HC Deb 17 June 2004 vol 422 cc898-900
4. Mr. Jonathan Djanogly (Huntingdon) (Con)

What discussions he has had with Sir Peter Gershon regarding the total savings in public sector employment within the Department for Work and Pensions as a result of his efficiency review. [179125]

The Chancellor of the Exchequer (Mr. Gordon Brown)

I will report further on my discussions with Sir Peter Gershon when I make the spending round announcements. It has already been agreed that there will be 30,000 fewer staff posts at the Department for Work and Pensions. Some 10,000 staff will be redeployed, and numbers will fall from 130,000 to 100,000.

Mr. Djanogly

But is this not yet another example of the Government's mismanagement of the public sector? They have been spending millions of taxpayers' pounds to create tens of thousands of public sector jobs only to be told by the likes of Sir Peter Gershon that there are too many workers and that they are often working in the wrong places. Does the Chancellor agree that a better run Department would have saved the costs of recruitment, training and 40,000 redundancies if it had not created the jobs in the first place?

Mr. Brown

The hon. Gentleman complains about the expansion of public sector jobs, but let me remind the House of his election pledges: Increase police numbers in Huntingdonshire … Improve local roads … Expand … hospital and fund extra schools and pensions … Improve our leisure, shopping and children's facilities. If that is not a demand for extra public spending from the Conservatives, what is?

Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab)

Is my right hon. Friend aware that thousands of people in Blackpool and along the Fylde coast work hard for the Department for Work and Pensions, and does he acknowledge that that hard work is delivering essential services? At Warbreck house, people are delivering disability living allowance and the pensions agency is operating at Mexford house. A variety of different services are carried out at Norcross. Does the Chancellor understand that the people who work in those places are anxious about their future? Will he make sure that there is full and meaningful consultation with trade unions and employees to ensure that essential jobs remain and services continue?

Mr. Brown

It was precisely because Sir Peter Gershon gave us accurate information on job reductions and savings, and said that if we went further than that we could put services at risk, that we came to the decision about the numbers that I have announced. We are being sensitive, and when I announced the figures in the Budget I paid tribute to the work done in the Department for Work and Pensions. I know that the Department employs many people in my hon. Friend's constituency who do an excellent job for the service. We have invested £2 billion in new technology, which allows us to cut the number of staff in back-office services. However, there will also be 10,000 additional personal advisers so that the front-line work of the service will continue and, indeed, be enhanced so that more people can get back to work.

Sir John Butterfill (Bournemouth, West) (Con)

Do the employment figures that the Chancellor cited take account of the anticipated employment costs of the pension protection fund and the new office of the regulator? If not, what does the Chancellor anticipate that they will be?

Mr. Brown

These figures are for the Department as a whole. The individual figures on the administration of the pension protection fund will be announced in due course by the Secretary of State for Work and Pensions. We are determined to honour our commitment to make the pension protection fund work. Of course, we have also set aside money to deal with people who cruelly lost their pensions through no fault of their own under previous arrangements.

I must tell the hon. Gentleman that our investment in the Department for Work and Pensions ensures that we have a better service for those who want the pension credit and those who are looking for jobs. At the same time as we are making the savings, we are ensuring that there is a proper service for everyone who depends on the Department.

Angela Eagle (Wallasey) (Lab)

Does my right hon. Friend agree that we are in a period of economic stability with record low unemployment—recent figures show that it is 2.8 per cent.—compared with the period of mass unemployment under the Conservative Government? Does he agree that that gives us an historic chance to restructure the Department for Work and Pensions to help to create even more active labour market policies and ensure that those for whom finding work has been difficult, because their access to the labour market has been beset by problems such as discrimination, are now given the first chance in many years for a meaningful life at work?

Mr. Brown

As my hon. Friend knows, the Department for Work and Pensions is expanding its services to help lone parents to get into work, to help people with disabilities to find jobs and to help people from ethnic minorities who have often felt discriminated against in the labour market. It will offer a specific service to those people who want to get skills. A big expansion is taking place in the service. My hon. Friend is absolutely right—we are determined to achieve full employment in our country. When Conservative Members intervene in this debate, they should congratulate us on having the lowest unemployment for 30 years.

Mr. Howard Flight (Arundel and South Downs) (Con)

When will the Government publish the Gershon report promised in April, and what proposals do Gershon or the Chancellor have to address the problem identified by the Public Accounts Committee that one in five welfare payment decisions by the Department for Work and Pensions are incorrect, leading to up to £7 billion per annum of benefits being paid out wrongly?

Mr. Brown

It is precisely because of problems that have been identified in the past that we have taken action. Compared with the position under the previous Government, the percentage of inaccurate payments has gone down under this Government. I hope that the hon. Gentleman is not suggesting that in removing 40,000 gross jobs, or 30,000 net jobs, we are not going far enough in public sector reform. Indeed, no other Government have announced such a staff reduction in one Budget, so he should applaud us for taking action on efficiency, where his predecessors failed.

Rob Marris (Wolverhampton, South-West) (Lab)

Is my right hon. Friend aware that the Work and Pensions Committee, on which I serve, is currently carrying out an inquiry into computerisation, which he mentioned? Some of the evidence submitted to the inquiry suggests that his figures are very ambitious. Can he assure the House that when the Committee's report is finally published the Treasury will look at it very carefully?

Mr. Brown

The Treasury looks at everything very carefully, so I can assure my hon. Friend that we will examine the report and, after representations from the relevant Minister, we will discuss with him what should happen next. Despite the fact that we have to make announcements about job reductions, it is right to pay tribute to the tremendous success of the new deal and the Employment Service—now Jobcentre Plus—in creating job opportunities. Again, I should have thought that the shadow Chancellor would want to congratulate us, because in his constituency there are only seven people who are long-term unemployed.