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14 Apr 2003 : Column 608—continued
Employment
11. Mr. Gary Streeter (South-West Devon): What steps he is taking to help jobseekers find work. [108715]
The Minister for Work (Mr. Nicholas Brown): We are taking a wide range of steps to help jobseekers to find work, including the roll-out of Jobcentre Plus, delivering a work-focused service to all; the new deals, which have got 750,000 people into work; employment zones and action teams, which are helping a further 90,000 people in disadvantaged areas, including 2,000 in Devon, to find jobs; the minimum wage and tax credits, which guarantee parents with one child £237 a week for full-time working; and new technology such Worktrain and job points, which provide information about jobs and training. Those policies have ensured that since the start of the recent global downturn, the number of people working in the UK has increased by 500,000.
Mr. Streeter : I am grateful to the Minister for his comprehensive reply. I know that he is doing his best, but many employers in my constituency report a growing trend whereby young jobseekers arrive for a job interview but through their behaviour demonstrate that they are not remotely interested in taking that job, or perhaps any job. Does he think that we are down to a small but stubborn minority of young jobseekers who
are happy to receive benefits from the rest of us but are not remotely interested in work? What does he propose to do about that?
Mr. Brown: The hon. Gentleman may have answered his own question, but he must not talk down his constituency. South-West Devon has a high standard of living, with only 1.3 per cent. of adults in the constituency unemployed. [Interruption.] The hon. Gentleman barracks me, saying, "It says here," and it does say so here, but the here from where I got the facts is his website.
Mr. George Mudie (Leeds, East): The Minister will be aware that one of the most vulnerable groups of jobseekers is lone parents, but the new deal for lone parents has already moved 175,000 lone parents from welfare into work, and for the first time more than 50 per cent. of lone parents are in work. Despite the Opposition's threats to the new deal, will he confirm that that fine scheme has funds to continue?
Mr. Brown: I can confirm that. My hon. Friend is right to say that the Government have made progress in that respect. We are proud of the achievement, but more needs to be done, and we shall carry on until we have made work pay for lone parents and helped to bear down on poverty in lone parent households.
Mr. John Bercow (Buckingham): Further to the highly pertinent question posed by my hon. Friend the Member for South-West Devon (Mr. Streeter) and the Minister's somewhat neurotic reply, will the right hon. Gentleman now answer this simple and intelligible question: how many jobseekers have had their benefit docked or withdrawn after refusing three reasonable job offers?
Mr. Brown: With all due respect to the hon. Gentleman, of whom we on this side of the House are very fond, I am not sure that he should accuse other Members of being neurotic. As for the answer to his question, he knows that the number is relatively small. He knows from our previous discussions that the action is intended to be a sanction of last resort, not a mainstream means of doing business.
Miss Anne Begg (Aberdeen, South): I am sure that my right hon. Friend accepts that lone parents have been encouraged into work not only by the new deal for lone parents, but by the working families tax credit. In the past week, it has come to my notice that some people who applied for working families tax credit two or three months ago have not had their claim considered. In the light of last week's hiccup in the transition to the new child tax credit, will he engage with Treasury Ministers to ensure that those who are waiting for their claim for working families tax credit or the new child tax credit to be processed do not fall to the back of the queue and that their claim will be dealt with quickly? Many of the lone parents involved are already in work and desperately need that money.
Mr. Brown: Of course I will do what my hon. Friend asks, and ensure that officials in our Department take those issues up with Treasury officials. There are three
things that we must not lose sight of. First, the success that the Government have been able to achieve in the labour market is due to the fact that a combination of tax credits and the minimum wage means that work pays. Secondly, the jobs are there and, thirdly, the Department's proactive approach to helping people through training, advice or even encouragement into those jobs is having a discernible impact on the labour market.Pension Credit
12. Mr. Desmond Swayne (New Forest, West): What estimate he has made of the number of pensioners who will be in receipt of means-tested benefits once the pension credit has been introduced. [108716]
The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks): About half of pensioners will be entitled to pension credit when it is introduced in October, and they stand to gain on average £400 a year. We want as many people as possible who are entitled to it to receive the pension credit. We outlined earlier this Session the measures that we are taking to improve take-up.
Mr. Swayne : The Minister might have answered the question, but perhaps he could explain what his colleague, the Under-Secretary of State for Work and Pensions, the hon. Member for Liverpool, Garston (Maria Eagle), meant when she said in response to Question 5 that the pension credit was not means-tested. What on earth can she have meant?
