Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Minister for Employment (Guy Opperman)
It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Midlothian (Owen Thompson) on securing the debate and passionately putting forward his case. I congratulate the hon. Member for Inverclyde (Ronnie Cowan) on the debris and disaster that he wreaked upon his garden last weekend—mighty will be the photographs, I am sure. It was also good to hear the points set out by my friend the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier).
It was good to hear from the shadow Pensions Minister, the hon. Member for Reading East (Matt Rodda), who is also a friend of mine. I am no longer the Pensions Minister, because I was shuffled off that mortal coil by the previous Prime Minister, but I am standing in as a deputy today. I apologise on behalf of the actual Pensions Minister, my hon. Friend the Member for Sevenoaks (Laura Trott), who has a long-standing engagement outside the House of Commons that has been pre-booked for a considerable time, so I notify the hon. Member for Midlothian that she means no discourtesy to him or the House by her absence. I will endeavour to be an able replacement for the Pensions Minister, but she is most definitely carrying forward the torch of the Department’s policy on an ongoing basis.
This has been a debate about all matters construction, and it is right and proper that a full declaration of previous ability be made. I was a painter and decorator for the best part of nine months. I helped to build various buildings on labouring sites, just like the hon. Member for Midlothian, and I was briefly a roofer in my student days. “Opperman” means “upper man”—the man thrown up on the roof in days gone by to catch the tiles as they were thrown up there—so I come to this debate with great support for the construction industry. The hon. Gentleman was entirely right to laud, as others did, construction workers’ contribution to society, whether that is in Scotland, in the United Kingdom or throughout the world. It is to our credit that we have a thriving industry.
The hon. Gentleman raises a legitimate, fair and fundamental point: whether someone is a construction worker or any other person doing a heavy, physical, manual job, how does the state provide for them on an ongoing basis as they age and reach the designated retirement age? With due respect, we have to bear in mind that at all stages there is the issue of intergenerational fairness, because all pensions—this point is not always grasped—are paid by the taxpayer of today, who has to make a contribution to satisfy the number of pensioners, which is going up massively.
Bluntly, we pay more in pensions than ever before in this country. The new state pension went up to £203.85, which is an increase of £18.70, in April 2023. The hon. Gentleman will be aware that the benefit system was enhanced by over 10% in the Budget. We have never paid more in state pensions than we currently do.
Margaret Ferrier
Many construction workers are self-employed and will therefore have no private pension, or a limited one. Does the Minister agree that we should recognise that facet of the construction sector and look at how pension education can be improved in the sector?
Guy Opperman
As the person who pioneered Pension Awareness Day, which I can strongly recommend, and many other pension policies during my five years as the Pensions Minister, I strongly endorse the hon. Lady’s point and encourage the sector unions to get involved in that. To be blunt, some were better than others. I had the honour and privilege of speaking twice at the Trades Union Congress annual conference; I think the first time was a legitimate invitation, but the second time I believe the invitation was probably just repeated by mistake. Making the case to union and sector colleagues for what we are trying to do is very important. I take the point.
The hon. Lady brings me nicely to the issue of which pensions are available. There are three types. There is the state pension, which obviously depends on the extent to which the individual pays national insurance contributions. Pretty much every employee in the construction sector will be paying national insurance contributions as part of their employment, and there is no question but that the self-employed should also be a part of that. The state pension should kick in in the usual way, so that will arrive at a particular time.
On top of that are the reforms brought in originally by the Labour Government, through the Turner commission, in 2003 and subsequently legislated for by the coalition in 2011-12 and expanded on by the coalition. I am referring to automatic enrolment. I accept that not everybody in the construction sector is in an employed job, but I will come to that point in a second. Automatic enrolment is an undoubted cross-party UK success story— I knew it was going well when the Pensions Minister from China requested a meeting to discuss how we were trying to get a workforce motivated and saving in a way that they could not necessarily do previously.
