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House of Commons

Monday 15 March 2010

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Business Before Questions

Death of a Member

Mr. Speaker: I regret to have to report to the House the death of Dr. Ashok Kumar, Member for Middlesbrough, South and East Cleveland. Ashok was a most assiduous Member, much respected by the House and, by professional background, a very fine chemical engineer. I am sure that Members in all parts of the House will join me in mourning the loss of a colleague and extending our sympathy to the hon. Member's family and friends.

Oral Answers to Questions

Work and Pensions

The Secretary of State was asked-

Work for Your Benefit Measures

1. John Mason (Glasgow, East) (SNP): What recent assessment she has made of the effects on low-paid workers of her Department's "work for your benefit measures"; and if she will make a statement. [321772]

I am sure that all Back-Benchers and other Members of the House would want to share in your comments, Mr. Speaker, and, especially, to pass on our condolences to the family of the Member.

The Parliamentary Under-Secretary of State for Work and Pensions (Jonathan Shaw): I would like to reiterate your points about Ashok Kumar, Mr. Speaker. He will be sadly missed, I am sure, by all colleagues right across the House. He was a good colleague and fine parliamentarian.

The "work for your benefit" programme will provide work experience placements, not jobs. These placements will be over and above the staffing requirements of the host employer and in addition to the existing or expected vacancies. As such, we do not expect the programme to have an effect on the employment of existing workers, whether low paid or otherwise.

John Mason: I thank the Minister for his answer. Does he accept, however, that there is a danger that certain less scrupulous employers will take the opportunity
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to pay less to have one of these placements instead of paying the minimum wage, which has been so hard fought for?

Jonathan Shaw: The hon. Gentleman is right to remind the House of the minimum wage, which was introduced by the Labour Government and resisted in many quarters; I am pleased to say that there is now some consensus. We will ensure with contractors-our providers who ensure that we get places for people who have been out of work for two years, beginning with the pilot areas of Greater Manchester, Cambridge, Norfolk and Suffolk-that there is no displacement. This is about work experience. For people who have been out of work, that is an important part of their being able to get back to work. We think that if people are given that opportunity, they should take it.

Jobseeker's Allowance (North Wiltshire)

2. Mr. James Gray (North Wiltshire) (Con): How many jobseeker's allowance claimants there were (a) nationally and (b) in North Wiltshire constituency (i) on the latest date for which figures are available and (ii) 12 months before that date. [321773]

The Secretary of State for Work and Pensions (Yvette Cooper): May I also pay a personal tribute to my hon. Friend the Member for Middlesbrough, South and East Cleveland, who we will all sadly miss and whose family are in our thoughts today?

In the past 12 months, as a result of the recession, the claimant count nationally has risen from 1.3 million to 1.6 million-500,000 fewer than expected this time last year. In Wiltshire, it has risen from 5,250 to 7,300 in the past 12 months, but remains less than half the 15,000 level that it reached during the last recession in the 1990s.

Mr. Gray: The question was about the North Wiltshire constituency rather than the county of Wiltshire. In North Wiltshire, in January this year, the figure for jobseeker's allowance was 1,735-some 500 higher than this time last year, and the highest figure since Labour came to power. That is against the figure of 294 jobs advertised in North Wiltshire. Will the Secretary of State comment on so-called ghost vacancies, which may have inflated that figure? These are vacancies that do not exist but which employment agencies have created in order to collect CVs more or less fraudulently.

Yvette Cooper: The way in which the unemployment figures are calculated would not be affected by any inaccuracies in the list of vacancies, because it looks first at the claimant count and also at the labour force survey, which is very detailed. The hon. Gentleman is right to say that in his own constituency the figure is 1,735. He will also be aware, however, that the 500,000 lower than expected figure for unemployment translates into an improvement of about 700 in the claimant count for every constituency right across the country. I hope that that is something that he would welcome as a result of the investment that we have put in, which, unfortunately, his party has opposed repeatedly over the past 18 months. As for what employment agencies are doing, it is important that they act reputably and do not operate in any way that is fraudulent when putting forward vacancies, whatever their motive for doing so.

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Mrs. Theresa May (Maidenhead) (Con): First, may I associate myself and my hon. Friends with the remarks that have been made about the untimely death of Dr. Ashok Kumar? He was indeed widely respected across this House, and of course our condolences go to his family and friends; our thoughts are with all of them today.

Official figures published today show that the UK accounts for one in seven of Europe's entire hidden jobless population. After 13 years of a Labour Government, why is that?

Yvette Cooper: In fact, as the right hon. Lady will be aware, unemployment in this country is significantly lower than in most of our major European competitors. In addition, we have seen a significant number of people going into further education and full-time education. We are proud of the increase in the number of students that has taken place over the past few years. I am sorry that her party refused to support funding for the September guarantee, which has helped a lot more young people, in particular, to stay on in education and has helped to reduce the number of people who are unemployed.

