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Mr. George Mudie (Leeds, East): I congratulate the Secretary of State on the many measures that he outlined, in particular the transitional employment scheme and its good tie-up with the national minimum wage. That will enable us in Leeds—I am delighted that he has included Leeds in the pilot areas—to put in work the 10,000 people in the inner-city, many of whom are from the ethnic communities, including Bangladeshis, Afro-Caribbeans and Pakistanis, and the thousands of one-parent families, all of whom have not had the opportunity to share in the nation's prosperity. My right hon. Friend deserves to be congratulated on the scheme. It seems bad after saying that, but I must draw my right hon. Friend's attention to a slight error: he has put Leeds in the second tranche of pilot areas. As we are very anxious to put those people into work, I wonder whether there is any flexibility to enable us to start earlier.

Mr. Darling: On the latter point, I did say that I would be writing to all the hon. Members who represent the areas concerned, and that will include my hon. Friend.

The first six areas are those in which we are reasonably confident that we can get the scheme up and running quickly. For the reasons that I stated, I want to set up the pilots as quickly as possible. As my hon. Friend will know, Leeds is an interesting case that shows why we need to take action. Its employment rate is about 80 per cent., one of the highest in the country, yet there are parts of Leeds—my hon. Friend highlighted those with an ethnic minority population—where the employment rate is only just over 50 per cent. If we genuinely want to provide opportunities and jobs for everyone, we need to introduce measures such as this to provide people who are not yet in work with far more intensive help than ever before.

Local leadership, including employers and Members of Parliament, is absolutely critical for this policy, as it was for the new deal, particularly in the early days. I believe that it will go a long way towards solving a problem that many people thought was intractable. I do not think that it is intractable, and it is worth putting in the extra effort to make sure that we get people into work. I am grateful for my hon. Friend's support.

Mr. Paul Goodman (Wycombe): The Secretary of State knocked on the door of Help the Aged yesterday, and Help the Aged said of the pensioner credit that it is complex and arbitrary, and will draw half of the older population into means testing. What is his response to that?

Mr. Darling: Naturally, I do not agree with the hon. Gentleman or the analysis to which he refers. The objective of our pension reform is to make sure that we help all pensioners, just as we help all children, but we give more to those who most need that help.

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As a Conservative, the hon. Gentleman may care to remember his party's legacy to us. By 1997, the gap between the better-off pensioners and the poorest pensioners was as wide as it had been nearly 40 years earlier. We believed that to deal with that problem we had to give more money to those poorer pensioners, which was why we introduced the minimum income guarantee, and the guarantee element will continue. We believed also that for those millions of people who had done everything that successive Governments told them to do—Conservative and Labour Governments told people to save for their retirement—it was important to introduce a system that supported rather than penalised thrift.

The hon. Gentleman must be aware that if he had his way, and there was no pension credit, we would return to a system in which somebody who saved money would lose out. That cannot be right, which is why we are introducing what I regard as one of the most radical changes to the social security system for 50 years and moving to the credit system, which rewards people for their thrift. I should be very surprised if, once it has been introduced, another party were to come along and offer to remove money from over half of the pensioner population—it would certainly be a courageous step.

Mr. Chris Pond (Gravesham): Following the comments of my hon. Friend the Member for Leeds, East (Mr. Mudie), may I point out a further error by the Secretary of State? Gravesham is not included in even the second tranche of the pilot schemes for the transitional employment programme, although I have to admit that we have had considerable success in creating employment.

I very much welcome the fact that the scheme will include a basic minimum wage and the employment rights and in-work benefits that my right hon. Friend mentioned, so that people will not only be helped into work but be given an opportunity to move on to the next stage. Will he give a commitment that those in the scheme will also have the support of personal advisers to make sure that they can move into long-term employment and build an even better standard of living for themselves and their families in the years ahead?

Mr. Darling: I believe that unemployment in my hon. Friend's constituency has come down by over 44 per cent. since 1997, helped to a considerable extent by the various measures that we have introduced to get people into work, of which the new deal is the centrepiece. The new measure is in addition to all that, and will now be a major part of the work implemented by Jobcentre Plus. People will have their own personal adviser who sticks with them—that is central to the Jobcentre Plus approach. As my hon. Friend knows only too well from his previous occupation as well as his experience as a Member of Parliament, people who have been out of work for a long time very often need far more help and intensive engagement than those who have just come out of mainstream employment. The new measure will incorporate that feature, because it is essential to get people into work.

Lady Hermon (North Down): I warmly welcome the Secretary of State's statement, but may I draw to his attention what appears to be a slight oversight in relation to Northern Ireland? The 20 areas pinpointed for the new deal pilot schemes include areas in Scotland, Wales and

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England, but not a single one has been selected in Northern Ireland. I ask him to add at least one more area—if not two—that is in Northern Ireland.

Mr. Darling: It was not entirely an oversight, since these matters are the responsibility of the Northern Ireland Assembly. The hon. Lady did not mention pension credit, but I know that the Minister concerned is keen that measures we introduce are also introduced in Northern Ireland, as has been the case for a long time. As she will know, there are other measures operating in Northern Ireland that will help. I am quite sure that we will do everything we can to work with those in Northern Ireland, share experience and so on, because long-term unemployment is a problem no matter where it occurs.

Mr. Ernie Ross (Dundee, West): I also welcome everything that my right hon. Friend has said, particularly about transitional employment. Unlike my hon. Friend the Member for Leeds, East (Mr. Mudie), I want not flexibility but acceleration, so that my area is moved out of the last tranche and closer to the top.

My right hon. Friend is correct that, under the new deal, we have learned from the mistakes of the Conservative party and dealt with the holes as they have appeared. Today's proposal fills the last hole. With the best will in the world—with the intermediate labour market and new deal advisers working as closely as they can—there will always be one or two individuals who find it almost impossible to get a job. Someone must take responsibility for employing them in the short term in order that longer-term employment can be provided by the private sector. If the Government must take such responsibility, I fully support them in doing so. I welcome the scheme, but I want just a little acceleration for Dundee and Tayside.

Mr. Darling: Everybody wants to be first. I very much hope that, if the pilot projects prove to be successful, we can do more. My hon. Friend is right in saying that some people have substantial difficulties in entering the labour market. The advantage of what we are proposing is that people on the programme will gain experience of a full-time job, which in itself brings invaluable experience and discipline. As I have said, they will get the minimum wage and be entitled to all the rights and benefits that go with full-time employment. Long-term unemployed people, some of whom have substantial difficulties, have often missed the experience of going to work. Most of us here take such experience for granted, but many have just not had that opportunity.

If my hon. Friend has time to read the paper that the Chancellor and I are publishing today, he will see clear evidence of what happens when such measures are not taken. As he knows only too well from representing Dundee, there is now a generation of people—mostly over 50 and some in their 60s—who suffered grievously because they were abandoned. I am determined that that should not happen again.

Mr. Christopher Chope (Christchurch): Why is the Secretary of State ignoring the plight of 1 million pensioner households that are in council tax poverty, in the sense that they are spending more than 10 per cent. of their income on council tax each year? Do not his statement and that made by the Chancellor yesterday show

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that, as a result of Government policy, council tax next year will rise by 7 per cent—four times the rate of inflation, as set out in table B11 of the pre-Budget report—and that even more than 1 million pensioner households will find themselves in council tax poverty? Is not that totally unacceptable?

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