It was clear that the pensions system in the 1980s, the ’90s and the noughties was declining in terms of the private contributions that we wished to see. The defined benefit system was declining and the defined contribution system needed to grow. Putting it to the individual was difficult—I will come in a second to the point that the hon. Member for Rutherglen and Hamilton West made about the self-employed—but automatic enrolment has transformed private pension saving in this country. Saving 8% on an ongoing basis, as we are now doing, with a contribution from the employer within that and some support from the taxman, is massively helpful.
Let me give the stats. As of May 2023, we were almost at 11 million employees, having started in 2012. In 2012, the number of people who had a private pension was 42%; that has now gone up to 86%. Young people were at below 30%; they are now at 85%. Women were at just about 40%; they are now at 87%. The stat that I have for construction workers, which I am assured was provided by my predecessor but one, is that construction workers with private pensions have gone from 30% to 79%. Obviously, that is those who are in an employed situation, but it clearly shows a dramatic improvement on the situation that would have applied if we had been having this conversation 11 years ago, prior to the introduction of automatic enrolment.
That does not mean that one should not address the points that have fairly been raised about the self-employed. Having done 20 years as a self-employed individual, let me make the point that if one is self-employed, one has the perfect right to sign up to one’s own pension. One has the perfect right to join NEST, the National Employment Savings Trust, which is the easiest automatic enrolment provider. There are many different sectors that are relevant. I started out as a—much thinner—jockey and then became a lawyer. Construction workers can set up their own self-employed pension, which is of course tax-deductible as to earnings on an ongoing basis, and many in the construction industry take advantage of that.
However, I accept that there is a cohort that is not saving as it would like to, notwithstanding the three potential ways in which that happens. Along with a state pension that has increased, one has to be aware of the 2016 reforms, which were introduced by a previous Government and set out the new state pension, which was introduced to be simpler and better for a whole cohort of society. To be fair to the hon. Member for Midlothian, he set out the Pensions Minister’s approach previously. This is in a context where there is the universality of the state pension, but more importantly, we have had this for 75 years, and the modern state pension has very clear rules—the hon. Gentleman set them out—about the time at which one can get entitlement. Those rules help to make it both affordable, because it is paid for by the working taxpayer, and sustainable, so that it can continue to be the foundation of income in retirement for future generations.
There is some evidence from some countries—I accept the hon. Gentleman’s point—that one can have an earlier acceptance of part of one’s pension in some cases, but there is a lesser sum. There is genuinely an issue with being careful what you wish for, though. The reason why the Cridland review and the Neville-Rolfe review are sceptical about this, as the hon. Gentleman set out, is that the state pension is there to provide a basic form of support in our old age, such that the state can then say, “We assess that this contribution of taxpayer funding—of GDP—is the amount that we will set aside to try to support those in difficulties by reason of their age, such that they are now pensioners.”
On top of that, there is £30 billion-worth of housing support, there is pension credit support worth many thousands of pounds, and there are a huge number of other additional benefits, such as the winter fuel payment, which is going up by £300. The hon. Gentleman alluded to the fact that things like the cost of living are more complicated; he will be aware that we have spent £94 billion over the past couple of years to support the most vulnerable, including those on benefits, those in receipt of the state pension and particularly those in receipt of pension credit. That support is ongoing. The rises in winter fuel payments are a good example, with the extra £300 coming in plus the ongoing energy support grant.
It is clear that special arrangements for certain groups would rapidly lead to calls for similar arrangements for other groups. How can I put it delicately? I was not a very good jockey—I broke 26 bones in my body in my limited and short career, and my life expectancy and longevity as a jockey were highly limited—but I was able to transfer those skills, some would say interestingly, into being a lawyer and a Member of Parliament. But there are plenty of other professions that would then come forward, and that is a very significant issue for the state. It is worth having a proper conversation about this, because ultimately the state has to decide how much of a tax contribution should be taken from the working population to address these problems. There are inherent problems that would undermine a universal state pension age and its clarity.