Mrs. May: But what the Secretary of State failed to address was the issue of the hidden jobless, which was what my question was about. There are 2.3 million people in this country who want to work but are not in work and are not counted in the unemployment figures. In those figures, of course, one group for which unemployment has been rising in recent months has been those on incapacity benefit. The Government's figures now show that they are going to miss their target of getting 1 million people off incapacity benefit by 2015, not by 100,000 or 200,000 but by 700,000. Is it not the case that five more years of this Labour Government will leave 700,000 people needlessly written off to a life on benefits?

Yvette Cooper: We should look at the facts. In fact, the number of people on inactive benefits has fallen by 300,000 since 1997, despite the recession. That is in marked contrast to the figures when the right hon. Lady's party was in government, when the number of people on incapacity benefit trebled from 1979 because her party consistently turned its back on people, wrote them off and ignored people who were on long-term benefits such as unemployment and sickness benefit. If she wants to get serious about helping people back to work, will she finally support the £5 billion extra that we are putting into helping people back to work, which her party has repeatedly refused to support?

Youth Unemployment

3. Mr. Philip Dunne (Ludlow) (Con): What steps her Department is taking to reduce the level of youth unemployment. [321774]

11. Mr. Edward Vaizey (Wantage) (Con): What steps her Department is taking to reduce the level of youth unemployment. [321783]

The Secretary of State for Work and Pensions (Yvette Cooper): We are backing 470,000 additional youth opportunities, including through the £1 billion future
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jobs fund, as well as extra training and job opportunities. That is part of a youth guarantee, which is that all young people should be guaranteed a job, training or a work placement if they have been unemployed for more than six months.

Mr. Dunne: I thank the Secretary of State for that answer, but does she recognise that 923,000 young people aged between 16 and 24 are now unemployed? That is a 50 per cent. increase on the number in that age group unemployed when this Government came to power in 1997. Will she admit that the Government have got it terribly wrong for the youth unemployed?

Yvette Cooper: No, I think the Government are right to provide additional support for young people, through a youth guarantee that the hon. Gentleman's party opposes, and the future jobs fund, which it would abolish. He asked about the figures. In fact, if we exclude the number of full-time students from those figures, there are 657,000 young people who are unemployed according to the definition of the International Labour Organisation, compared with 830,000 in the early '90s and more than 1 million in the early '80s. It was the hon. Gentleman's party that turned its back on the young unemployed and left a lost generation, whose scars we have seen for very many years. We are not prepared to do that, which is why we are investing in the youth guarantee that his party opposes.

Mr. Vaizey: May I add my condolences to the family and friends of Ashok Kumar? He and I became very good friends, not least because he was the only Member of Parliament who had read my father's seminal history of British Steel.

How can the Secretary of State say that the Government have done enough on youth unemployment when one in five young people still cannot find a job, the young person's guarantee, which she mentioned, has been delayed for a year and only half the jobs that she claims have been created under the future jobs fund have actually received any funding?

Yvette Cooper: Again, the hon. Gentleman does not have his facts correct. The youth guarantee started this January and is already offering substantial support for young people across the country. I am surprised, frankly, that he cares when it started, seeing as he opposes it and his party wants to abolish it. To point out the facts in his area, there are currently 2,455 youth claimants in Oxfordshire, compared with 5,865 in the early '90s recession. It is because we are putting in extra investment that we are preventing youth unemployment from rising as high as it did in previous recessions, but we agree that we should do more and will do more next year. His party opposes that.

John Barrett (Edinburgh, West) (LD): Thankfully, there is very low youth unemployment in my constituency, but I spoke to a large youth conference last weekend and I can tell the Secretary of State that very few young people have any idea of the work that her Department is doing. What will she do to ensure that some of the young people who may unfortunately become unemployed are aware of the work that is going on?

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Yvette Cooper: If young people are unemployed, signing on and going to the jobcentre, they should certainly get a dedicated personal adviser who should be able to tell them about all the help available in their area. We are also working with the careers service and with colleges to ensure that we can make as much information as possible available; the internet is important, too, because we know many young people will increasingly gain their information from those kinds of sources, and we are trying to provide better information for young people in that way.

Mr. James Clappison (Hertsmere) (Con): The question is how successful the Government's policies have been and how well they have kept their promises. They came to power in 1997, saying that they would get 250,000 young unemployed off benefits and into work. Is the Secretary of State aware that there are now 250,000 more unemployed young people than there were in 1997, that there were more unemployed young people before the recession began than there were in 1997 and that the number of unemployed young people has been going up since about 2001? Is it not time for some fresh thinking to give chances to our young people, or is the Secretary of State going to tell us at exactly what point since 1997 the Government claim to have kept their promise?

Yvette Cooper: In fact, the new deal for young people helped huge numbers into work and off benefits. Indeed, the 250,000 figure of young people helped into work was met more than 10 years ago, exactly as a result of the support we put in. Young people have been more heavily affected than older workers as a result of the recession. That is why we think it right to put in additional support to guarantee them that extra help to get back to work, but if the fresh thinking the hon. Gentleman is calling for involves cutting £5 billion of help for the unemployed and abolishing the future jobs fund, which is helping huge numbers of young people to get good career opportunities, I have to say that that it is not a form of fresh thinking that Government Members are interested in.

