personal data is very important in this context. I assure the hon. Gentleman that those concerns are being taken into account adequately in continuing discussions between the Personal Accounts Delivery Authority and the potential bidders who are still left in the competition.

Ms Gisela Stuart (Birmingham, Edgbaston) (Lab): Workplace pensions are extremely important for employers and employees, but will the Minister also have discussions with the trade unions to encourage them to play a positive role in encouraging such schemes?

Angela Eagle: I regularly see stakeholders on all sides of the pensions issue, including trade unions, as well as suppliers and stakeholders in the pensions industry itself. The trade unions have long played an important role, such as by providing trustees to ensure that pension funds are properly and adequately looked after and administered. I intend, of course, to continue seeing representatives of all sides of the pensions industry. It is important that employees as well as employers have the confidence that the pensions they are putting aside are being properly administered. That is why it is also important that, for the first time ever, we have the
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Pension Protection Fund, which ensures that, in the event of private sector insolvency, there are protections for those who have paid into, and invested in, private pension funds.

Mr. Nigel Waterson (Eastbourne) (Con): But can the Minister confirm that 100,000 pension schemes have been wound up since 1997 and that the number of active members has halved from 5.1 million in 1995 to 2.6 million according to the latest Office for National Statistics figures published very recently? Is it any wonder that a survey conducted by the Minister's own Department showed that 51 per cent. of people do not trust the Government to act in their best interests on pensions?

Angela Eagle: It is important to understand that the decline in final salary or defined benefit schemes, which the hon. Gentleman refers to, has been going on since the 1960s, when I was at school, so it was rather a long time ago. There is no magic bullet in preserving defined benefit schemes. Perhaps he will also acknowledge his party's role in the creation of personal pensions and the mis-selling scandals of the 1980s, which also destroyed confidence in pension-saving schemes.

Disability Benefits

4. Mr. Douglas Carswell (Harwich) (Con): What plans the Government have for the future of disability living allowance and other disability benefits. [304065]

11. Mr. David Amess (Southend, West) (Con): What plans the Government have for the future of disability living allowance and other disability benefits. [304072]

The Parliamentary Under-Secretary of State for Work and Pensions (Jonathan Shaw): The "Shaping the future of care together" Green Paper set out our vision for a new national care service. There may be a case for bringing together some disability benefits and the adult social care system into a single system, as a better way of providing support to older and disabled people. The Department keeps all our benefits under review.

Mr. Carswell: Many folk in Clacton who have disabilities and whose need is genuine have contacted me to say they are very concerned that they could lose their allowances. Can the Minister guarantee that the deficit will not be fixed on the back of vulnerable people in Clacton who genuinely need these allowances?

Jonathan Shaw: I welcome the hon. Gentleman's interest in disability benefits. We are, of course, concerned about pensioner disability benefits-both attendance allowance and disability living allowance. As the hon. Gentleman will know, about 1.7 million extra people are going to need social care by 2026, so we do need a new system, but I can assure him that those people who are receiving the affected benefits at the time of reform of the care service nationally will continue to receive the same level of cash support.

Mr. Amess: I represent the most centenarians in the country, and a huge number of senior citizens in my constituency are greatly concerned about any changes to their allowances. Will the Minister put their minds at rest by saying that the changes to, or even abolition of,
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the attendance allowance, as referred to in the Green Paper, will not mean that 2.5 million pensioners will be £3,500 a year worse off?

Jonathan Shaw: I have given an assurance about the arrangements for existing claimants if we introduce a national care service. Many of the hon. Gentleman's constituents are currently living to 100, and he will be aware that that number will quadruple in 20 years' time-and I hope he is among them, and that you are, too, Mr. Speaker. The Wanless report identified that, because of the ageing population profile in this country, we will need an additional £6 billion, so we do need a new system. I have assured the House that existing claimants will continue to receive the same cash levels as before, but I think that everyone recognises that we need a new system, and that is why we are determined to bring forward this debate.

Mr. David Winnick (Walsall, North) (Lab): The Government have a good record as far as disabled people are concerned, but does my hon. Friend recognise the genuine anxiety among many disabled people about the Green Paper? It is necessary to reassure them that no one who is genuinely disabled will lose out as a result.

Jonathan Shaw: My hon. Friend will have heard the scaremongering from certain quarters. I think that we all accept that, with the ageing population, we need a system that is fit for purpose. With increasing age comes increasing cost, and there is a demand for more quality, too. Grappling with these competing demands necessitates that we should come up with a new system. If we do not, the current system will buckle and fall. I hope that my hon. Friend will take the assurance from me that existing claimants will continue to receive the same cash level of support if we introduce a national care service.

Dr. Phyllis Starkey (Milton Keynes, South-West) (Lab): May I draw the Minister's attention to a problem that is affecting some of my constituents who are in receipt of disability and other benefits? If they report any change in circumstance, there seems to be a very long time lag before their new benefit is agreed. In the meantime-and these people are on very low incomes-they are left with no income at all. Will the Minister look into this?

Jonathan Shaw: I am grateful to my hon. Friend for bringing to our attention the concerns of her constituents in Milton Keynes. If she provides me with the details of those constituents who have experienced a delay, I shall certainly look into the matter.

Mr. Mark Harper (Forest of Dean) (Con): It is no good the Minister pretending that this is all Conservative scaremongering, because 34 Labour Members have signed early-day motion 1 and they, along with all the disability organisations, oppose taking away attendance allowance and disability living allowance and folding them into the social care system. The simple question for the Minister is this: the Secretary of State herself, in evidence to the Select Committee, said that older people valued attendance allowance and disability living allowance and the independence and control that they gave them, so how do they benefit if those benefits are taken away
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and, at best, they are not even given back to them in an individual budget or, at worst, if they lose that independence and control? How do they benefit?

Jonathan Shaw: The hon. Gentleman is approaching this from a one-dimensional perspective. I have set out that we have an ageing population and that there will be additional costs in order for us to deliver on a required new system. It took the hon. Gentleman and his colleagues about four months to read this paper before we got a scaremongering response. I have said to his hon. Friends and other hon. Members that existing claimants will have their cash-related income protected as regards attendance allowance and DLA. We need to put in place a system that is fit for the future. We will have a national care system in the same way that we have a national health service, and that is opposed completely by the Opposition.

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