Having worked in the Department for Work and Pensions for the past eight years, for my sins, I can strongly assure the hon. Member for Midlothian that the administration of the state pension is a marvel, but it is also incredibly complex. The moment that there were an introduction of a differential assessment, it would create a logistical conundrum, to say the least, and would require administration on an epic level. Getting such a thing correct—I suspect that as the hon. Gentleman proposes, all these things would have to be assessed, including with a prior medical assessment—is extraordinarily difficult. With respect, that approach was comprehensively rejected by the Cridland report. I accept that one paragraph of the Neville-Rolfe report seems to suggest that certain people do so; I think it talks about people who are 65 with 45 years of national insurance contributions. It is something that can be legislated for, because this Government or any future Government will have to legislate for the state pension situation in the next two years. There is no doubt that we will have to return to the issue and produce legislation setting out on how these things can be done, and Parliament can make decisions on that.
I will make a couple of brief points that I think are relevant to how we approach people who have done one job but are struggling to continue in it. First, they would obviously rather be working than on welfare, but we have never paid more welfare support: this country has never given more to the disabled and to those on welfare support. There is a copious amount of support out there. On reskilling, the hon. Gentleman will be aware of the Augar review, the lifelong learning pledge and the efforts that are being made to create further education not just for people aged 18 to 24, but for older workers, in a whole host of ways.
I will slightly push back on the hon. Member for Inverclyde, who was slightly disparaging on the skills situation. I believe that there have been about 5,454,000 apprenticeships since 2010. That is a pretty impressive record on apprenticeships, which have massively increased.
Guy Opperman
I will happily give way, but surely the hon. Gentleman must accept that that is a massive figure.
Ronnie Cowan
But the point I was making was that we picked that up after two or three decades of neglect. What we have been missing in between is the experience that people have gathered during that time.
Guy Opperman
Normally I am very happy to have a go at the 13 years of Labour Governments, but I say respectfully that there was a trend by successive Governments throughout the years that university was the way ahead. That was particularly the case with the Blairite ambition that 50% of all students should be going to university. There is clearly a role for university, but I would like to think that the coalition Government and this Conservative Government have majored on apprenticeships. I urge the hon. Gentleman to read the debate I answered last night—I have been busy—because it was specifically about skills and further employment, with which we are trying to support people.
One way we are supporting people is through the midlife MOT, which is very relevant to the hon. Member for Midlothian. The midlife MOT is mentioned in the Cridland report—I think it is on page 72. It is set out in quite a lot of detail; it is a project that I have pioneered in copious detail for the last six and a half years. I cannot stress enough the difference it is making. The midlife MOT now exists in jobcentres for those who are unemployed; it exists on a private sector basis with the three trials that we have going; and pretty much every large pension provider is now running it. It looks at wealth, work and wellbeing. It is massively appropriate to reskilling those who are 45 to 55 and are struggling to work out the way ahead.
The evidence so far is that the midlife MOT is a very successful innovation. The private sector is very much in support of it. If the hon. Member for Midlothian and his union have not read the Aviva review, I urge them to do so. Put bluntly, the midlife MOT is part of the suite of options that the Government have, along with the business champion for older workers, who I have met repeatedly and is doing good work, and the support for returnerships, which the Chancellor set out in copious detail in the Budget. There are also opportunities for retraining, whether those are in sector-based work academies or in the skills bootcamps run through jobcentres up and down the country, whereby if an individual becomes unemployed they can be retrained in alternative employment so that they can return to the workforce.
In respect of those with health conditions and the disabled, the hon. Member for Midlothian will be aware of the health and disability review that has been published by the Secretary of State for Work and Pensions and the Minister for Disabled People, Health and Work. It looks at exactly how we get people with long-term health conditions and those who are disabled back into work.
Secondly, there is the unquestioned ability that has been shown by so many people. There are now 4.9 million people who are disabled but still working, as of the most recent figures from quarter 3 of 2022. That is an increase of 2 million people. It is a testament to this country that we are now much more open to taking people with health conditions or disabilities into work. Again, that is something that I think will make a difference.
A couple of other points have been made. I have talked about the two state pension age reviews. I would also make the point that for those who are struggling and vulnerable, there has been £94 billion-worth of support.
In conclusion, I believe it is right to restate the point that for 75 years the state pension has had a single issue and receipt date. That will continue for the near future, but Parliament will decide those matters on an ongoing basis with whoever the Government are in future. In those circumstances, I commend this speech to the House.