Social Security

Part of the debate – in the House of Commons at 2:38 pm on 22 February 2005.

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Photo of Alan Johnson Alan Johnson The Secretary of State for Work and Pensions 2:38, 22 February 2005

Such matters always have to be kept under review, and some—including many Labour Members—hold the view that family members should be included in the scheme and given such support. That said, Members have to accept that although we have made huge progress, certain issues still need to be looked at, so that we have a fairer system and meet the goal of providing proper child care, to allow parents to return to work.

For the fifth successive year, we are freezing non-dependant deductions to relieve the pressure on low-income parents who are housing their adult children. As a result of our roll-out of pathways to work for incapacity benefit claimants, together with the proposed reforms that I laid before the House when we published the five-year strategy, sickness and disability need no longer mean permanent withdrawal from work. In the pathways areas, six times as many people are getting back-to-work help, and twice as many are recorded as entering jobs as in the rest of the country.

Overall, new claims for incapacity benefit are down by one third since 1997, and the employment rate for disabled people seriously challenges the old stereotypes. For the first time, a disabled person is more likely to be in work than out of work. Combined with our disability discrimination legislation, such changes are transforming disabled people's rights and opportunities—a far cry from 1997, when, after 18 years of Conservative Government, they effectively had only two civil rights. Both those rights were granted reluctantly, after at least 14 attempts by Back Benchers from all parts of the House to introduce relevant legislation.

Most Conservative Members may wish to abolish the new deal, and talk incessantly about cuts, but Mr. Boswell—unfortunately, he is not in his place—recently demonstrated his enthusiastic support for our policies while performing the only known constructive cut implemented by a Conservative politician in living memory. He formally cut the ribbon on a new Jobcentre Plus in his own constituency, and we were very pleased to see him there.

We are determined to ensure that everyone has the opportunity and incentive to work. We know that work helps to lift people out of poverty and to prepare for their retirement, but it is also the best pensions policy. Through the Pensions Act 2004, we have taken steps to bolster confidence in pension saving, helping people to make informed choices about saving more and working longer. The ground-breaking Pension Protection Fund, which will operate from this April, will revolutionise the security of occupational pension saving for some 10 million members of defined benefit schemes, and the financial assistance scheme will offer some help to those who have lost the most in the past. We are the first Government to take action to deal with the problems of thousands of pensioners who were deprived of their savings and lost their occupational pensions along with their jobs.

Although in many cases, the trustees of such schemes are not yet able to provide detailed information on the scale of individual losses, we have always wanted to make clear as early as possible the position of older workers, who have the least chance to make up the shortfall. Even though we are still collecting information, we now know enough to reassure those who will be within three years of their scheme pension age on 14 May 2004 that they will get no less than 80 per cent. of their core promised pension.

We have already committed ourselves to reviewing the financial assistance scheme after three years, and Government funding is already fixed for the current spending review period, up to and including 2007–08. But as with all our spending plans, we will review FAS funding in the next spending review, alongside other spending priorities.