Malcolm Wicks: This is an income-tested scheme, but it excludes those with savings of less than £6,000—[Interruption.] We are grappling with problems, but the Opposition are prattling about them. I would rather be grappling than prattling. We are grappling with the issue, and want to increase take-up as much as possible. The system will benefit pensioners. Whereas the previous Administration—[Interruption.] I know that it is boring to talk about it, but I shall do so. Whereas the previous Administration penalised people who saved, we are rewarding them.
Mr. Bill Tynan (Hamilton, South): I congratulate my hon. Friend on behalf of pensioners in Hamilton, South, who welcome the minimum income guarantee and who will, I hope, benefit from the pension credit as well. However, will he join me in condemning those who continue to seek to carry on with the rhetoric of how we look at means-testing benefit instead of accepting the benefit and arguing strongly that pensioners have a right to receive it, and that right is not means-tested?
Malcolm Wicks: I thank my hon. Friend for a serious question about a serious issue that should be treated seriously by Members on both sides of the House. Pension credit is an important new weapon in our attack on pensioner poverty. I am pleased that in absolute terms pensioner poverty is now down by 60 per cent. under this Labour Government, and in relative terms the number of old people in poverty has declined by 400,000. Those are results, and we will get better results when we introduce the pension credit.
Final Salary Pension Schemes
14. Mr. Mark Simmonds (Boston and Skegness): What measures he plans to take to address the problems surrounding the closure of final salary pension schemes. [108718]
The Parliamentary Under-Secretary of State for Work and Pensions (Maria Eagle): Our Green Paper "Working and Saving for Retirement" sets out proposals to encourage employers to promote and persevere with pension schemes of all kinds, including defined benefit schemes. We value our voluntary system of pension saving because it has delivered good results. We must all play a part to ensure that it continues to deliver, including the financial services industry, the Government, employers, employees and their trade unions. For our part, we intend to simplify significantly the regulatory regime, which could save employers £150 million to £200 million a year in administrative costs.
Mr. Simmonds : I thank the Minister for her answer. However, since the Chancellor's decision to abolish dividend tax credit, £5 billion a year has been removed from people's pension funds, which has exacerbated the situation and led to the winding-up of 63,955 pension schemes. Will the Minister acknowledge the impact of that pernicious policy and the role that that tax has played in the current pensions crisis?
Maria Eagle: No, Mr. Speaker. I wish that when Opposition Members referred to the so-called £5 billion tax rate they would mention the concomitant £3.5 billion cut in corporation tax that accompanied it. Of course, they never mention the fact that pensions continue to enjoy generous tax privileges worth £13 billion a year. As for the hon. Gentleman's claim about the number of closures of final salary schemes, the Pension Schemes Registry figures for 2002 showed that in that year 3 per cent. of schemes closed to new members. He must remember that final salary schemes are still the most widespread form of provision. There are 5.7 million members of private pension schemes, 4.6 million of whom are in defined benefit schemes. We have £750 billion invested in occupational pensions, and while it is right that hon. Members should consider issues relating to private pension provision—
Mr. Speaker: Order. I think that that will do the hon. Member for Boston and Skegness (Mr. Simmonds).
Mr. John Smith (Vale of Glamorgan): I warmly welcome the comments of my hon. Friend the Minister on encouraging all employers to contribute to personal and other pension schemes, but is it not time that we started to consider placing a statutory obligation on all responsible employers to do just that?
Maria Eagle: The Government are not yet convinced that we should abandon the voluntary nature of our private pension provision. Neither, I notice, is the Select Committee on Work and Pensions, which published a report recently. Our voluntary scheme has given good results and we should be wary of throwing the baby out with the bath water. We need to make the voluntary provisions work better, but if that were not to succeed
more compulsion would be the alternative. We all need to consider which is the best way to ensure more pension saving–—the voluntary scheme or moving to more compulsion. My right hon. Friend the Secretary of State has announced a pensions commission, which, among other things, will consider some of those issues.
Dr. Vincent Cable (Twickenham): Is the Minister aware that some employers are not merely closing their schemes, but defaulting on their obligations to existing members? Will she investigate in particular the recent scandal of Lufthansa, which has told 200 long-standing UK employees that they must expect a cut of a third in their pension entitlement, despite the fact that the company is highly profitable and well able to service it?
Maria Eagle: I will have a look at that. The hon. Gentleman refers to one example, and there are others. The Green Paper sets out ideas on better member protection and ensuring that when schemes wind up, whether solvent or insolvent, there is a proper distribution of the assets in relation to the scheme. The downside of such behaviour from certain employers is that it undermines the faith and belief of all potential savers in private pension schemes. We have to get the balance right; otherwise, we cannot expect our fellow citizens to put their hard-earned money into long-term products such as pensions.
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