Defined Pension Benefit Schemes

4. John Hemming (Birmingham, Yardley) (LD): Whether she plans to take steps to encourage employers to provide defined benefit pension schemes. [321775]

The Minister for Pensions and the Ageing Society (Angela Eagle): We continue to look at ways of supporting defined benefit pension provision while protecting members' interests through our ongoing deregulatory review. We have today laid new employer debt regulations to help the restructuring of companies. These are due to come into force in April this year and will save employers up to an estimated £49 million a year.

John Hemming: Starting with the tax on pension funds, the Government have introduced a number of policies over the years that have discouraged final salary schemes. I have always wondered whether that was intentional or due to incompetence. It looks like incompetence; am I right?

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Angela Eagle: No, there are very many reasons why defined benefit pension schemes have been in decline. The decline began in the 1960s when I was still at school. Among the main reasons for it are increases in longevity and changes in FRS 17 and various other accounting rules. There is no single magic bullet to try to ensure that defined benefit pension schemes continue, but we are looking through the deregulatory review to give such help as we can. We also need to balance that by protecting those who are already members of schemes.

Kelvin Hopkins (Luton, North) (Lab): The reality is that defined benefit schemes have been in decline for decades and it is unrealistic to expect to reverse that tide. May I suggest, however, that the reality for the future must be a compulsory state earnings-related scheme for everyone, as that is the only way to avoid forcing millions of people into poverty in old age?

Angela Eagle: We are creating for those currently in work the national employment savings trust, which will ensure that those on medium and low earnings can for the first time in their working lives have a workplace pension scheme with a guaranteed employer and Government contribution. We are working very hard to introduce that new scheme.

Mr. Nigel Waterson (Eastbourne) (Con): Can the Minister tell us why her Government have presided over the closing of 100,000 pension schemes and the halving of active membership of those schemes? Why have her Government been so timid about supporting risk-sharing models so that employers and employees alike do not have to face the stark choice between DB and DC-defined benefit and defined contribution-schemes?

Angela Eagle: Current law allows a range of risk-sharing models, but they have not been much taken up by employers, and we have to remember that DB pension schemes are a voluntary arrangement between employers and employees. We have introduced changes to the employer debt regulations and we have reduced the revaluation cap from 5 per cent. to 2.5 per cent., all of which has saved £300 million. We have also introduced statutory override and we continue to look at other deregulatory measures that might encourage employers to maintain provision. I add that 2.6 million people are still accruing rights in the private sector and DB schemes, which remain a very important part of the pensions landscape.

Rob Marris (Wolverhampton, South-West) (Lab): Tax relief on pension contributions costs £18 billion a year in forgone revenue. Does the Minister have any evidence whatever that tax relief encourages people to save for pensions, because her Department certainly did not used to have any such evidence?

Angela Eagle: My hon. Friend makes a very interesting point, but I suspect he needs to direct it to the Chancellor in the run-up to the Budget rather than to me.

Child Poverty

5. Tom Brake (Carshalton and Wallington) (LD): What recent progress has been made towards meeting her Department's 2010 target on child poverty reduction. [321776]

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The Parliamentary Under-Secretary of State for Work and Pensions (Helen Goodman): The decisive action taken by this Government has significantly reversed the trend of rising child poverty. As a result of the policies introduced since 1997, we have lifted 500,000 children out of relative poverty and halved absolute poverty. Measures announced in and since Budget 2007 are expected to lift around a further 500,000 children out of poverty.

Tom Brake: Half the children in poverty live in a family in which someone is working, yet the Government's reliance on means-tested benefits has created a poverty trap, in which it does not pay to work or pay to work longer. What measures do the Government propose to make work pay and ensure that more children are therefore brought out of poverty?

Helen Goodman: The introduction of tax credits and the national minimum wage have, of course, been a huge success in ensuring that those families whose parents are in work are not living in poverty. Furthermore, in his pre-Budget report, the Chancellor of the Exchequer announced an extension of free school meals to primary school children whose parents are on working tax credits. That, too, is a significant improvement for that group of families and in relation to work incentives.

Andrew Selous (South-West Bedfordshire) (Con): We know that the availability of part-time work is critical to achieving our child poverty targets. Does the Minister think that child poverty might now not be rising, as it unfortunately has been over the past few years, if more Government Departments had led the way by providing more part-time jobs? Is she happy that five major Departments have fewer than 10 per cent. of their staff working part time? Are the Government going to do anything about that?

Helen Goodman: The Government have already done something about that. We have introduced flexible working and the Department for Work and Pensions has led a taskforce on part-time working, which brought together people from the public, voluntary and private sectors to look at how we might increase the amount of part-time working across the whole economy.

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