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House of Commons

Monday 15 October 2001

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Unemployment (Advice)

1. Mr. Paul Stinchcombe (Wellingborough): What plans he has to increase the amount of personal advice available to unemployed people at jobcentres. [3575]

The Minister for Work (Mr. Nicholas Brown): We are aiming to launch 15 of the 17 Jobcentre Plus pathfinder areas later this month; they comprise around 50 pathfinder offices. We anticipate that the remaining two pathfinder areas will be operating by the end of the year, once building work is completed.

From April next year, the Employment Service and the parts of the Benefits Agency that support people of working age will come together to form Jobcentre Plus. As the service rolls out, we will deliver an integrated service to employers and benefit claimants of working age nationally.

Mr. Stinchcombe: I thank my right hon. Friend for that answer, which is good news as far as it goes. However, what advice has he for my constituent, who has been unemployed for two years and is about to go on the new deal for the second time? He is unsure that it will be targeted to his needs because on the previous occasion, he was offered two modules of environmental studies at NVQ level 2 when he already has a first class honours degree in physics.

Mr. Brown: My hon. Friend's constituent is obviously a bright chap who is finding it difficult to get placed in the labour market. He is not typical, but it is the purpose of the new Jobcentre Plus structures, with their personally tailored advice, to ensure that individuals such as my hon. Friend's constituent can be properly placed. If more needs to be done to help him, the state is ready to stand in his corner.

Mr. Archy Kirkwood (Roxburgh and Berwickshire): The move towards personal advisers is welcome, but did the Minister notice during the summer that the Department's in-house briefings—I believe that the relevant briefing number is 84—demonstrated some staff anxiety about the amount of work that they are doing,

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which denies them the opportunity to get involved in the case load and the referral activities that are necessary for the scheme to work? Will the Minister assure the House that those anxieties will be tackled and that the new project, which deserves to succeed, will not be left wanting for lack of management back-up and resources?

Mr. Brown: I can give the hon. Gentleman the assurance that he seeks, and I welcome his broad support for the Jobcentre Plus concept. Some public servants believe that they will be required to do for Jobcentre Plus the sort of work that they currently do in benefits offices. That is not the intention. We are launching something new and different from what previously existed. The intention is to be far more proactive with individual claimants, go through their welfare entitlement as well as their job opportunities, and work closely with them over a period of time. All that is new. We believe that it is the right approach; the senior management of the public service is enthusiastic about it. I am sure that, as people see the new offices and the way in which the new service works, we will engage the enthusiasm of all who work for us.

Mr. Bill O'Brien (Normanton): Will my right hon. Friend give an assurance that, when offering additional advice at jobcentres, staff will be acquainted with the position of war pensioners? People who receive a pension, and also get jobseeker's allowance because they are looking for employment, have been told they will lose their war pension. It is important to make them aware of the position when they register at the jobcentre for jobseeker's allowance.

Mr. Brown: I shall ensure that my hon. Friend's point is drawn to the attention of those who give advice on benefits entitlement before moving on to considering what employment is available, but the Government intend that work will pay for people in a range of different circumstances. Although there are always hard cases and exceptions, for the overwhelming majority of our fellow citizens, work rather than being on benefits will pay.

Mr. James Clappison (Hertsmere): The constituent of the hon. Member for Wellingborough (Mr. Stinchcombe) may not be typical, but does the Minister know that, according to the Department's most recent statistics, only 40 per cent. of those leaving the new deal for young people, and fewer than 20 per cent. of those leaving the new deal for the long-term unemployed received jobs that lasted for more than 13 weeks? Is not that disappointing, especially in times when many of them would have found work anyway? Is there not a case, especially in view of uncertain world economic conditions, for considering whether the new deal meets employers' needs and provides a good deal for the unemployed and the taxpayer?

Mr. Brown: I begin by welcoming the hon. Gentleman to his new responsibilities and I look forward to arguing about those matters with him, no doubt for a long time to come. I hope that that serves him well in his party.

I do not accept the deadweight cost argument. The new deal for young people has already got about 250,000 young people into permanent employment and has found employment for more than 300,000 young people. The hon. Gentleman makes the point that the labour market

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may be loosening—we await events—but surely that makes the case even more firmly not for letting up, but for what we are doing. What alternative does he propose? We move from a welfare state to a welfare society, but what is a welfare society? I look forward to hearing from him in future exchanges.

John Cryer (Hornchurch): On personal advice for unemployed people who are also disabled, will my right hon. Friend examine the shortage of disability employment advisers, which seems to be significant, particularly in my area of the country in outer east London? Will he also bear in mind that resources seem to be drifting from disability employment advice to the access to work scheme, excellent though it is? That appears to be adding to the shortage.

Mr. Brown: We take the issue of advice to those who have disabilities seriously and I undertake to re-examine the matter, particularly in my hon. Friend's constituency, because he has raised it with me. As we roll out the new deal for the disabled, the Government intend to help into work people who have been disadvantaged in the labour market over a long period and to press ahead with that regardless of the circumstances in which the labour market more generally finds itself.

Pension Provision

2. Mr. Howard Flight (Arundel and South Downs): If he will make a further statement on the McDonald report into pension provision. [3576]

The Secretary of State for Work and Pensions (Mr. Alistair Darling): As I told the hon. Gentleman when he asked a similar question on 25 June, we shall continue to discuss with interested parties and with him, no doubt, whether it is possible to devise workable and affordable alternatives to the annuity purchase requirement.

Mr. Flight: As the House will be aware, the Government have stalled for three years on considering stopping people having to buy annuities by the age of 75. The argument that the Secretary of State made previously involved concerns for tax revenues, but there is a meeting, of which he will be aware, between the Treasury and the Retirement Income Reform Group on Wednesday. If the Treasury's fears are allayed, will he confirm that the Government will move ahead in earnest and before retiring pensioners suffer further damage? My concern is that the real policy may be that which the Minister for Pensions commented on to the Trades Union Congress this summer.

Mr. Darling: I am aware that a meeting is taking place, but the problem with which the hon. Gentleman must come to terms is that the majority of people in this country have only a small sum with which to purchase their pension pot—about £30,000 on average. We must think long and hard about changing from the present system to a new one that might benefit a few people, but which might disadvantage the majority. None of us wants that, and I make a point that bears repetition.

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Some people face difficulty because of increased longevity and because interest rates are generally lower. On the other hand, annuity rates vary substantially and I repeat what the Government have said previously: many people would be well advised to seek the best offer on retirement, because the current difference—between 5 per cent. at the lower end and 12 per cent. at the top end—is dramatic.

Kevin Brennan (Cardiff, West): Does the Secretary of State know of the other proposals on annuities provision such as those from the Tenon group? Does he agree that if such proposals are shown to be workable and if they would not result in loss of revenue to the Treasury, the Government should implement them as swiftly as possible?

Mr. Darling: It is certainly true that if someone proposed a much better scheme that cost no more and gave pensioners lots more money, most Governments would consider it. I am aware of the latest proposals—indeed, I have received a copy of the letter that set them out—but I repeat the point that I made to the hon. Member for Arundel and South Downs (Mr. Flight). The current position is that the vast majority of those who are retiring have, on average, £30,000 available to purchase an annuity. Any question of drawing down a lump sum is academic, assuming that they expect to live for a reasonable number of years into retirement.

I am not against change and the Government will consider alternatives if they are better, but we cannot embark on a course of action that might benefit a few people, some of whom are substantially well provided for, at the expense of the majority. I ask my hon. Friend to examine the implications of all those proposals, because, as with so many on the matter, one must ask where they are coming from, exactly what drives the desire to make reforms and who they would benefit.

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